The workers' comp class code for remote employees, and what it changes at audit

The workers' comp class code for remote employees is 8871, Clerical Telecommuter Employees. It applies to clerical staff who work more than half their time from a workstation that is not any location of the employer. Most states already had it. Texas established it by Commissioner's Order 2026-9844, signed March 18, 2026, applying to new and renewal policies effective on or after 12:01 a.m. on July 1, 2026.

So for a large share of policies the code is no longer theoretical. It is on the current term, and the audit at the end of that term is the first time anyone has to prove who belongs in it.

What qualifies for the workers' comp class code for remote employees?

The Texas order states three conditions. Employees are assigned to 8871 if their duties are clerical, they telecommute at least half the time, and the classification for the business does not include clerical employees.

The manual rules behind it add the detail that decides real cases. Assign 8871 when the basic classification wording applicable to the business does not include clerical telecommuter employees, no other rule prohibits it, and the employee meets both the clerical job duty requirements and the workstation requirements.

The job duties are the same list that governs code 8810, and the disqualifiers are worth knowing before you sort anyone. An employee is disqualified from 8810 and 8871 alike for conducting outside sales or meeting with outside representatives, for directly supervising nonclerical employees at a work area that does not meet the clerical workstation criteria, for performing physical labor, demonstration, or instruction, for any work in an area exposed to operative hazards, and for performing work that is included in the basic classification for the employer.

That last one catches more people than the others. If the work someone does at their kitchen table is work the basic classification already contemplates, the location does not rescue it.

Where does the workstation have to be?

Separate and distinct from any location of the employer. The rule allows exactly two arrangements: a clerical workstation inside the telecommuter's residence, or shared office space away from any location of the employer.

There is also a restriction that a carrier asked to have lifted and did not get. Code 8871 must not be assigned when the basic classification wording applicable to the employer includes "clerical" in the phraseology, and the rule spells out that this holds even if the telecommuter's workstation sits in a state where the employer has no other operations.

Texas Mutual filed the lone written comment on the item. It supported B-1451 but recommended that 8871 be available in exactly that cross-state case, where an employer needs to cover only a telecommuter in another state. NCCI answered that the change would be inconsistent with existing classification procedure rules and would require significant additional amendments. TDI declined it, reasoning that the exception would create an inconsistency in how standard exception class codes are assigned and could leave similar telecommuter risks assigned to different classifications depending on where the employer's operations happen to be.

What happens when someone splits time between home and the office?

This is the question every hybrid employer will hit, and the answer is not a split.

NCCI's interchange of labor rule assigns payroll to 8810 when the employee spends 50% or less of the time worked telecommuting, and to 8871 when the employee spends more than 50%. Both codes sit on the list of standard exceptions that are not available for division of payroll for interchange of labor, and both are excluded from the rule that would otherwise assign an interchanging employee's payroll to the highest-rated classification.

The whole of the employee's pay lands in one code. There is no proportional allocation, and an auditor who finds one has an adjustment to make.

Worth noting a conflict in how this gets described, because it decides real cases. The Texas order's findings of fact summarise the test as telecommuting "at least 50%" of the time. The manual rule the order adopts puts the line at more than 50%, with exactly 50% falling to 8810. Those two readings part company over the employee who splits the week evenly.

The manual rule is the one to follow. A percentage appears nowhere else in the item: the interchange of labor rule carries the only threshold in the filing, and the rules for assigning 8871 state no percentage at all. The order also states that the filing, including exhibits, is incorporated by reference into it, which makes the exhibit language operative and the sentence in the findings a summary of it.

Which records settle it at audit?

Time, not intent. The classification turns on the share of time worked in each place, so the file needs something that measures that share.

What tends to work: timekeeping records that carry a location or work-type field, a written remote-work agreement that states the schedule, badge or VPN data covering the term, and a payroll register that already segregates the employees you are claiming. What does not work is a statement made during the audit describing how the company generally operates. An auditor is not being difficult by declining it. The rule turns on a percentage, and a percentage needs a denominator.

Two further points of housekeeping. The share is measured over the policy period, so an employer who went from mostly-office to mostly-remote in month seven has an employee who may not sit cleanly on either side of the line for the term as a whole. And class code assignment is decided per employee, not per department, so a team of six can land in both codes.

Rating-wise, nothing dramatic happens yet. NCCI stated that the initial loss cost and rating values for 8871 equal those of 8810 until 8871 accumulates enough experience to be rated on its own, and Texas assigned the code to hazard group C effective July 1, 2026. The premium effect today is close to neutral. The point of getting it right is that the experience being collected now is what sets the rate later, and a misassignment recorded across a whole term is a misassignment that has to be unwound at some point.

This is not the only classification change in flight

Texas alone approved three NCCI manual filings by orders dated September 15, 2026, including Item B-1452, revising Basic Manual classifications for bakeries and restaurants. Classification wording moves every year, usually without anyone telling the employer, and it reaches you through a renewal declarations page you may not read line by line. California's own dual wage threshold changes are a version of the same problem in a different state.

Before your next audit, run the employee list against the two clerical codes yourself and see whether the answer your records support matches the answer on your policy. The audit checklist covers the rest of the file. The remote question is the one most likely to be wrong this year, because until this summer, in some states, there was no right answer to give.