Say you hire a drywall sub for a three-week job.
They do good work. You pay them on time. Everybody’s happy.
Then a letter shows up from WorkSafeBC asking you to cover premiums your sub never paid on that job. Wait, what?
That’s exactly what a clearance letter protects you from. And if you hire subs in BC, you should be pulling one for every one of them.
What is a WorkSafeBC clearance letter?
In WorkSafeBC’s own words, “a clearance letter confirms a business is registered with us and paying its premiums.”
That’s it. One page that tells you whether the sub you’re about to hire is set up with WorkSafeBC and current on what they owe.
Why should you care whether your sub paid their premiums? Because of the next part.
Why do BC contractors need clearance letters?
Here’s how WorkSafeBC puts it:
“If you hire a registered subcontractor who is not making required payments to WorkSafeBC, you could be liable for insurance premiums relating to the work or service they provided to you.”
Read that again. Their unpaid premiums can become your bill.
And the only way out is the letter. To be off the hook, WorkSafeBC says you need a clearance letter “addressed to you, confirming that your subcontractor was ‘active and in good standing’ for the entire period of your contract.”
Three things in that sentence matter:
- It comes from WorkSafeBC. Not a screenshot, not a promise from the sub.
- It’s addressed to you. A letter your sub pulled for some other contractor doesn’t cover you.
- It covers the entire period of your contract. Not just the day they started.
When should you get a clearance letter?
WorkSafeBC’s advice is short: “Always get a clearance letter before and after you receive services from a subcontractor.”
Before, so you know they’re in good standing when the job starts.
After, so you know they stayed in good standing the whole way through. A sub can be current in March and behind by May.
On a long job, it’s worth checking partway through too. It takes a couple of minutes. Honestly, that’s two minutes well spent.
How do you get a WorkSafeBC clearance letter?
Online, and it’s quick.
WorkSafeBC has a clearance letter application on their site. A few things worth knowing:
- You can search by account number or name. Use the firm’s WorkSafeBC account number (six or nine digits) or its exact legal or trade name.
- You can check a lot of subs at once. The tool lets you search up to 150 firms at a time.
- You don’t need to log in for a basic search.
- You can get alerts. If you sign up for WorkSafeBC’s online services, you can get clearance alerts on the firms you hire.
Some letters can’t be pulled online. WorkSafeBC handles a few kinds by phone or fax only, including clearances for firms that aren’t registered, limited-period clearances and asset purchases.
So here’s a simple habit: ask every new sub for their WorkSafeBC account number when you hire them. Then pulling the letter takes seconds.
What does “active and in good standing” really cover?
This trips people up.
WorkSafeBC says a letter showing a firm as “active and in good standing” is honoured “up to the date to which the firm has satisfied its assessment remittance requirements.”
In plain English: the letter covers you up to the date your sub has paid their premiums through. Not past it.
That’s why the “after” letter matters. If your sub’s job ran into a period they haven’t paid for yet, the first letter won’t stretch to cover it.
What are the most common clearance letter mistakes?
These are the ones that cause the most trouble:
- Pulling one letter at the start and never again. The job outlasts the coverage, and there’s no “after” letter.
- Accepting a letter addressed to someone else. It has to be addressed to you.
- Skipping it for small jobs. A one-week job can still leave you holding someone’s premiums.
- Not keeping the letters. If WorkSafeBC asks later, you need to be able to find the letter for that sub and that job.
- Hiring a sub who isn’t registered at all. Call WorkSafeBC before the work starts, not after.
What if a sub isn’t in good standing?
Then stop and sort it out before the work starts. Not after.
Tell the sub what the search showed. It might be a simple fix on their end, like a late payment they can catch up on. Once they’ve sorted it with WorkSafeBC, pull a fresh letter.
What if the job’s already underway when you find out? Don’t just keep paying and hope. Call WorkSafeBC and ask what it means for you before the next payment goes out.
And if a sub won’t give you their WorkSafeBC account number at all? That tells you something. A registered business in good standing has nothing to hide.
Honestly, the sub to watch isn’t just the one who was never registered. It’s the one who was fine in March and quietly fell behind by June.
Where do clearance letters fit in your books?
This is where a lot of contractors get sloppy, and it’s an easy fix.
Keep the clearance letters with each sub’s file, next to their bills and your payments. Before a payment run, check that every sub you’re paying has a current letter. After the job, pull the closing letter and file it.
While you’re at it, collect the sub’s business details for T5018 slips. If more than half your business income comes from construction, CRA wants you to report what you paid each subcontractor. Same sub file, same habit.
Done this way, a WorkSafeBC question two years from now is a two-minute lookup, not a panic.
Want a bookkeeper who knows this stuff?
Trades and construction is our specialty at MBC Canada. We reconcile WorkSafeBC premiums every month, and we know where clearance letters fit in a contractor’s books. Our bookkeeping starts at $800 a month, and here’s what decides your number.
Want to see everything we do? It’s on our services page. Or book a free 30-minute call and we’ll look at your books together.