Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Supreme Court Classification Code Decision Goes Against BWC


Ohio State Supreme Court Classification Code Dispute Decided Against BWC

When a State Supreme Court Classification Code decision hits the blogosphere, the readers of J&L Risk Management’s articles and free newsletter should hear about the news.

A tremendous thanks to WorkCompCentral for writing the article and providing a link to the decision.  Some Workers’ Comp publications do not provide links to the decisions.  WorkCompCentral always does which lets Workers Comp Class Code geeks like me read the whole decision.   You can find a copy of the decision at this link (PDF file download).

Ohio is a monopolistic state meaning that the Buckeye State’s employers can only purchase workers comp insurance from the Bureau of Workers Compensation (BWC).   A few states have converted from a monopolistic Workers Comp system to an open market system since 2000.  Nevada and West Virginia converted completely to an NCCI-based system.

pic buckeye Ohio State Supreme Court Classification Code decision
Wikimedia Commons – PixOnTrax

The one word that stuck out in the Supreme Court classification code decision was “shoehorn.”  – see the below section.  Another significant note to the Supreme Court Classification Code ruling was the decision to use NCCI classification codes starting in 1997.

Monopolistic North Dakota and Washington state still use their own class codes.

Ohio Supreme Court Classification Code Decision Excerpts

{¶ 13} In 1997, the bureau notified OKI that it was in the process of converting its manual classifications to those established by the National Council of Compensation Insurance (“NCCI”). (The Ohio General Assembly mandated this
change in 1993. Am.Sub. H.B. No. 107, 145 Ohio Laws, Part II, 2990, 3113.) The classifications the bureau assigned to OKI under the NCCI manual were 8742, “salespersons or collectors—outside,” and 8810, “clerical office employees.”

{¶ 39} In this case, we conclude that it is not enough for the bureau to simply consider OKI—a private employer that cannot levy taxes—to be a public employer and a taxing district without first explaining whether an increase in hazard
over OKI’s former manual classifications makes 9443 the manual classification that best describes OKI’s business. As this court has observed, “[t]he bureau should not be permitted under the guise of administrative convenience to shoehorn an employer into a classification which does not remotely reflect the actual risk encountered.” Progressive Sweeping Contrs., Inc., 68 Ohio St.3d at 396, 627 N.E.2d 550.


{¶ 40} In light of the foregoing, we reverse the Tenth District’s judgment and issue a limited writ of mandamus ordering the bureau to evaluate the degree of hazard in OKI’s business and to explain—if the bureau so concludes after
conducting that analysis—why manual classification 9443 best describes OKI’s business, with respect to the degree of hazard.

Bottom Line – A State Supreme Court Classification Code decision shows that a company should always check its classifications to make sure you are paying the correct Workers Comp premium.



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


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.