Should the truck drivers who are recognized as independent contractors register for workers’ compensation coverage themselves, or should this coverage be provided by the principal trucking company that contracts them?

The decision process begins with the way roles are defined.

The Ontario Workplace Safety and Insurance Board (WSIB) applies an “organizational test” to determine if a contractor is an “independent operator” or “worker”. This distinction is important because, if a principal hires a truck driver who is deemed to be a worker, the principal is responsible for the driver’s workers’ compensation coverage through the WSIB.

Under the organizational test, an independent operator carries on a business that’s separate from the company employing their services. An independent operator in the transportation sector will pay for the truck and most equipment, select and operate the vehicle of their choice, and can enter contracts of any duration to transport goods and maximize profits.

In Ontario, the principal is generally not required to provide workers’ compensation coverage to sole proprietors. Instead, sole proprietors have the option to open an account with the WSIB and register for voluntary coverage.

Consider registering for coverage

Sole proprietors should consider registering for such coverage and paying all premiums so that, if they are injured, they receive workers’ compensation insurance.

Voluntary registration for workers’ compensation coverage also provides a competitive advantage to sole proprietors because principals, on the advice of legal counsel, are increasingly asking trucking contractors if they are registered with the WSIB.

Given the risks associated with the services that truck drivers perform, many principals require contractors to obtain insurance with the WSIB. This is because injured sole proprietors may be able to sue for negligence or another cause of action that relates to an injury.

Meanwhile, where a truck driving contractor employs workers — and becomes an employer in their own right — the contractor is required to register for WSIB coverage for its workers.

On the advice of legal counsel, principals often ask such contractors if each of the workers will be covered by workers’ compensation insurance, and will ask the contractors to provide WSIB clearance certificates.

Where contractors say they are exempt from any WSIB requirements, principals often request evidence and sometimes require the contractor to obtain employer’s liability insurance instead.

Principals are taking these precautions because they may be held responsible for the costs of injuries to a contractor’s workers. Additionally, if a contractor registers with the WSIB but neglects to pay premiums, the principal may be held directly responsible for the contractor’s premiums.