Hiring Party/Purchasers of Construction Services
As of January 1, 2013, almost everyone in the construction industry needs a clearance number, unless the work that is being done is home renovation work.
- Hiring parties must ensure a clearance number is in place.
- The party being hired must have WSIB coverage, and report and pay their premiums on time so they are eligible for a clearance number.
- A clearance number must be in effect for the entire time the contractor or sub-contractor is performing the work.
Who is Considered the ‘Hiring Party’?
Anyone who purchases construction services from a contractor or subcontractor is considered the hiring party.
This means principals and general contractors – including those who are not in the construction industry. For example:
- A general contractor hiring a sub-contractor to help on a construction job is a hiring party.
- A restaurant owner hiring a construction company to do renovations on their restaurant is a hiring party.
- A landlord hiring a contractor to build a new garage on a rental property is a hiring party.
- A municipality, university or other institution hiring a contractor/subcontractor to do construction work is a hiring party.
Please note: Occupants of private residences (and their family members) who hire contractors to do home renovation work are not required to get a clearance number. For more information on this, please scroll down to the Exemption section.
Who is Considered the ‘Party being Hired’?
A party being hired is a contractor or sub-contractor that is hired to do construction work.
Construction work means work performed in any of the industries listed in Class G – Construction in the WSIB’s Employer Classification Manual (ECM)
Why is a Clearance Number Important?
A clearance number proves that the business you have hired is properly covered by the WSIB. This means that the hiring party (you/your company) is not liable for any unpaid premiums that the contractor/subcontractor should have paid to the WSIB.
What Happens if You Don’t have a Clearance Number, or the Clearance Number is No Longer Valid?
As of January 1, 2013, doing non-exempt construction work without a valid clearance number is an offence under the Workplace Safety and Insurance Act 1997 (WSIA). These offences will be prosecuted as of January 1, 2014. The maximum fine for a conviction of an offence under the WSIA is $100,000.
You/your company could also be liable to pay any unpaid premiums or other fees owed to the WSIB that your contractor should have paid on the work you/your company hired them to do.
How can You tell if a Clearance Number is Valid?
If you want to request a clearance number or check on the status of a clearance number, visit the WSIB website and use our online clearance number service. You can enter the clearance number into the site, and our system will let you know whether or not it’s valid.
What if your Contractor gives You an Independent Operator Letter that says He Doesn’t Need Coverage?
The independent operator status letters in construction only applied until December 31, 2012. This means that your contractor previously didn’t need coverage, but as of January 1, 2013, the rules have changed and they may now be required to have WSIB coverage.
Home Renovation Work
If you or a member of your family hire and pay a contractor to do work on your private residence or private cottage, then the work is considered exempt from Mandatory Coverage.
However, the exemption does not apply if you hire a contractor to do renovation work on:
- An income property.
- Structures situated at the location of a private residence where the structures are used for commercial purposes, e.g.: a garage that is used to operate a motor vehicle repair business.
- A home that you don’t live in but are fixing up to sell.
- Building a new home.
If you are hiring someone to do any of the work in the list above you will need to make sure a valid clearance number is in place before any construction work can begin. All construction businesses/contractors doing this work must be registered with the WSIB and are required to provide clearance number certificates. A valid clearance number must be in place for the entire time the contractor/subcontractor is doing the construction work.
Work that isn’t Class G
If you are hiring someone to do construction work mentioned above that is not a business activity listed in Class G – Construction in the Employers Classification Manual, then that work does not fall under Mandatory Coverage (e.g., realtors, landscapers, interior designers/decorators [design/consult only], architects [design/consult only], engineers [design/consult only]).
How to Get a Clearance Number
You can request and manage your clearance numbers 24/7 through our online clearance number service.