Workers Compensation Codes In California – Their Importance and Usage

April 16, 2016 News

The workers compensation codes are found in Labor Code Division 4 of California. The insurance premiums, paid by the employers are based on these codes. Some of the factors that the premiums are based on have been discussed below:

  • Employees’ classification codes: About 700+ codes are found and each these accounts for a specific injury depending on the profession. These determine the rate of your base premium.
  • Experience modifier: This code depends on the tenure of your company. Based on the history of your company, the experience modifier can increase or decrease your base rate.
  • Payroll: Company payroll is multiplied by your experience modifier and base rat, in order to determine the Workers Compensation premium for you.

Let us explore these Worker Compensation codes in detail and unearth how suitable classification can assist you in saving money.

Workers Compensation Codes In California - Their Importance and Usage

What Are Worker Compensation Codes?

These are 3 or 4 digits codes made by NCCI. There are over 700 codes that not only distinguish different job roles of the staff members, but also indicate the associated risks related to job and work environment.

Most of the employers have more than at least two class codes on their insurance policy. For instance, a construction company may have may have ground workers and roofers categorized under different class.

Are NCCI Codes Applicable in All the States?

Some of the states that follow NCCI codes are as follows:

  • California
  • New York
  • New Jersey
  • Delaware
  • Texas
  • Pennsylvania

Most Useful Workers Compensation Codes

Section 4600 : This section covers medical treatments like surgical, acupuncture, chiropractic, and hospital treatment, in order to recover from any work related injury.

Section 4060 : This code covers situations wherein employers deny that the employee injured himself or herself at work, and there is a need to have a medical legal evaluation to be carried.

Section 4061 : This code is applied when the insurer accepts your claim, but disputes your permanent impairment.

Section 4062 : This covers how any disputes other than permanent disability and injury can be settled for both the parties.

There are many more, and you can always search the net using search terms such as workers compensation class codes in California.

Why Reclassify Your Employees?

When your employees are promoted or their roles have been changed within the company, then their reclassification is required. Even if a temporary employee is moved to a different role, employer must reclassify him or her.

The Cost You Pay for Misclassifying Your Employees

Although it is tempting to misclassify your employees, in order to reduce your workers compensation premiums, it is indeed a dirty deed. If you ever wrongfully classify your employees, there is a big penalty and punishment you’ll need to face.

Mistakes can happen, and thus there is a need for you to hire a workers compensation attorney. They will help you classify each and every employee under appropriate class and save you from any kind of legal trouble. So, if you are new to business and workers compensation laws, we suggest you take professional help.