By Joanne McPhail, Partner, Certified Specialist in Corporate and Commercial Law at Barriston LLP, and
Reginald Brown, Articling Student at Barriston LLP.
Exemption for an Executive Officer
Generally speaking, Executive Officers are exempt from Workplace Safety and Insurance Board (WSIB) coverage. This is in accordance with the Workplace Safety and Insurance Act (WSIA), which states that the WSIB insurance plan does not apply to workers who serve as Executive Officers of a Corporation. As a result, Executive Officers are not obligated to pay WSIB premiums and may instead apply to the WSIB for optional insurance coverage if they desire to do so.[1]
Exemption for an Executive Officer in the Construction Industry
Following changes to the WSIA, it is mandatory that independent operators, sole proprietors, Partners and Executive Officers involved in the construction industry have WSIB coverage. However, ONE Executive Officer in each company may be exempt from coverage if:
a) the individual is an Executive Officer; and
b) the Executive Officer does not engage in any construction work.
“Construction work” means any skilled or unskilled manual work, the operation of equipment or machinery, or the direct on-site supervision of workers. Periodic site visits are permitted, provided the Executive Officer does not perform any construction work while on the site.
Executive Officers who satisfy WSIB’s criteria and who do not do construction work may request an exemption from compulsory coverage by completing Form 1208WA.[2]
WSIB’s Criteria for “Executive Officer”
The WSIB considers Executive Officers to be a select group of individuals who control the direction of the company, rather than just a department or a branch of the organization. The key to Executive Officer status is that the person be empowered or appointed to act as an Officer of the organization. The WSIB reserves the right to determine who is an Executive Officer by reviewing the person’s responsibilities and authority within the Corporation.
Title alone does not make an individual an Executive Officer. If the individual is not empowered by the organization to act as an Officer, the WSIB will not determine them to be an Executive Officer. If you are incorporated and you consider one (or more) of the individuals on your payroll to be an Executive Officer, you should be able to demonstrate that the individual in question:
a) holds a position as Member, Chair, or Vice-Chair of the Board of Directors or serves as President, Vice-President, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Secretary, Treasurer or General Manager of the Company;
b) is named in the Corporation’s minute books as holding one of the positions listed above;
c) is enumerated, appointed or empowered to act as an Officer of the Corporation through corporate documents such as Articles of Incorporation, Charters, Bylaws and/or corporate profile reports filed with a federal or provincial agency;
d) actually performs the duties and executes the responsibilities of an Executive Officer; and
e) has significant functional responsibilities, demonstrating that the individual is in fact a “directing mind” and/or is wholly or partially responsible for the Corporation as a whole.[3]
Conclusion
To summarize, Executive Officers are generally exempt from WSIB coverage. Now, coverage is mandatory for Executive Officers in the construction industry, but construction employers with multiple Executives may exempt one Officer if that person does not perform construction work.
Regardless of the industry they are involved in, employers should ensure that their Executives satisfy the WSIB’s criteria detailed above, as title alone does not make an individual an Executive Officer. As mentioned, the WSIB has the right to determine who is an Executive Officer by reviewing the person’s responsibilities and authority within the Corporation as well as Corporate documents empowering the individual to act as an Officer of the Company.