The Workers Compensation Act (“Act”) provided that when a contractor employed a subcontractor, the contractor could be liable to WorkSafeBC (“WCB”) for insurance premiums owing in connection with the work or service being performed on the contractor’s behalf. The Act also provided that a buyer purchasing business assets of a seller could also be liable for insurance premiums in connection with the seller’s business.

To protect contractors and buyers from potential liability, the WCB developed a clearance system which enabled anyone to request a clearance letter from the Assessment Department prior to hiring subcontractors or purchasing assets. The clearance letter set out whether a subcontractor was complying with the registration and payment requirements of the Act.

At issue was whether changes were required to the Contractor Liability and Statutory Lien policies to clarify the clearance system, specifically the function of clearance letters and the importance of the clearance date.

Consultation closed February 14, 2007.