Alec Caldwell
How to keep your renovator's 'exemption' for Ontario WSIB: Part 2
Canadian Contractor Business Commercial Property riskTechically, you only have to pay WSIB for three months if you "stray" temporarily into the commercial-side as a residential, homeowner-serving renovator. But do you really want to risk being audited by these people? In my opinion, contractors with WSIB exemptions should be very careful about preserving them.
Last week I wrote about how to protect your “exemption” from having to make costly payments to Ontario WSIB if you are a home renovation contractor.
Under legislation that went into effect on Jan. 1 this year, huge numbers of individuals in our industry who used to be able to avoid paying WSIB, must now pay up. There is a small loophole for residential renovation contractors.
To recap last week’s message, if a homeowner hires and pays you directly, and you are working on their principal residence, you are not required to register with WSIB. But if the homeowner sends you to a rental home property they own, you are deemed to be doing commercial work, and you now have to register and pay into WSIB.
Last week I wrote that once your renovation contractor exemption is lost, it is lost forever. I need to clarify this. “Forever” can initially start as a 3-month period, this being the minimum required period a residential renovation contractor has to pay into WSIB for doing commercial work. The problem is: when this contractor does more of these jobs in the future, and again uses the 3 month rule, it’s clear that the contractor risks being red flagged by the WSIB as someone who really does commercial work. It’s possible WSIB may call an audit on this contractor at that time. If they are found to be contravening the WSIB’s new legislation, they could easily lose their exemption forever. Having an audit normally uncovers other items, too. Do you want to risk that?
I’ve talked to some contractors who are considering opening a second company to carry out commercial work only. The idea is to keep this business separate from the home renovation side. The downside is: if both companies are owned or have the same officers or directors, WSIB could very well see this as circumventing their rules and take measures to correct this.
If you are a contractor out there with questions about WSIB, email us your questions directly and we’ll reply to you in strict confidence. Email monica@carahs.org or call us toll free at 1-866-366-2930.
CARAHS is a not for profit organization for self employed business owners
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Laws implemented by governments such as the current Ontario Liberal/NDP coalition which unnecessarily sabotage the construction industry, should be considered invalid.
Boycott the WSIB. If enough contractors and workers work together and withhold ALL remittance the WSIB will reform quickly. Private Insurance providers must be allowed to compete for our business.