Identifying Independent Operators (IOs)
People who work under contracts for service and do not employ any workers, are considered IOs. An IO agrees to do specific work in return for payment. The payer does not necessarily control the way in which the work is done, or the times and places it is done.
How to ensure an IO you hire is not treated as a worker by the Workplace Safety and Insurance Board (WSIB)
You must follow WSIB procedure. If you don’t, the WSIB may deem the IO to be your worker, and require that premiums be paid on the labour portion of the contract with the IO.
The WSIB has an industry-specific questionnaire for the construction industry which you can download from the Employer Forms section of the WSIB’s website.
Both the principal and the IO must complete and sign the questionnaire, and submit it to the WSIB. WSIB decision-makers review the questionnaire and any other information that is relevant to the terms and conditions for service, i.e., invoices, contracts, purchase orders, business cards, etc. When all of the criteria considered together indicate the person has a separate business that is not integrated into the employer’s business, the WSIB considers that person to be an IO. If, however, the WSIB decides the person does not have a lot of independence in doing the work and that his/her decisions have an insignificant effect on his/her opportunity to earn a profit or suffer a loss, it considers that person to be a worker. The questionnaire is necessary even if the IO is incorporated.
How to protect your business from WSIB IO charges
You should fill out and submit a questionnaire if you are planning to hire an IO, before the IO does any contract work for you. If the WSIB concludes the person is a worker, you will need to pay premiums to the WSIB for that worker’s wages and comply with all other WSIB policies. If the person is an IO, you need to take action to protect yourself and your business from financial risk.
Ask the IO if he/she has purchased optional insurance from the WSIB. If the answer is “yes”, get a clearance from the WSIB that confirms the IO is registered with the WSIB and has met all payment and reporting obligations. It waives the WSIB’s right to hold the principal responsible for any premiums charged to the IO’s WSIB account during the time the clearance is valid. An IO (or his/her dependants) who has WSIB coverage also cannot sue you as a result of a workplace injury, disease or death.
The WSIB’s eClearance program is an online service available through the WSIB’s website that allows contractors to obtain specific principal-contractor clearances, and allows employers to easily check the validity of a potential contractor’s clearance and manage its list of contractors. A clearance is valid for up to 90 days, with four “predictable renewal dates” – February 20th, May 20th, August 20th, and November 20th. All clearances expire on those four dates each year.
Individuals who do not wish to use the electronic system have the option of calling the WSIB’s Clearance Department at 416-344-1012 / 1-800-387-8638 to request clearances over the phone, or faxing their request to 416-344-3410 / 1-877-849-4882.
Keep proof of all clearances during the WSIB audit period, which is the current year plus two years.