Coverage – Contracts Involving Equipment
Effective date: February 1, 2021
Application: Applies to all contracts that involve equipment.
Policy subject: Employer coverage and registration
To establish coverage when an equipment owner enters into a contract requiring equipment.
Contract for service, also referred to as a principal-contractor relationship, is where a business or individual provides labour services, which may involve the use of equipment, to another business or individual on a contract basis in return for a monetary amount.
Contractor or subcontractor means a business or individual hired under a contract for service by another business or individual and can be present in all industries.
Equipment refers to hired equipment, implement or apparatus used to fulfill the terms of a labour contract.
- Examples include, but are not limited to, earth-moving equipment, transportation equipment, buses, tow trucks, mobile welding equipment, agricultural implement, and logging equipment.
- Light-grade or home-use items, such as hand tools, lawnmowers, and snow blowers, are not considered equipment.
- Personal transportation vehicles are considered equipment if used to carry out the work and fulfill the terms of the contract (e.g., delivery, courier, and rideshare). Otherwise, a personal transportation vehicle is not considered equipment if only used for the purpose of travelling to and from the worksite.
Owner-operator means a person who owns/leases and operates equipment used to provide services under contract to a business or another individual.
Principal means any person, association or body that hires a contractor. Principals are considered employers.
- An owner-operator, who is not an employer in their own right and enters into a contract with a principal, is considered a worker of the principal (The Workers’ Compensation Act, 2013, Section 8(2) and 8(3)).
- Depending on the circumstances, the owner of the equipment may not be the one operating the equipment and may hire another person to operate it. It is the Workers’ Compensation Board’s (WCB) intent to:
- Ensure that the operator of equipment is covered for any injuries incurred, and to make the principal responsible for the relevant assessments if there is no individual or business that should already be responsible for them (Section 8(2) and 8(3)).
- Treat employers in all industries fairly. If an equipment owner hires a worker or contractor, they will be responsible to register with the WCB like any other employer in a mandatory industry (Section 2(1)(l)).
- If the owner-operator is considered a worker of the principal, the principal is required to pay WCB premiums for the labour portion of the contract up to the maximum assessable earnings amount per person per calendar year, and may deduct the amount from the owner-operator (Section 8(4)).
- Due to the deregulation of the trucking industry in 1998 and the replacement of The Motor Carrier Act with The Traffic Safety Act in 2006, an Operating Authority Certificate is no longer required for the transportation of goods. As a result, Section 18 of The Workers’ Compensation General Regulations, 1985, is no longer relevant in defining who the employer is within the trucking industry.
- An equipment owner or owner-operator must register for a WCB account if they hire a worker(s) or contractor(s) to operate the equipment on a full-time, part-time, casual, or contract basis.
- Coverage for the equipment owner or owner-operator who hires a worker(s) or contractor(s) may not be automatic and will be determined in accordance with POL 03/2014, Coverage – Personal, and/or POL 14/2014, Coverage – Directors.
- An owner-operator is an independent worker if they do not hire a worker(s) or contractor(s). They will be considered a worker of the principal, unless they meet the account eligibility outlined in POL 13/2020, Independent Worker Coverage, and have purchased personal coverage in accordance with POL 03/2014, Coverage – Personal.
- If the owner-operator is considered a worker of the principal, the principal may deduct or recover WCB premiums from the owner-operator. The amount will be based on:
- The labour portion of the contract as determined by the employer or by using the Assessment Schedule for Contract Labour, attached in PRO 07/2004, Assessable Labour Portion of Contracts, up to the maximum assessable earnings amount per worker per calendar year, and
- The principal firm’s net premium rate (see attached example in PRO 07/2004, Assessable Labour Portion of Contracts).
- Owner-operators who are considered workers of the principal will be covered:
- From the start of the contract until 10 days following the completion of the contract, and
- For directly-related activities, including equipment servicing and travel to and from the contracted worksite, provided the worker proceeds by the most practical route.
(1) POL & PRO 02/2011, Coverage – Contracts Involving Equipment (effective February 1, 2011 to January 31, 2021).
(2) POL 08/2011, Coverage – Trucking, Leased Operators (effective January 1, 2012 to January 31, 2021).
(3) January 1, 2014. Policies and procedures amended in accordance with The Workers’ Compensation Act, 2013 (Bill 58).
(4) POL 01/87, Coverage, Owner Operators (effective January 5, 1987 to February 1, 2011).
POL 12/2020 Employer Coverage and Registration
PRO 07/2004 Assessable Labour Portion of Contracts
POL 14/2014 Coverage – Directors
POL 03/2014 Coverage – Personal
POL 13/2020 Independent Worker Coverage
PRO 13/2020 Independent Worker Coverage
POL 08/2020 Maximum Assessable Wage Rate – 2021
POL 07/2011 Minimum Annual Assessment