Updated 2026-11-01
A workers compensation class code is a number that describes the type of work your business does. Each code carries its own rate per $100 of payroll, so the code assigned to your employees is one of the biggest factors in what you pay.
Who sets the codes
In many states, codes come from the National Council on Compensation Insurance (NCCI). Several states use their own rating bureaus and code systems, including California, Delaware, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania and Wisconsin. Monopolistic states set their own classifications through the state fund.
How a business is classified
Insurers generally assign a governing class that describes the main business, then add standard exception classes where the rules allow. The most common exceptions are:
- Clerical office employees who work in an office separated from operations.
- Outside salespeople who work mainly away from the premises.
- Drivers in some situations, depending on the industry and state.
Payroll for an employee generally follows the classification of the work they do. In some industries, especially construction, payroll can be divided between codes only when records clearly show time spent on each type of work.
Signs your code may be wrong
- Your policy lists a code that describes work you do not perform.
- Office staff are included in a field or shop classification.
- Your business changed services but the policy did not change.
- A competitor in the same trade pays a very different rate in the same state.
What to do about it
Start by comparing the code description with what your employees actually do every day. Share job descriptions with your agent. If a classification looks wrong, the insurer or rating bureau can review it; in some states you can request a formal inspection or classification ruling.
Accurate classification works in both directions. Understating hazardous work can lead to a large audit bill later, so the goal is the correct code, not the cheapest one.
Class code examples by industry
The industry guides walk through typical classifications and exceptions: restaurants, where kitchen and front-of-house staff usually share one code; computer consultants, who often qualify for clerical or professional codes; and contractors, where payroll is commonly split across trades. Some states use their own bureau instead of NCCI, so also check your state on the workers comp by state page.