What are workers’ compensation class codes?

Workers Compensation Class Codes NCCIWorkers compensation class codes are codes that the insurance companies use to identify specific categories of work. For instance, you know a contractor supervisor by his title, however, an insurance company knows him as “5606”.

Insurance companies need to be able to categorize various types of work into class codes to be able to effectively estimate workers compensation rates for the appropriate risk associated with the work being performed.

For example, a 5606  (Contractor) will have more expensive work comp rate than an 8810 (Clerical) employee, because more dangerous work is being performed.

The insurance companies will then take all losses accumulated by each class code, and use them to factor a base rate for that type of work. If a particular company has proven to have losses above or below the industry average, their rate of insurance will adjust accordingly.

For numeric and alphabetic lists, please see our two pages below:

To learn more about defining manual classifications, determining manual rates (And much more), download The National Council on Compensation Insurance, a must-have for workers compensation insurance agents, brokers, and underwriters.

Are you paying too much for worker’s compensation insurance?

 


Lookup Workers Compensation Class Codes

Looking for workers compensation class codes? This site was built for you! We have a class code list for every state, all right here in the same place, for free! We gather our lists as published by the department of insurance of each state and publish links to the original material for your convenience.

You can use the search bar above to look find workers compensation codes. If you know the numeric code you are looking for, you can type in, and the page for that code will be on the search results. If you do not know the numeric code that you are looking for, try searching “Workers compensation code [Keyword for the industry]”. That search query will yield results for any workers compensation codes of which the keyword is included in the phraseology of the class code.

Why do some states have different class codes for the same type of work?

The rules and regulations for work compensation are unique for every state. Most states utilize the NCCI class code system. They are the national council on compensation insurance and have helped add consistency for work comp classifications across state lines. With states that use the NCCI workers compensation class codes, the classifications remain the generally the same for each of those states. However, some states still remain independent, or monopolistic.

What is the National Council on Compensation Insurance (NCCI)?

NCCI is and independent advisory organization that is largely funded by insurance companies. Most insurance companies use the NCCI for various services, including statistical data for workers compensation rates. NCCI functions to obtain and provide accurate statistical loss data that is used to set manual rates for workers compensation insurance. NCCI is the most widely used classification system in the United States.

What states do not use the NCCI classification codes?

There are only a few states that do not use the NCCI workers compensation class codes. Those states are California, New Jersey, New York, Delaware, and Pennsylvania. Texas has recently converted over to the NCCI classification system; however, they do have significant variations in specific classification rules. While most states do use the NCCI class codes, it is important to remember that some states have NCCI Scopes Manualadditional workers compensation class codes that are unique to their state.

What is the NCCI Scopes Manual?

The NCCI scopes manual is used by insurance professionals (Such as underwriters) to identify the class code associated with each type of occupational work. The code is a three or four digit number associated to each type, or “classification” of work. The scopes manual offers detailed underwriting information that elaborates on how every type of work should be classified. Since the scopes manual is the industry standard for workers compensation class codes, it is important for every underwriter to have a copy. You can purchase directly from the NCCI Online Catalog. Visit their page by clicking the image to the right.

Lookup Workers Compensation Class Codes by State

Click on a state below to view the correlating index list of workers compensation class codes. Please note that while most states use the NCCI classification system, each state has their own (Similar, many times) variation of it. Additionally, some states use a completely different coding system.

You can also view our list of Workers Compensation State Funds by State:

List of Workers Compensation Funds State

List of Workers Compensation Funds State

What is the purpose of Workers Compensation Codes?

Workers Compensation Codes consist of a 3-to-4 digit system assigned by either a state rating bureau or the NCCI. Class Codes are used to differentiate various job duties done by employees in an industry. Most of the classification systems contain unique codes which provide premium guidelines for the workers’ compensation insurance.

The basic code generally denotes a particular industry such as wholesalers, retailers, manufacturers, restaurants, and truckers. Employees are generally grouped into the classification codes that are based on similar job functions. There are certain criteria that are arranged for business operations or to have a basic gathering statistical experience. This information is gathered to help construct the workers’ compensation insurance rates for that industry.

For an insurance company, this established a starting point when underwriting a business. A proper classification helps estimate expenses or losses related to the risk they are insuring. This system of workers compensation class codes highlights the importance of classifying a business correctly. Proper classification is necessary to provide correct workers compensation insurance at a fair and sustainable rate.

 

Insurance Marketing Email

Mike Smith, Owner of Class Codes

Note from the Author

Hello everybody! I recently created the YouTube video above, “What are workers compensation class codes?” If you could please watch the video from beginning to end, like, follow my channel, and share, I would GREATLY appreciate it. YouTube looks at these factors (Particularly for the first few days after the video has been posted) and will permanently influence the ranking of this video accordingly. Thank you for your help and for visiting classcodes.com!

 

Why is it important to be correctly classified?

It is important to be correctly classified for a few reasons, such as:

  1. In the event of an audit (Or injury that leads to an audit), if the carrier determines that you were incorrectly classified they can retroactively bill you for up to three years of premium that was incorrectly classified for that policy year.
  2. If your employees are misclassified, their claim frequency and loss amounts will be out-of-line with the norm for that class code. Insurance companies use statisticians to keep track of unusual loss patterns, and they will figure it out eventually, resulting in the outcome from bullet point #1.
  3. Being incorrectly classified can cause you to get dropped by your insurance carrier. Getting dropped is going to put you in a frantic rush to find new coverage, putting your business to a halt in the meantime. When you then try to get insurance from another carrier, the first question they will ask is “Have you recently been dropped or denied coverage?” If this is true, it will raise a big red flag for the new insurance company. They will most likely either refuse to quote or markup the rate due to the increased risk. As a business, the best way to save money on your workers’ compensation insurance is to build a long, trusting relationship with your carrier.
Make sure Your Employees are Correctly Classified

To make sure your employees are correctly classified, you can generally trust your insurance agent and insurance company to assign you to the correct code. If you disagree with the code you have been assigned you can appeal the classification by following the link to contact the department of insurance for your state. In doing so can have an auditor come to your site, inspect the business operations, and provide a ruling.

Workers Compensation Premium Rate Ranking by State

Every year the Oregon Department of Consumer and Business Services provides an “Oregon Workers’ Compensation Premium Rate Ranking Summary.” In this report they provide many helpful pieces of information, such as:

  • Workers Compensation Premium Index Rates
  • Top 10 Workers Compensation Classifications by Occupation
  • Workers Compensation Premium Rate Ranking
  • Net Five-Year Voluntary Premium Level Change

You can view the workers’ compensation premium index rates below:

Workers Compensation Code Premium Index Rates

Workers Compensation Code Premium Index Rates by State

Top Ten Workers Compensation Classifications by Occupation:

  1. Clerical Office Employees
  2. Salespersons – Outside
  3. College: Professional employees and Clerical
  4. Physician and Clerical
  5. Restaurant
  6. Hospital: Professional Employees
  7. Store: Retail
  8. Automobile Service/Repair center and Drivers
  9. Trucking: All Employees and Drivers
  10. Retirement Living Centers: Healthcare Employees

Source: Oregon Workers’ Compensation Premium Rate Ranking Summary.

You can view the Workers Compensation Premium Rate Ranking Study below:

Workers Compensation Premium Rate Ranking

You can view the Workers compensation Premium Change by State below:

Workers Compensation Code Premium Change

Workers Compensation Code Premium Change by State

Workers Compensation Rates by Class Code

As part of the workers’ compensation premium rate ranking study, you can view the estimated rates broken down by class code and state. As noted by the study, the rates are calculated by using manual rates and may include loss cost. You can view their study by clicking on the images below.

0005 - 0037
Workers Compensation Class Code 0005 0016 0037

Workers Compensation Rates by Class Code: 0083, 0106, and 2702.

0083 - 2702
Workers Compensation Class Code 0083 0106 2702

Workers Compensation Rates by Class Code: 0083, 0106, and 2802.

2710 - 2802
Workers Compensation Class Code 2710 2731 2802

Workers Compensation Rates by Class Code: 2710, 3632, and 3724.

3030 - 3724
Workers Compensation Class Code 3030 3632 3724

Workers Compensation Rates by Class Code: 3030, 3632, and 3724.

5183 - 5213
Workers Compensation Class Code 5183 5190 5213

Workers Compensation Rates by Class Code: 5183, 5190, and 5213.

5221 - 5445
Workers Compensation Class Code 5221 5403 5445

Workers Compensation Rates by Class Code: 5221, 5506, and 5551.

5474 - 5551
Workers Compensation Class Code 5474 5506 5551

Workers Compensation Rates by Class Code: 5474, 5506, and 7228.

5645 - 7228
Workers Compensation Class Code 5645 6217 7228

Workers Compensation Rates by Class Code: 5645, 6217, and 7403.

7229 - 7403
Workers Compensation Class Code 7229 7380 7403

Workers Compensation Rates by Class Code: 7229, 7380, and 7403.

7539 - 7720
Workers Compensation Class Code 7539 7600 7720

Workers Compensation Rates by Class Code: 7539, 7600, and 7720.

8006 - 8018
Workers Compensation Class Code 8006 8017 8018

Workers Compensation Rates by Class Code: 8006, 8017, and 8018.

8033 - 8380
Workers Compensation Class Code 8033 8232 8380

Workers Compensation Rates by Class Code: 8033, 8232, and 8380.

8393 - 8810
Workers Compensation Class Code 8393 8742 8810

Workers Compensation Rates by Class Code: 8393, 8742, and 8810.

8824 - 8833
Workers Compensation Class Code 8824 8832 8833

Workers Compensation Rates by Class Code: 8824, 8832, and 8833.

8835 - 8868
Workers Compensation Class Code 8835 8842 8868

Workers Compensation Rates by Class Code: 8835, 8842, and 8868.

9014 - 9052
Workers Compensation Class Code 9014 9015 9052

Workers Compensation Rates by Class Code: 9014, 9015, and 9052.

9058 - 9083
Workers Compensation Class Code 9058 9082 9083

Workers Compensation Rates by Class Code: 9058, 9082, and 9083.

9084 - 9403
Workers Compensation Class Code 9084 9101 9403

Workers Compensation Rates by Class Code: 9084, 9101, and 9403.

NCCI’s Top Five Misclassified Workers Compensation Codes


According to NCCI’s Classification Inspection Program Update, the top five misclassified codes are:

  1. 8017: Store – Retail NOC
    • Reclassified to:
      • 8010: Store – Hardware
      • 8018: Store – Wholesale – NOC
      • 8008: Store – Clothing, Wearing Apparel, or Dry Goods – Retail
      • 8044: Store – Furniture and Drivers
      • 9083: Restaurant – Fast Food
  2. 8018: Store – Wholesale – NOC
    • Reclassified to:
      • 8010: Store – Hardware
      • 8032: Store – Clothing, Wearing Apparel, or Dry Goods -Wholesale
      • 8017: Store – Retail NOC
      • 8232: Building Material Dealer – New Materials Only – All Other Employees & Yard, Warehouse, Drivers
      • 8046: Store – Automobile Parts and Accessories NOC & Drivers
  3. 8010: Store – Hardware
    • Reclassified to:
      • 8018—Store—Wholesale—NOC
      • 8017—Store—Retail NOC
      • 8058—Building Material Dealer—New Materials Only—Store Employees
      • 8046—Store—Automobile Parts and Accessories NOC & Drivers
      • 8111—Plumbers’ Supplies Dealer & Drivers
  4. 8044: Store – Furniture and Drivers
    • Reclassified to:
      • 8017: Store—Retail NOC
      • 8018: Store—Wholesale—NOC
      • 8010: Store—Hardware
      • 9519: Household and Commercial Appliances—Electrical—Installation, Service, or Repair & Drivers
      • 8235: Sash, Door, or Assembled Millwork Dealer & Drivers
  5. 8046: Store – Automobile Parts and Accessories NOC & Drivers
    • Reclassified to:
      • 8380: Automobile Service or Repair Center and Drivers
      • 8018: Store – Wholesale – NOC
      • 8010: Store – Hardware
      • 8391: Automobile Repair Shop and Parts Department Employees, Drivers
      • 3821: Automobile Recycling and Drivers
Summary of Commonly Misclassified Codes

Store operations are supposed to be classified based on the principal type of merchandise sold (Meaning more than 50% of gross receipts), and whether those sales are retail or wholesale.

Retail codes apply to the sale of merchandise to the general public for personal or household consumption, not for resale, and not business-to-business. Wholesale applies to the sale of merchandise to businesses that will resale to others (Business-to-business), not for direct personal or household consumption.

Specific reasons for the reclassification of these codes include:

  • Code 8017: Store – Retail NOC
    • The biggest reason why this code was reclassified was because the gross receipts exceeded 50% for one type of product sold. For example, a company might have been classified as 8017 because they are a retail store that sells multiple products. However, if more than 50% of the company’s sales were for clothing, the proper classification would be 8008: Clothing, Waring Apparel, or Dry Goods – Retail. Likewise, if furniture sales had exceeded 50% of the company’s gross receipts, then code 8044: Store – Furniture and Drivers would have been applicable.
  • Code 8018: Store – Wholesale NOC
    • Same as with code 8017, the main reason why this code was reclassified was due to the fact that gross receipts exceeded 50% for a specific type of product.
  • Code 8010: Store – Hardware
    • This classification was often reclassified to 8111 (Store – Plumbers’ Supplies Dealer) or 8046 (Auto Parts and Accessories). When more than 50% of gross receipts were for plumbing supplies or auto parts, they would be reclassified accordingly.
  • Code 8046: Store – Automobile Parts and Accessories NOC and Drivers
    • This code was commonly reclassified to 8380 (Automobile Service or Repair Center). The main difference being whether or not the primary operations were servicing cars or working on cars. It is not uncommon for companies in this industry to both service cars and sell auto parts and accessories. The deciding factor is which function is the predominant operation for the company.

Source: NCCI’s Classification Inspection Program Update

Workers Compensation Class Codes