Workers Comp Code 8810 aka Class Code 8810
Class Code 8810 also known as workers comp code 8810 is one of the most misunderstood classification codes in Workers Comp. We receive a very large number of emails and phone calls on this subject usually just after an employer’s yearly premium/payroll audit.
The premium auditor has switched some of the employees to include more expensive classification codes. This has resulted in a much higher than anticipated final premium bill. We will usually hear that the switched employees had been classified as 8810 employees for many years. Why did the insurance auditor switch them from 8810 clerical?
I have posted on this business subject often. You may want to perform a search on the blog and input 8810. The search box is down the screen on the right side. I will link to some of the posts in this article.
Class Code 8810 is a standard exception code along with class code 8742 in most states. The quick definition of the code is a clerical office employee. These employees are considered to be in the safest work environment in most companies. The risk is very low for injury. The result is a very low rate for these employees.
If your company is in a risk pool or assigned risk, the difference can be astounding between 8810 and other classification codes as assigned risk rates are usually very high.
If you receive a premium audit report where any or a large number of employees have been switched to other codes, the premium auditor must explain in full detail why the class codes were changed during their audit.
You can sometimes find them in the audit workpapers that the auditor produces during the audit. If you did not receive a copy of those papers or electronic file (often a spreadsheet), you may want to request a review copy.
Even if the audit was completely performed using software, the auditor will input explanations. You may find those in the miscellaneous notes section. If you find that the employees should have been classified as 8810, you may want to initiate an audit dispute.
If you feel like you may need advice on whether the move from 8810 was correct or mistaken, call in a premium expert to help your company. You only have one shot to make the correct dispute with your carrier.
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Perhaps this is a subject better understood from the auditors perspective. In order to reassign a clerical employee to any other class code, it must be proven that the clerical employee is doing something other than clerical work that was viewed in person, in the records, or told to the auditor by the audit contact.
Clerical duties is usually an all or nothing code for the year. If you interact with customers in person such as a cashier, will call desk, pulling stock, shipping & receiving, directly supervising others in a shop, or construction site, then you are no longer a clerical employee even if you did it once during the policy year. The employee would be reassigned to the highest rated code applicable based on the duties performed.
For example, I arrived early to an audit appt. and was sitting in the parking lot reviewing the policy when I noticed a forklift driver quickly moving crates & pallets of goods around the warehouse. About 5 minutes before the appt. he stopped, went in the office and removed his coveralls and had a suit underneath (all within plain view from the parking lot). Guess who was the officer/audit contact who when asked what his duties were in the company swore that he worked exclusively in the office only. I told him of my observations and that his coveralls were hanging on the coat rack less than 10 feet away. He was reassigned from clerical.
Sometimes the payroll records show an employee in a clerical code and also another code during the same year (i.e. shop, deliver, construction, shipping & receiving, etc). I will ask more questions about this employees duties to determine if he did both (which requires that they be reassigned from clerical) or if it was an error in the records (which would reassign the payroll from those other duties back to clerical).
One large employer stated that they had 50 clerical employees working full time in the office throughout the entire year with little turnover. Their entire office space for these 50 clerical employees consisted of only 5 desks. The majority of these employees were reassigned because they were doing outside sales, supervising construction operations, etc away from the office.
The interview where the clerical employees duties are discussed in detail is where some of the reassignment problems occur. The audit contact is not familiar with all of the employees that have come and gone during the year. It is OK to check into it further and get back to the auditor ivy telephone or by email when you are certain of the employees exact duties (don’t guess). This is also a good time to ask for the audit worksheet so that you can review the work papers for any issues sooner rather than later.
For one audit, there were 6 bookkeepers during the year, but the payroll records showed that they came and went right after each other so there was no problems assigning them to the clerical code. If you have a clerical employee that on occasion goes out to the shop or construction site to troubleshoot or to do quality control work (even in his office), then that employee will be reassigned. Thank You, CG
I find a lot of confusion comes from the somewhat ambiguous term “Clerical”. There are all sorts of clerical jobs that do not fit the WC definition of Clerical such as parts clerks, inventory clerks, store clerks, none of whom can be assigned to Code 8810. To really understand the intended use of this classification one must examine all three terms of the classification wording which are Clerical Office Employees Not Otherwise Classified (NOC).
Clerical means doing paperwork, computer work, working on books and records. This might be called the status of the work to borrow a term from USL jurisdiction determinatiion. Keeping with this theme is the situs test or where the paperwork is being performed. The insured must remain in a separate office area for the performance of their paperwork duties. This is why auto dealer service writers do not qualify for assignment to code 8810, for example. Yes they do paperwork in a separate office area but then regularly enter the service area for a variety of reasons.
Lastly code 8810 is a classification of last resort, a NOC classification. It cannot be assigned unless no other classification better describes the work of the employee. So if the basic classification of the insured includes Clerical OFfice Employees, then the worker’s pay is assigned to that code, not to code 8810.
The questions the auditor will ask are what does the employee do, where does the employee do this work, and is there a more appropriate classification. Only when all three conditions are met will an employee’s pay be assigned to Code 8810.
Carlos, thanks for posting your great insights into the blog on 8810.
Scott, thanks for posting your 8810 analysis into the blog.
Nice post which The interview where the clerical employees duties are discussed in detail is where some of the reassignment problems occur. The audit contact is not familiar with all of the employees that have come and gone during the year. It is OK to check into it further and get back to the auditor ivy telephone or by email when you are certain of the employees exact duties.Thanks a lot for posting.