Coverage for contractors and subcontractors

If you or your company hires a contractor or subcontractor without their own WCB-Alberta coverage, you may be responsible for paying premiums on their behalf if they are injured. Providing coverage not only protects the worker, it also protects your company from a potential lawsuit.

There are several ways to limit your liability:

  • Before a contractor or subcontractor starts, ask them to provide a clearance letter for proof of WCB-Alberta coverage for their workers or the directors/business owners. A clearance letter identifies who is covered, the industry their coverage is in and if they are in good standing. If a contractor or subcontractor operates in an exempt industry, they are not required to carry coverage for their workers or the directors/business owners.
  • You can make coverage a condition of the contract or hire contractors and subcontractors that already hold coverage. Always request a clearance letter at the start of the contract to ensure the right coverage is in place in the right industry.
  • Ensure the owner or director of your business has personal coverage. Without optional personal coverage, your business owner is not protected from lawsuit if a deemed worker, contractor or subcontractor is injured, or one of your own workers.
  • Request another clearance letter before making payment. If you pay your contractor or subcontractor when they have an outstanding balance on their account, you can become responsible for the outstanding premiums. You can sign up for an automated clearance so you are notified when their status changes.
  • If their operations are exempt or the contractor or subcontractor does not have optional coverage, you can apply for a deeming order to cover them as your workers. Once approved, you will be protected from lawsuit and in exchange they will become your responsibility. You will pay premiums on their earnings and if they are injured, the claim will be charged to your account. Make sure you include the directors or business owners of the subcontractors in your deeming order to ensure you have full protection.

The potential for liability depends on the legal status of the contractor or subcontractor you hire and whether or not they hold coverage. The following table outlines whether you are responsible for covering contractors or subcontractors you hire:

Not incorporated
This includes partners, trade name companies and proprietors (people who own and operate a business without workers).

WCB Status Your responsibility
Without their own
WCB accounts

They are considered your worker. You must report and pay premiums on their earnings. If they are injured, the claim is your responsibility.
With their own WCB accounts They are not considered your workers. You are not responsible for reporting and paying premiums on their earnings and claims are their own responsibility.

To limit your liability when hiring a contractor or subcontractor, it is important to obtain a clearance letter before they start working for you to confirm coverage in the correct industry and again before making your final payment so you don’t become responsible if they have outstanding premiums.

Incorporated

WCB Status Your responsibility
Without their own
WCB accounts
They are not considered your worker. You do not have to report and pay premiums on their earnings. If a worker, director or business owner is injured, you or your company is not protected from lawsuit.

You can apply for a deeming order to deem them to be your worker.
With their own WCB accounts They are not considered your worker. You are not responsible for reporting and paying premiums on their earnings and claims are their own responsibility.

If you're a contractor or subcontractor, you may qualify for your own WCB account.

Requesting clearance letters

We encourage you to obtain clearance letters for the companies you hire. This is another way of limiting your liability. It is important to obtain a clearance letter before the work starts, during the contract and before issuing final payment.

It is important to remember it is illegal for you to deduct the cost of workers’ compensation from your workers, contractors and subcontractors under section 139 of the Workers' Compensation Act.