Classification codes determine the base rate applied to your payroll for workers’ comp purposes — and getting placed in the wrong one is one of the most common, and costliest, mistakes we find in audits.
How Classification Codes Work
Each code corresponds to a category of work with an associated risk level and base rate. A business with employees performing multiple types of work may have payroll split across multiple codes — but only if that split is properly documented and supported. Without correct splitting, all payroll often defaults to the highest-rated code.
Why This Gets Misapplied So Often
Codes are usually set when a policy is first written and rarely revisited as a business evolves. A contractor who shifts from hands-on field work to more supervisory work that adds a new placement category, can end up paying field-labor rates for work that no longer matches that description.
How to Check Your Own Classification
- Pull your current policy declarations page and note the listed code(s)
- Compare the code description against what your employees actually do day-to-day
- If there’s a mismatch, request a classification review — this is something we do at no cost for every client
Payroll classification audit guide → | E-Mod audit checklist → | Browse industries to see code issues by sector → | Get a free classification review →
