In New Brunswick, principal contractors must obtain a WorkSafeNB Clearance Certificate before a subcontractor begins work. This certificate proves the subcontractor is registered and has paid their premiums, which protects your business from being held financially liable for their unpaid assessments.
Hiring a subcontractor is a standard practice in the construction, forestry, and maintenance industries. Whether you are managing a major commercial build in Moncton, a residential roofing project in Fredericton, or a plumbing retrofit in Saint John, you rely on specialized trades to get the job done.
However, many business owners do not realize they can be held responsible for their subcontractors’ debts. Under the New Brunswick Workers’ Compensation Act, if a subcontractor fails to pay their WorkSafeNB premiums, the principal contractor can be forced to pay the bill. Requesting a Clearance Certificate is the only way to shield your company from this massive financial risk. 💰
Step-by-Step Process in New Brunswick
Securing a Clearance Certificate is a straightforward administrative task, but it must be done proactively. Do not let a subcontractor swing a hammer or start a vehicle on your site until this documentation is verified.
Step 1: Ask the Subcontractor for their Status
Before finalizing your contract, ask the prospective subcontractor for their WorkSafeNB employer number.
Every business in New Brunswick with three or more workers (and sometimes fewer, depending on the industry) is legally required to be registered. If the subcontractor claims they are exempt, it is generally wise to request a formal letter of exemption from WorkSafeNB to protect your own liability.
Step 2: Generate the Certificate Online
You do not need to call the government and wait on hold to get a clearance. WorkSafeNB operates an online portal called MyServices. 💻
By logging into your employer account, you can use the “Clearance Certificate” tool. Simply enter the subcontractor’s business name or employer number. The system will instantly tell you if their account is in good standing and generate a digital certificate.
Step 3: Hold Back Payment if Necessary
If you check the system and the subcontractor is not in good standing (meaning they owe money to WorkSafeNB), you must act immediately.
The law allows-and expects-the principal contractor to hold back funds from the subcontractor’s invoice to cover the owed WorkSafeNB premiums. You then remit those held funds directly to WorkSafeNB on the subcontractor’s behalf.
Step 4: Keep Certificates in Your Minute Book
Clearance Certificates are only valid for a specific period, usually expiring at the end of a financial quarter. 📁
You must request a fresh certificate every time you are about to release a payment to the subcontractor, not just when they start the job. Keep all these printed or digital certificates safely stored for your annual payroll audit. A local corporate lawyer or accounting firm can help you set up an organized compliance system.
How Much Does it Cost in New Brunswick?
Protecting yourself from subcontractor liability is entirely free, but failing to do so can be incredibly expensive.
| Service / Liability | Estimated Cost (CAD) | Description |
|---|---|---|
| Generating a Certificate | Free ($0) | WorkSafeNB provides unlimited access to the online clearance system at no charge. |
| Unpaid Premium Liability | Variable ($500 – $50,000+) | If you hire a delinquent subcontractor, you are legally liable to pay whatever they owe the province. |
| Lawyer / Accountant Review | $200 – $500 | Optional. Hiring a local professional to draft subcontractor agreements that mandate good standing. |
- Out-of-Province Workers: If you hire a company from Nova Scotia or Quebec, they must generally register for coverage in New Brunswick while working here, and you still need a New Brunswick Clearance Certificate.
- Fines: Failing to report subcontractors during your annual payroll assessment can result in severe administrative fines and retroactive premium charges from WorkSafeNB.
How Long Does the Process Take?
In modern times, there is no excuse for delaying a clearance check. Using the WorkSafeNB MyServices portal, generating a Clearance Certificate takes less than 5 minutes.
However, if your subcontractor discovers their account is locked due to unpaid premiums, it may take them 3 to 7 business days to make the payment, have it clear the government’s bank, and get their account back into good standing. You should never allow them to start work during this waiting period.
Frequently Asked Questions (FAQ)
Do I need a Clearance Certificate for a sole proprietor?
It depends. Some independent contractors who work alone are exempt from mandatory coverage, but they can opt-in for personal coverage. Always ask WorkSafeNB for a ruling on whether the specific sole proprietor requires clearance to work on your site.
What if the subcontractor gets hurt and doesn’t have coverage?
If a subcontractor who is supposed to be covered gets injured on your site and they are not registered, WorkSafeNB will often classify them as your direct employee for the purpose of the claim. This will severely negatively impact your company’s claim history and premium rates.
Can I just write a clause in the contract saying I am not liable?
No. Private contracts cannot override the New Brunswick Workers’ Compensation Act. A clause saying the subcontractor accepts all liability is legally void if they fail to pay their premiums; WorkSafeNB will still come after you.
How often should I check the clearance status?
Best practice dictates that you check the certificate before the job begins, and then pull a new certificate immediately before you issue any progress payments or the final invoice payment.
Can a homeowner ask for a Clearance Certificate?
Absolutely. If you are a homeowner hiring a roofing or paving company, asking for their WorkSafeNB Clearance Certificate is a great way to ensure you are hiring a legitimate, insured, and responsible business.
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