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Workers Comp Class Code 5606 – Who’s The Boss?

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 Workers Comp Class Code 5606 – Hotly Debated Topic

Over the last decade, Workers Comp Class Code 5606 has generated so many questions from insureds.

Most of the question arrive after an employer has received their premium audit statement or final premium bill for a certain policy year.  The premium auditor had moved some of the workers comp class code 5606 to a class code with a much higher rate.

When a subject appears on the Workers Comp radar so many times, one has to cover it in an article.  Let us look at this controversial Classification Code by looking at how the two largest Rating Bureaus (NCCI and WCIRB) define this Construction Industry code. The most important part of the descriptions is included in each section. Please use the links to see the full descriptions.  Both descriptions contained copyrighted information.

pic subway with workers comp class code 5606
Creative Commons License – T.shima

WCIRB Version of Class Code 5606

(Changed 11/2000) – See Full Description Here 

This classification applies to executive level supervisors of construction operations wherein the employer develops payroll in one or more construction or erection classification(s) provided not less than two levels of supervision, as defined in Section IV, Rule 2d, Executive Level Supervisors, are retained between the executive level supervisor and the workers performing actual construction operations.

NCCI Version

Please remember that the NCCI Workers Comp class code 5606 can be altered by each state.   Below is the generic description.

Code 5606 is intended to cover the project manager, construction executive, construction manager, or construction superintendent of both specialty and general contracting risks. The project manager, etc., will spend some time in the office and the remainder of time visiting various job sites conferring with the job superintendent or foreperson to keep track of the progress of the work being conducted at each job or project. The qualifications established for the use of Code 5606 are that the project manager, etc., of a construction or erection concern must be exercising supervision through superintendents or forepeople of the employer and cannot have direct charge over the workers at the construction or erection site. The project manager may also exercise supervision through subcontractors, superintendents, or forepeople, but each subcontractor must have an on-site superintendent or foreperson at each and every job site. The important element is determining their job duties and not their title as well as that the supervision must be indirect rather than direct.

Bottom Line

The two main Rating Bureaus’ descriptions seems similar even though the two descriptions read somewhat differently.  The best advice that I can give starts with reviewing your policy’s Declarations Page to see if the Workers Comp Class Code 5606 covers any part of your policy’s estimated payroll.  If so, keep the two above descriptions in mind.   Deciding to do something after your premium audit bill arrives – other than disputing it – may not be the business strategy for your company.

 

 

 

 

 

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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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