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Workers Comp Premium Audit Question

I received a question this week from one of our blog readers that had this WC Premium Audit question. “I have an employee that walks across a corner of our manufacturing plant to go to the bathroom. On our recent premium audit, the auditor changed the Classification Code from 8810 Clerical to 1438 Smelt Manufacturing. Is this correct?”

kids Premium Audit asking a question
Wikimedia commons – Jim Larrison

I will usually answer the question posed directly. However, in this case, I wanted to actually give more examples that came from our readers and clients. Are these judgment calls by the Workers Comp premium auditor or are there actually rules in place? This is a very hotly debated topic in the premium audit world of Workers Compensation.

An owner of a tow truck company does not ever drive the tow trucks to pick up autos. He is never in the maintenance area for the tow trucks. He does walk across the parking lot where the tow trucks are parked to go to his car twice daily. The premium auditor changed the Class Codes to a higher code. Is it correct to have the tow truck owner classification code moved from 8810 Clerical to 8002 Truck Rental and Drivers?

Two computer programmers walk into the manufacturing area to pick up his/her printouts multiple times each day. The premium auditor moved the Class Code from 8810 to 3004 Iron/Steel Manufacturing. Was this a proper procedure?

People Question Raising Hands Premium Audit I Conference Room
Wikimedia commons – Glenn Fawcett

I know that each state has its own peculiarities and specific class codes – especially California. I am more referring to how the workers are performing their jobs and looking at it on a national basis. If anyone would like to comment or send me an email at [email protected], that would be great.

I will answer these questions in the next few posts. Classification Codes were provided by NCRB and the WCIRB.

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One Response

  1. In NCCI States Rule 1B2a3 (other Requirements) states

    “Employees who otherwise meet the requirements for Code 8810 or Code 8871 will not be disqualified from assignment to this classification if they perform certain incidental nonclerical duties directly related to that employee’s duties in the office”

    this rule also states: “Entering an area exposed to the operative hazards of the business for clerical purposes, such as delivering paychecks” is not a disqualifier.

    In your examples as described, going to the bathroom (OK), walking from the parking lot to start work or leave work (OK), going through the shop to pickup printouts (OK). All of these would not disqualify an employee from clerical duties assigned to code 8810.

    Any auditor that doesn’t understand this needs additional education about the Basic manual rules.

    Thank You, Carlos Garcia


James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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