Status of workers, independent contractors and employers

To be eligible for compensation under The Workers Compensation Act (the Act), a person must fall within the Act’s definition of worker.  Determining whether someone is a worker under the Act is therefore a key component in any decision relating to entitlement to compensation. It is also a key factor in determining who is responsible for paying for a person’s Workers Compensation Board of Manitoba (WCB) coverage.

The definition of worker found at subsection 1(1) of the Act is complex.  It sets out several types of worker, including:

• A person who enters into or works for another under a contract of service or apprenticeship.
• A person who has purchased his or her own optional coverage; and a person who the WCB deems to be a worker.

In many traditional employment relationships a service provider works for a principal and the principal pays the service provider wages resulting in the issuance of a T4 slip. In such cases it is clear that the service provider is a worker within the meaning of the Act.  It is also clear that the principal is an employer who is responsible for paying for the worker’s coverage.  Employers do so by including the worker as part of the assessable payroll and paying WCB premiums on their behalf.

In industries where contractors and subcontractors are prevalent, the relationships are less clear. In such circumstances the WCB must determine if the service provider is a worker, an independent contractor, or an employer.

This policy:

• Describes when the WCB will allow individuals to purchase their own optional coverage and the consequences that flow from such a purchase.
• Explains that, for the purposes of determining entitlement to compensation, the WCB must be satisfied that a service provider is a worker within the meaning of the Act in the context of the working relationship he or she was involved in at the time of injury.
• Outlines the circumstances in which the WCB will deem a service provider to be a worker under the Act and the consequences that flow from this in terms of who is responsible for paying for the service provider’s coverage.

The policy also provides guidance on how to determine the amount of a worker’s assessable earnings when he or she does not receive a T4 slip from the employer.

The relevant legislative provisions and glossary of key terms are contained in Appendix A.