California - Split Classifications in the Construction Industry
There are a number of class codes used in the construction industry that fall under two codes. These are often referred to as "wages above" and "wages below" classifications. The dual classifications are used to provide a fair distribution of premium over the different classifications. The split occurs in the $25 to $32 dollar per hour range (as of 2017). An employee who gets paid the higher wage is allowed a lower rate for coverage. As of 2017 for carpentry the split occurs at $32 per hour. Check your policy for specific information on where the split occurs.
Effective January 1, 2008 it became a requirement that time cards or time sheets exist to demonstrate that the actual payroll per hour as compared to hours worked meet the requirements for using the "wages above" classification. What this means in practical terms is that a contractor has to keep accurate time cards for work performed. The change specifically names 19 classifications.
- Automatic Sprinkler Installation
- Carpentry - Residences
- Carpentry - Commercial
- Concrete or Cement Work
- Electrical Wiring
- Excavation/Grading/Land Leveling
- Gas Mains or Connections Construction
- Glaziers
- Masonry
- Painting/Waterproofing
- Plastering or Stucco Work
- Plumbing/Refrigeration
- Roofing
- Sewer Construction
- Sheet Metal Work
- Steel Framing, Light Gauge - Residential
- Steel Framing, Light Gauge - Commercial
- Wallboard Application
- Water Mains or Connections Construction
If you are using any of these codes it is important to understand that if you have an audit from a Work Comp carrier you will be charged the higher rate (the wages below rate) if you cannot show time cards and hours worked for employees that you report as being in the "wages above" classification.
You can also read a related article on the Workers' Compensation Insurance Rating Bureau of California (WCIRB) web site and you can find out about record keeping requirements here or you can use a system such as this online or mobile app system.
At Venture Insurance Services we have access to many Workers Compensation markets. Call us for a quote.
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