Discussion in 'Workplace Safety and Insurance Board (WSIB)' started by COUSINIT, Mar 26, 2012.
I couldn't have said that better myself!
Its gonna get simpler....
I have performed over 50 WSIB audits for various Ontario based carriers, and let me tell you it does not stop there. I have seen them go after 3PL, because some contracts make them the "de facto" carrier, hence they must insure all sub contractors ( carriers ) carry WSIB. It is sometimes a grey area.
But alas, the new forge to the future is going to be like they have done with construction based companies, and that is ALL employees including principals of the company must pay WSIB upto a max of approx 68k ( I beleive sometime in 2012 )
I have this on good information from WSIB Field Auditors that this is the next target for mass coverage.
I have been involved with carriers of 60-70 O/O that have had to pay $200,000 in back WSIB (before I got involved) for fraudulent or non-existing subcontractor letters of agreement from the WSIB.
The good news.... they can only go back 2 years....but the CRA can go back indefinetely ( YES ). And if your fraudulent subcontractor doesnt pay his taxes....look out.
You might already know that if you dont register for WSIB they have no authority to audit you, but they are in close relations with CRA on this matter and share information ( BOTH WAYS ), albeit it may take some time to come to fruition.
For covering your assets, make sure all drivers of company vehicles are employees and all Subcontractors either own or lease their vehicles in thier own name or a company WHICH THEY CAN PROVIDE proof that they are at least a 50% partner in.
Do it To it ,Sonny Pruett
Can of worms!
This is my first day here and my first post/reply.
There are several "tests" that aid in determining the employee or contractor relationship, some of which Bubba-one has listed.
Unfortunately various government agencies cannot agree.
WSIB: you may get away with the contractor until someone gets hurt. the injured worker often appeals a decision that finds him/her to be a contractor, and is without your input classified as an employee.
CCRA: there have been several applications of GAAR or General Anti-Avoidance Rules. Simply put, any method that is used to manipulate your tax liability, or avoid paying what you should, is a federal violation. So incorporating just so you don't have to pay more taxes may in itself be a violation. Hiring contractors and therefore no employer remittances may be a violation. Reserve an office for the auditors.
Insurance Bureau of Canada: who is the corporate entity in the event of an accident? Whose truck. Did you maintain due diligence.
Basically if a driver takes instruction from you they are employees. If your customer may possibly be caused to think the individual may possibly work for the company whose equipment they operate, they are an employee.
Last year the courts determined that an individual was an employee on those grounds. The driver was wearing a company baseball cap.
I think there are 8-10 questions that need to be answered, to get a exeption certificate fro WSI&B,
-who sets the hours of work
-were does the person start his work from
-who name is advertised on the truck & ownership
-who pays for the truck, & repairs,
-who pays for fuel.
-who supplys the work.
-is it a forced dispatch
-( I think there is more criteria
Correct, WSIB and CRA (Revenue Canada) are two totally seperate entities. Both have differant rules in determining "independant status".
Just because WSIB deems someone independant for injury compensation reasons does not mean that CRA will agree as far as tax obligations are concerned.
If an employee only works for you he will be deemed an employee regardless of if he is incorporated or not. Same thing applies to commision sales people. They may get around it for the first year by saying they are looking for other customers but if they have business cards, a parking spot and a desk sooner or later they will have to pay the price, and so will the company who hires them for thier share.
Everyone wants to get paid "under the table" but when the feds come calling the first place they look is "under the table"
Contractor vs Independant
Truckit is correct, if a driver uses your tractor he is considered a employee, WSIB and source deductions must be done. The only time they are considered a contractor they operate their own equipment. You cannot pay someone as a driver service unless that company has drivers in many other companies. As a owner of a company you are personnaly responsible for source deductions of your employees.
Confusing I know one arm of the government says that it is ok and the other says no. I am going by what WSIB have told me and the info they provided. We as a company do not try and avoid or hide behind anything. We if told we had to would go back to company drivers if required but as of now we do not foresee that happening. We have had both company and contracted drivers for about 16 months now.
Hunter, contractors driving your trucks exclusively who are not subject to gains and losses of the business and whom have no say in the routes and rates they haul are considered employees by the CRA. If one of your contract drivers ever get audited by the CRA your company and the Owners could be held liable for source deductions in excess of the amounts you have already paid them. Very Very Risky Practice. Let's not kid ourselves as to the reason some do this. Tax avoidance !!! This gives your company an unfair advantage to those that pay their way. It does not matter if your employee has incorporated.....
Yes I understand this and we do have it in writing from WSIB that they are exempt from paying and are covered under another insurance. Regarding taxes I truly believe that if people can get away from paying taxes then they will. We have our accounting company prepare all of our drivers taxes as a benefit to them if they like. We will also pay their taxes and deduct from them if they want us to and if the driver wants their own accountant to do their taxes then we request a copy of it and ask the driver how he is going to pay and offer them the same option that all the drivers have. Hopefully this makes sure that all taxes are paid and we cannot be held liable but again if a person can get away without paying taxes they will. I sometimes am an over-trusting person and believe that everyone should be given the opportunity and I will help make sure that it is done the right way - so no one gets themselves or the company in hot water so to speak.
This incorprated driver dichotomy is pretty scary.
I for one am too much of a chicken to hire anyone that way because of the repercussions associated with them not paying their taxes and our company being responsible for deductions @ source.
Here in Quebec if you are incorporated and work exclusively for one customer, in the eyes of the CSST you are viewed as an employee of that company and therefore fall under their coverage.
This does not apply if you are a legit owner operator and have your own truck.
As for income tax purposes in Quebec in order to operate as a corporation you must demonstrate an element of risk associated with what you do.
An incorporated driver , driving your truck has no more risk than a salaried employee and therefore does not meet the criteria.
All this said , I know quite a few Polish and Russian companies who pay all their employess this way including office staff.
I know for sure that they have been audited by Revenue Quebec and no repurcussions came out of the audit. I have been told by my accountants that the decision to allow or not allow is at the discretion of the auditing officer.
Much too scary an option for me. I like to sleep at night!!
Hunter that is all well and good but unless you have it in writing from WSIB it won't mean a thing when your driver hurts himself and has no coverage. The other thing to consider is if that driver does not pay his taxes (which a lot of them will not) you will be liable for all taxes not collected plus penalty.
I just went through a WSIB audit in Feb. I give all new drivers the option of being a company employee or work as a contractor under thier own corporation. Believe it or not 9 out of 10 people want their own corp. WSIB told me that as a single employee under their own corp - yes they can opt out and we do not have to cover them. I do however insist that all personnel have some type of insurance and in most cases it is better than WSIB. The insurance covers the driver 24 hrs a day and WSIB is only when they are working.
Any carrier operating this way is cheating and it will be a matter of time before major penalties and fines will be levied. Employees driving company trucks are not considered contractors by CRA or WSIB. We use Owner Operators here and some have drivers working for them. We ensure all our O/O's with employee drivers are registered and paying premiums by providing us a certificate every 60 days. O/O's without employee drivers can opt out of WSIB but must provide WSIB "opt out" documentation from the WSIB. We also ensure ALL drivers including O/O's have "out of province" medical insurance. It does become a problem when a request comes in for our WSIB certificate. We can provide a certificate but it only covers company employees such as administrative staff as we have no company drivers. We can also provide the certificate or opt out letter for the specific driver (O/O) in question but then the shipper would need to confirm the driver identity.
I am hearing more and more that some carriers are making their drivers incorporate and become contract employees. We all know the down side to all of this. If you perform you due diligance and receive a current WSIB clearance certificate how can you ensure that ALL of that carrier's employees are in fact employees and are adequately covered?