Glossary  /  Classification & payroll

Class code

Also called classification code, workers comp class code

A class code is a four-digit number that groups businesses or job duties by the hazard of the work, and determines the rate applied to payroll assigned to it.

Classification follows what the work actually is, not job titles and not what the business calls itself. Two people at the same company can carry different codes if their duties genuinely differ.

Assignment is driven by the business's operations as a whole, with certain support roles separated out where the rules allow it. Getting this wrong in either direction is a problem: too high and the business overpays every month, too low and the correction arrives at audit.

Some codes appear on almost every policy. In the NCCI system, 8810 covers clerical office employees and 8742 covers outside salespeople. These are the most common standard exceptions, which can be split from a business's main code. Others are specific to an industry, such as 9015 for building operation employees or 3724 for machinery and equipment installation and repair.

Code numbers and their wording differ between NCCI and the independent bureau states, so the same four digits can mean different things in California or New York than they do elsewhere. The governing manual is always the one for the state where the work was performed.

Why it matters at audit

Classification is the single largest lever on workers' compensation premium, because it selects the rate that everything else multiplies against.

Frequently asked questions

How do I find my workers' comp class code?

Your class codes are listed on the policy's information or declarations page, next to the estimated payroll for each. The definition of each code is in the classification manual published by NCCI or your state's rating bureau.

Can a business have more than one class code?

Yes. Most policies carry a governing code for the main operation plus standard exceptions such as clerical or outside sales, and businesses with genuinely separate operations can carry additional codes where the rules allow.

Who decides which class code applies?

The carrier assigns codes when the policy is written, based on how the business describes its operations. The premium audit then checks those codes against the work actually performed and can reclassify payroll if they don't match.

What is class code 8810?

In the NCCI system, 8810 is the clerical office employee classification. It applies only to staff whose duties are strictly clerical and performed in an office area physically separated from the business's other operations.

Related terms

  • Governing classificationThe governing classification is the class code that best describes a business's principal operation, and the one that carries the most payroll aside from standard exceptions.
  • Division of payrollDivision of payroll is the practice of splitting one employee's wages across multiple class codes when they genuinely perform work in more than one classification.
  • Rate per $100 of payrollWorkers' compensation rates are expressed per $100 of payroll, so a rate of 7.50 means $7.50 of premium for every $100 paid to employees in that classification.
  • NCCINCCI, the National Council on Compensation Insurance, is the rating and data organization that maintains the classification system and files loss costs for workers' compensation in most US states.

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