Another Ontario drywall contractor plans to challenge a WSIB audit

By John Caulfield

In late June, Interior Drywall Design (IDD), a contractor based in Stoney Creek, Ont., started getting its business life back to some semblance of normal.

The Workplace Safety & Insurance Board (WSIB), through which contractors must purchase workers’ compensation insurance, had accepted IDD’s proposal to pay $124,689.24 in back premiums and interest IDD had been assessed after WSIB audited the company for the years 2011 and 2012.

WSIB had informed IDD last Nov. 22 that it had understated what it owed for insurable workers, subcontractors that the Board deemed its employees, and certain office staff. Until its proposal was accepted—IDD agreed to pay $5,400 per month for 23 months, and make a final payment to cover any overdue balance on June 2016—WSIB had been refusing to issue clearance certificates to IDD, which in effect prevented the company from working for other builders and businesses.

In late June, WSIB released seven clearances to IDD, effective June 23 through August 21. Clearances for three other projects were in dispute at presstime.

IDD, which specializes in heavy-gauge framing and exterior construction for commercial, industrial and institutional projects, typically generates about $5 million in revenue annually. Its owner, Mike Vrbos, says he only agreed to pay WSIB so that his company could stay open. However, he objects to the Board’s ruling against IDD and intends to fight it through the appeals process.

“I don’t think I owe them anything,” says Vrbos. In his objection, Vrbos disagreed with the auditor, Peter Novak’s, determination that nearly 100 subs his company had hired in 2011 and 35 in 2012 were actually employees whose workers comp insurance needed to be paid for by IDD. “I feel the auditor, and WSIB in general, [are] bent on declaring every construction individual in the province as an employee,” stated Vrbos in his objection.  He noted that each time IDD hires a sub, it issues a T5018 tax form the sub must fill out and sign to declare its independent operator status.

Vrbos singled out as “malicious” WSIB’s determination that 20-plus workers for one subcontractor, Bolger Enterprises, were IDD employees. Bolger, says Vrbos, “provided a WSIB number on their invoices to obtain work. When the number couldn’t be cleared through online E-clearance, Merrill Bolger [the sub’s owner] stated it was an independent operator number [and] signed a release form in 2011 on commencement of contract work with IDD stating that he was responsible for any and all costs to WSIB.” Vrbos concluded that WSIB should be looking into Bolger’s account “rather than hitting IDD with their premiums.”

Vrbos believes his case is “identical” to that of Keyon Drywall, against which WSIB levied a $340,000 assessment for the years 2004, 2005, 2006. Sean Keane, Keyon’s owner, appealed that ruling, and in March 2009 the WSIB’s Appeals Officer vacated the Board’s assessments on Keyon, and rejected the Board’s appeal three months later.

But Vrbos had better be ready for a long and drawn-out process if he has any hope of reversing WSIB’s decision. Almost four years later, Keane is still battling the Board over a complaint he filed in August 2010, claiming that WSIB’s actions effectively put his company out of business.

In June, he told Canadian Contractor that WSIB was waging a war of attrition by requesting ever-more documents from him. And he is already anticipating more delays in discovery before he gets his case before the Ontario Superior Court of Justice.

As his case has become more public, Keane says the reaction of other pros has been uniformly positive. However, he observes, far fewer contractors will challenge WSIB’s rulings for fear of retribution. He noted that he helped one contractor get a decision overturned. “And WSIB audited him again.”