Understanding WorkSafeBC Clearance Letters
Active and Good Standing is a WorkSafeBC term uses to describe the account status of a company registered with WorkSafeBC.
It is an important term that owners and property managers should clearly understand when verifying a paint contractor’s insurance coverage.
WorkSafeBC is a provincially legislated organization with a mandate to enforce and oversee no-fault insurance in the workplace. Every business in the province is required to be registered with WorkSafeBC, regardless of whether a contractor’s workers are employees or subcontractors.
Any time you hire a contractor to work on your property or home, it is essential you ask for a WorkSafeBC Clearance letter before any work commences.
A clearance letter provides you with assurance the contractor and his workers are insured in case of accident or injury while working. Being Active and in good standing is a good sign a contractor is managing his insurance and making his necessary filings.
But there are some things to look out for.
When a contractor or company opens a WorkSafeBC account they are walked through a series of questions and options to set up their account.
Premiums are based on a percentage of gross payroll for a company.
Quarterly remitted premiums are required of employers to report payroll and remit premiums for the period ended. WorkSafeBC operates on a calendar year so quarterly remittance is filed and paid in April, July, October and January.
This quarterly filing creates a delay in clearance status for any contractor looking to obtain a clearance letter for future work. An “Active in Good Standing” status covers a period that has already passed and does not guarantee coverage for future work.
To ensure your contractor is adequately covered with WorkSafeBC, look for their clearance letter to state “Advance Clearance to the next quarter date”.
Advance Clearance status is referred to as GoldStar Clearance. To qualify for GoldStar Clearance with WorkSafeBC a company must have been active and reporting to WorkSafeBC for a minimum of 24 months, up to date on all filings and payments and have no outstanding balance due.
Advance Clearance eliminates the owner’s need to check and recheck clearances and reduces potential liability during the period covered.
You Could Be on the Hook
Potential Liability. There is a potential liability for owners if the contractor does not have Advance Clearance. If a contractor fails to remit a filing or pay premiums, WorkSafeBC can move up the chain to hold the “prime contractor” (read “owner”) responsible for those premiums.
Since contractors cannot qualify for GoldStar Clearance for a minimum of two years from the time they register with WorkSafeBC, there is a window of liability for anyone hiring a new company.
Steps to Avoid Issues
Using construction holdbacks (up to 10% of the total invoice can be held for 45 days from the time the job is completed) will help divert monies due for a period. Reviewing the length of coverage can also provide assurance the contractor is invested in maintaining his status. In the end, dealing with established contractors with Advance Clearance is an owner’s best protection against potential WorkSafeBC liability issues.