Workers’ Compensation Insurance is a non-negotiable in the construction industry—and, as an employer, it’s important to understand dual wage classifications. But what, exactly, is the dual wage classification system? What do you, as an employer, need to understand about it? And what are the separate classifications for different types of construction workers with different compensation rates?
What Are Dual Wage Classifications?
Different types of jobs have different classifications for workers’ compensation purposes; the classifications help insurers determine how much an employer should pay in workers’ compensation premiums for their employees. But in construction, many of those classifications are broken down into two wage classes based on the employee’s wage rates. low wage and high wage. These separate classifications are what are known as dual wage classifications.
How Are Wage Classes also known as Class Codes Determined?
Each construction class has a certain wage threshold, set by the California Workers’ Compensation Insurance Rating Bureau (WCIRB), for determining whether an employee should be categorized as low wage or high wage; if the employee’s regular hourly rate falls above that threshold, they’re considered high wage. If it falls below the threshold? They’re categorized as low wages.
Generally, higher-wage employees have lower workers’ comp premiums (costs), even when they’re doing the same kind of work; this is because workers who demand a higher wage generally have more experience than their lower-wage counterparts—and, as such, are less likely to get injured or have to file a workers’ comp claim.
To classify a worker under the high wage classification (and qualify for lower premiums), you need to be able to verify their total number of hours worked through payroll records and time cards. (that not only shows the total hours worked, but also start times, end times, and any meal times or breaks).
If you don’t have the documentation to back up your employee’s total number of hours worked (and can prove that their hourly wage falls above the threshold), they’ll automatically be classified as low wage—and you may find yourself facing a hefty bill from your workers’ comp insurance services provider. And, no one likes hefty bills!
So What’s The Bottom Line? If you want to make sure that you do not over pay for your Worker’s Compensation Insurance, make sure to classify your employees correctly—and keep impeccable records that back up your classifications! We also suggest you consult with a broker that can shop and compare rates for you from all of the major and most competitive insurance carriers.
Here Are The Contractor Classifications With The Newest and Updated Dual Wage Thresholds:
| Class Code | Contractor Type | 2023 | NEW: 2024 |
| Threshold | Threshold | ||
| 5027/5028 | Masonry | $28 | $32 |
| 5183(1)/5187(1) | Plumbing | $28 | $31 |
| 5183(2)/5187(2) | Refrigeration Equipment | $28 | $31 |
| 5183(3)/5187(3) | Heating or Air Conditioning Equipment | $28 | $31 |
| 5185/5186 | Automatic Sprinkler Installation | $29 | $32 |
| 5190/5140 | Electrical Wiring | $32 | $34 |
| 5201(1)/5205(1) | Concrete or Cement Work – pouring or finishing of concrete sidewalks, driveways, patios, curbs or gutters | $28 | $32 |
| 5201(2)/5205(2) | Concrete or Cement Work – pouring or finishing of concrete floor slabs, poured in place and on the ground, and concrete slab-type foundations, for other than concrete buildings or structural steel buildings of multi-story construction | $28 | $32 |
| 5403/5432 | Carpentry | $35 | $39 |
| 5446/5447 | Wallboard Installation | $36 | $38 |
| 5467/5470 | Glaziers | $33 | $36 |
| 5474(1)/5482(1) | Painting or Wallpaper Installation | $28 | $31 |
| 5474(2)/5482(2) | Waterproofing | $28 | $31 |
| 5474(3)/5482(3) | Painting – water, oil, or gasoline storage tanks | $28 | $31 |
| 5484/5485 | Plastering or Stucco Work | $32 | $36 |
| 5538(1)/5542(1) | Sheet Metal Work | $27 | $29 |
| 5538(2)/5542(2) | Heating or Air Conditioning Ductwork | $27 | $29 |
| 5552/5553 | Roofing | $27 | $29 |
| 5632/5633 | Steel Framing | $35 | $39 |
| 6218(1)/6220(1) | Excavation – N.O.C. | $34 | $39 |
| 6218(2)/6220(2) | Grading Land | $34 | $39 |
| 6218(3)/6220(3) | Land Leveling | $34 | $39 |
| 6307/6308 | Sewer Construction | $34 | $39 |
| 6315(1)/6316(1) | Water Mains or Connections Construction | $34 | $39 |
| 6315(2)/6316(2) | Gas Mains or Connections Construction | $34 | $39 |
If you have any questions about Worker’s Compensation and or would like a Free Quote & Consultation, Contact: Kevin at: 530.320.3617 or [email protected] Or, CLICK HERE to get started with your free quote and consultation on your Most Affordable options for Workers’ Compensation Insurance for Contractors.