Workers' Comp Class Codes for Contractors: A Quick Guide

Your workers' comp premium is calculated by multiplying your payroll by a rate — and that rate is tied to your class code. Get the wrong class code and you'll either overpay or face a large audit bill. Here's what contractors need to know.

How Class Codes Work

Class codes are a standardized system (maintained by NCCI in most states) that groups workers by the type of work they do and the associated injury risk. High-hazard work has high rates; lower-hazard work has lower rates.

Each code has a base rate per $100 of payroll. For example, a roofing code might have a rate of $15 per $100 of payroll — meaning for every $10,000 in payroll, you'd owe $1,500 in WC premium (before mod and other adjustments).

Most Common Contractor Class Codes

These are NCCI codes used in most states (some states like California, New York, and Texas use independent or modified systems):

| Trade | NCCI Code | Typical Rate Range | |---|---|---| | Roofing | 5551 | High ($10–$25/$100 payroll) | | Framing / Carpentry | 5645 | High ($8–$18/$100 payroll) | | Plumbing | 5183 | Moderate ($5–$12/$100 payroll) | | Electrical | 5190 | Moderate ($4–$10/$100 payroll) | | Drywall | 5445 | Moderate ($5–$11/$100 payroll) | | Painting (exterior) | 5474 | Moderate-high ($6–$14/$100 payroll) | | HVAC | 5537 | Moderate ($5–$11/$100 payroll) | | Concrete work | 5213 | High ($7–$15/$100 payroll) | | Landscaping | 0042 | Moderate ($5–$10/$100 payroll) |

Rates vary significantly by state. California and New York are generally higher than the national average; competitive states like Arizona and Texas are often lower.

Misclassification Risk

Misclassification happens when:

• Work is assigned to a lower-rated code than it should be (either by error or intentionally)
• Workers doing multiple types of work are all assigned to the lower rate

At audit time, the carrier reviews payroll records, job descriptions, certificates of subcontractors, and sometimes job site inspections. If they find payroll that should have been in a higher-rated code, they'll reclassify it — and you'll owe the difference in premium plus any applicable penalties.

Intentional misclassification is a serious issue. Unintentional misclassification is very common and usually resolved at audit without major consequences — but it can result in a large unexpected bill.

How to Verify Your Class Code

The best way to confirm your code:

1. Ask your agent — we verify codes as part of the quoting process
2. Check NCCI's Scopes manual if you have access
3. Review your policy's declarations page (the code is listed there)
4. Compare to your prior carrier's code — if it changed, ask why

Payroll Allocation for Dual-Trade Crews

If your workers perform two different types of work — say, a crew that does both framing (5645) and finish carpentry (a lower-rated code) — you may be able to split their payroll between codes.

This requires:

• Separate time records for each type of work
• Clear documentation at audit
• Carrier approval of the split

Without records, the carrier will assign all payroll to the highest-rated code the worker performed. This is a major source of audit surprises for contractors who do multiple types of work.

Audit Implications

Everything above matters most at audit time. The carrier's auditor will ask for:

• Payroll records (by employee, by type of work)
• Subcontractor certificates (to exclude their payroll from your audit)
• Job descriptions or contracts if the work type is unclear

Having organized records going into audit significantly reduces your exposure. If you're unsure whether your current policy has the right codes, call us before your audit — not after.

Call 844-967-5247 to verify your class codes and make sure you're in the right program.