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Bill Tackles Construction Worker Insurance
It is absolutely galling that there is now a group dedicating itself to organizing protests against Bill 119, the Workplace Safety and Insurance Board’s new provision for mandatory coverage among construction workers.
For years, the misuse of the independent operator provision has been the single biggest catalyst to the growth of the underground economy in construction. Many employees call themselves independent operators so that they may work for a contractor without source deductions on their paychecks for income tax, CPP [Canada Pension Plan], and employment insurance premiums, and, in many cases, without proper premiums paid by the employer for WSIB. This practice allows the illegitimate construction contractor to undercut a legitimate one by significant margins of up to 40 or 50 percent, making it progressively more difficult for legitimate employers to provide jobs and for their employees to continue to contribute to the tax base.
Aside from the obvious avoidance of income tax and other premiums, employers who engage in this practice also do not consider themselves as having employees; therefore they do not meet the minimum threshold for paying employer health-tax premiums. So the government loses revenue on two fronts, and this shifts an unfair proportion of the tax burden onto the shoulders of hard-working taxpayers who play by the rules.
Those who are opposed to the new rules argue that this is an unfair cost that will force businesses to shut their doors and lay off employees. Actually, it is many of those who now stand against Bill 119 who have forced businesses to shut their doors and lay off employees for years because they have had an unfair competitive advantage.
Construction is the only industry where it has become the norm for employees to call themselves independent operators and not have deductions taken off of their paychecks. Coincidentally, it is also an industry which, according to Statistics Canada, accounts for approximately one-third of Canada’s $36 billion underground economy. In every other occupation, workers must be able to prove that they are self-employed in order to be able to deduct legitimate expenses from their reported income. Bill 119 addresses an inequity that has been allowed to perpetuate itself for far too long.
Industry Compliance Officer
Ontario Construction Finishing Industries Alliance
Oakville, Ontario, Canada
Publication date: 3/18/2013