Work Comp Dual Wage Classifications: How To Stay Ahead Of Them?
Are you a contractor with Workers Compensation coverage on employees working in trades like Carpentry, Plumbing, Electrical, Painting, etc? Then you’ve seen Dual Wage classifications on your Work Comp policy, which apply to designated construction trades where employees making above a certain amount per hour get a different classification (and much lower premium rate) than those in the same trade getting paid less than that amount per hour.
In California, the hourly wage threshold for ‘lower-paid’ vs ‘higher-paid’ workers is set by the Workers Compensation Insurance Rating Bureau, and the amounts are subject to change from year to year.
Some employers track those changes closely, as they may decide it makes financial sense to increase the hourly wage for employees paid just below their classification’s wage threshold, so that they are able to qualify for the higher-wage classification with its corresponding lower workers compensation rate. (Note: WCIRB rules dictate that in order to qualify for the high-wage lower rate classification, an employer must keep time cards that record daily start and stop times for each qualifying employee).
An important question for employers would be, what is the wage threshold for a specific trade in a given year? For example, at what dollar amount per hour does carpentry go from the low-wage to the high-wage classification this year?
Some insurance companies will spell out what the wage threshold amount is in the policy documentation delivered to their customers. Some, but not all.
So how can an employer confirm or verify what the wage threshold is for their own Workers Compensation policy, if that wage threshold amount isn’t listed there?
The WCIRB has a free Classification Search tool that can help answer that question, and many others, regarding Workers Compensation classifications.
To see what the currently assigned wage threshold amounts are for all dual wage classifications, go to the Classification Search tool, and then go to the “Filter By” drop-down menu in the search feature, and choose “Dual Wage Classifications” from the list, and then click Apply. All dual wage classifications should then be listed, along with their current wage thresholds.
Or click here to view the WCIRB’s printable table listing Dual Wage Classification Thresholds by Year for the past five years.
Using the tools above, you’ll be able to ensure you’re classifying your employees correctly according to the WCIRB’s current definitions to avoid surprises at audit time.
If you have questions on your workers’ comp classifications, contact one of our construction insurance experts for a free coverage analysis, we’re glad to help!
About the Author
Larry St. John is a 20+ year veteran of insurance and risk management for the construction and electronic security industries.
He can be reached at LStJohn@eclipseinsurance.com