Workers Comp Class Code

Definition

Workers compensation class codes are four-digit classification codes — maintained by NCCI in most states and by independent bureaus in a few states like California and New York — that categorize the type of work employees perform and assign a corresponding premium rate per $100 of payroll. For example, NCCI Class Code 8810 (clerical office employees) might carry a rate of $0.20/$100, while Code 5403 (carpentry) could carry $10–$25/$100 depending on the state, reflecting the vastly different injury risk profiles. A business with multiple types of employees must correctly assign payroll to each applicable class code rather than applying a single code to everyone — incorrectly using a low-risk code for employees doing physical work is considered premium fraud and can result in policy cancellation and back-premium assessments. Auditors verify class code assignment at the annual workers comp payroll audit, which reconciles estimated payroll used to set the initial premium against actual payroll. Some states allow split codes when employees perform multiple roles, so a carpenter who also does some clerical work can have their time allocated proportionally. Challenging a code classification is possible through the rating bureau's dispute process if the assigned code does not accurately describe the work performed.

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