Independent Operators

Hiring independent operators can affect your bottom line

 

The Workplace Safety and Insurance Board (WSIB) has released information on what contractors and others need to know before hiring independent operators.

For WSIB purposes a subcontractor or owner/ operator may be a worker or an independent operator. Workers are automatically covered through premiums paid by their employers to the WSIB. But WSIB coverage for independent operators is not mandatory.

What is an independent operator?

An independent operator is different from a regular employee or worker. In construction the typical independent operator

• offers services to various firms
• reports to the government as a self-employed business
• owns and operates his or her own equipment.

The WSIB uses an organizational test to determine whether someone is an independent operator or worker. The full relationship between the person and the firm using his or her services is carefully examined. The following are some sample questions.

• Does the person own, operate, and maintain his or her own equipment?
• What control or supervision is exercised over the work performed?
• Does the person work for various companies?
• Is the work governed by a collective agreement?
• Does the person file GST returns with Revenue Canada?

What are the employer's responsibilities when using independent operators?

The person offering services and the firm thinking of hiring the person should both complete the organizational test. Everyone will then be clear about their responsibilities and duties under the Workplace Safety and Insurance Act.

If the test shows that the person is an independent operator and therefore not automatically covered by insurance, the person has the option of opening an account with the WSIB and taking out voluntary coverage.

If the test shows that the person is a worker under the Workplace Safety and Insurance Act, then the company using his or her services is an employer and must pay for the person's WSIB coverage.

Until the person's status is determined by the WSIB, the hiring company is required to pay WSIB premiums based on the person's earnings.

What is a clearance certificate?

Issued by the WSIB, a clearance certificate confirms that an employer is registered with the WSIB and has met reporting and payment obligations.

Independent operators who employ their own workers or helpers are employers and must be registered with the WSIB. If they aren't registered, a contractor using their services may be held liable for any workplace injury they or their employees incur.

If you use an independent operator who employs workers or helpers, make sure that the operator is registered with the WSIB. Ask operators for a clearance certificate as proof that they are registered with the WSIB and are paying premiums for any workers or helpers they employ.

NOTE: A clearance certificate is not proof that independent operators have WSIB optional insurance for themselves. If the operator is injured on your job, he or she may sue you and any other person or company for negligence.

For more information, phone the Workplace Safety and Insurance Board at
(416) 344-1013 or toll-free 1-800-387-8638.

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