Glossary  /  Classification & payroll

Governing classification

The 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.

Most policies carry several class codes, but one describes the core business. Standard exception classes (typically clerical and outside sales roles, where the rules permit them to be separated) sit outside it.

When an employee's duties cannot be cleanly separated, or when the records to support a separation don't exist, payroll generally falls to the governing classification or to the highest-rated code the person worked in.

Related terms

  • Class codeA 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.
  • 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.

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