8871 Standard Exception Classification Code Question

January 28, 2021 By JL Risk Management Consultants

Reader Question on 8871 Standard Exception Classification Code Article

Last week, I wrote an article on the 2021 USRP Manual Update by the California Rating Bureau (WCIRB). The webinar was great. One area that was covered well was the 8871 Standard Exception Code.

A devour reader reminded me that 8871 is a Standard Exception Code and I did not address. I changed the old saying from the “customer is always right” to the “reader is always right.”

Screenshot of 8871 Standard Exception Code

You are correct. I did not cover the 8871 Standard Exception part well enough. I took a great screenshot of Brian Gray presenting (nice job) that part of the discussion.

I planned to include it this week. The screenshot should have been included last week. I apologize for that miscalculation – no pun intended.

Yes, this is a CA webinar. A majority of the states use the same code. 8871 covers the complete US except for 11 states.

Why do I address this code multiple times? A large number of employees had and still now have to work out of their homes.

The webinar screenshot contains a great summary definition: (please click to see larger picture (thanks)

screenshot 8817 Standard Exception WCIRB Webinar

If you cannot see the screenshot when you click on it, this is what the slide covers:

Standard Exception Restrictions

02 2021 USRP Classification Changes32Classification 8871 will be a Standard Exception classification, subject to USRP Section III, Rule 4, Standard Exceptions.

If a classification specifically includes Clerical Office Employees or Clerical Telecommuter Employees, such employees shall be assigned to the standard classification, regardless of whether the work is conducted at the same or at a separate location.- 41 classifications that specifically include Clerical Office Employees will be amended to also include Clerical Telecommuter Employees.

Not permissible to divide a single employee’s payroll between a Standard Exception classification and any other classification, including another Standard Exception classification, with the exception of a single permanent job reassignment.- Clerical Office Employees will not separately classify their work-at-home days; 8871 applies only to Clerical Office Employees who work more than 50% of their time at their home or other office space away from any location of their employer.

The slides for the webinar can be found here – including the 8871 Standard Exception slides.

Classification Code 8810 – Final Answer?

April 14, 2015 By JL Risk Management Consultants

Classification Code 8810

Classification Code 8810 may not be the final determination for many clerical office employees at the time of the workers comp premium audit. Classification Code 8810 NOC (Not Otherwise Classified) is a Standard Exception Code.

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We receive a large number of inquiries from employers when, during a premium audit, employees are moved from the 8810 code. The following examples do not mean the premium auditor may have not made a mistake.

Any time payroll is moved from Classification Code 8810, an employer should question this heavily. The auditor should have to and usually will justify the reassignment of payroll.

The phrase Not Otherwise Classified means that the class code should only be used if there is not a code with a better description of the employer’s operations.

Standard Exception codes refer to classifications that are common to many businesses and that are generally not allowed to be designated as the governing classification.

The governing classification is the class code that produces the most payroll in a business.

Below is a list of codes that are similar to 8810. However, these codes better describe an employer’s operations in certain cases.

Man Doing Classification Code 8810 At Computer

Wikimedia Commons – Matthew

8803—Auditors, Accountant or Factory Cost or Office Systematizer—Traveling

8820—Attorney

8855—Banks and Trust Companies—All Employees, Salespersons, Drivers & Clerical

8861—Charitable or Welfare Organization—Professional Employees and Clerical

8856—Check Cashing Establishments—All Employees, Salespersons, Drivers & Clerical

8871—Clerical Telecommuter Employees

8814—Federal Employer’s Liability Act—Clerical Office Employees

8723—Insurance Companies—Including Clerical & Salespersons

8799—Mailing or Addressing Company or Letter Service Shop—Clerical Staff

8800—Mailing or Addressing Co.

8901—Telecommunications Co.—Office or Exchange Employees & Clerical

Classification Code 8810 and the list of alternative codes do have state exceptions. Eight states do list exceptions to 8810 of varying degrees. Massachusetts seemed to have the most state exceptions.

As one might expect, the classification codes tend to be more expensive than 8810.

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Premium Audits And Lesser Known Standard Exception Codes

May 25, 2011 By JL Risk Management Consultants

The Lesser Known Standard Exception Codes

Last week, I posted on the Standard Exception classification codes namely 8742 and 8810. The concern of a few of the blog readers and our clients is there were new classification codes on their premium audits such as Telecommuters.

Picture Of Employees Standard Exception Telecommuter

Wikimediafoundation.org

There are some very specialized rules for Clerical Staff to be considered Telecommuters. The same rules that apply to most employees being reclassified will not fly in this case. I will not go into the rules now. If you see this classification appearing on your audits, this could be a red flag situation.

The reason for my concern is in certain states, the difference between a classification of a clerical employee and a telecommuter can cause up to a 76% increase in your Workers Compensation for those employees. There are reasons that Telecommuters are more expensive classification such as not being supervised in person and the home workspace may not be as safe as in the office.

Man On His Room Standard Exception On Computer

Wikipedia

I do realize that each state has their own rules on Standard Exception Codes and Telecommuters. I did not write this post to discourage having employees that are Telecommuters. I often, as in this case, like to comment to the blog readers what I am hearing from our clients.

There is nothing wrong with questioning your yearly premium audits or your Workers Comp policies. I would not recommend disputing the Telecommuter classification code for the only reason being that it appeared on your Workers Comp audit. If you feel that you need any help, please do consult a non-agent expert to assist your company. An audit dispute can sometimes end up costing more than the original audit or policy.

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Workers Comp Class Codes 8810 and 8742 – Standard Exception Codes

November 9, 2009 By JL Risk Management Consultants

Workers Comp Class Codes 8810 and 8742 Revisited

The Workers Comp Class Codes 8810 and 8742 always generate a large amount of attention. I receive a large number of comments and questions every time that I post on the NCCI and State Rating Bureau Workers Compensation Codes 8810 and 8742. As we all know, the two codes usually represent the lowest rates for Workers Comp Class Codes 8810 and 8742 are also known as Standard Exception codes. The definition of Standard Exceptions can be found by clicking the Definitions Tab on the right side of the screen.

Graphic Of Comments Workers Comp Class Codes 8810 and 8742 Icon

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There are a number of rules on Standard Exception codes – especially 8810 Clerical. One of the most common mistakes by employers is the employee or group of employees perform the duties allowed under the code – but not 100% of the time. As I have posted very often, if an employee spends one minute performing a higher risk task, then the employee will not be rated under the Classification Code 8810.

The insurance carriers at premium audit are very picky about this Class Code. There are some exceptions to the 100% requirement, but not many. It is very rare that the NCCI or State Rating Bureau will allow the premium to be allocated on a pro-rata basis on how many hours the employee or employees worked in each job.

Next up – Class Code 8742 – the most misunderstood classification code.

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Standard Exception Codes 8810 and 8742 – Important Classification Codes

August 31, 2009 By JL Risk Management Consultants

Standard Exception Codes Revisited

The main Standard Exception codes denote 8810 and 8742. We have received so many questions on these two class codes that I thought that I would post about them again. These NCCI (R) Class Codes are also used by the various state rating bureaus in the US. Why are they so popular?

Computerize of Matrices Standard Exception Codes graphic

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These two Class Codes are called Standard Exceptions. What does that mean? In almost all cases a business is given a governing class code. Let’s say that we have a trucking company that does only long haul trucking. Their class code is 7229 (different in certain states). Should the office workers and salespeople be classified as long haul truckers? They should not.

Quite some time ago, the rating bureaus all figured out that if an employer is paying the same Workers’ Comp insurance premiums for a truck driver as a salesperson or office worker, they were being overcharged for employees that were smaller risks. The Standard Exception Codes can apply to almost any company. As they are much smaller risk categories, the rates are much lower than most other positions.

Graphic Free Binary Standard Exception Codes Revisited

StockUnlimited

Their is a caveat to Standard Exceptions. If an office worker (Class Code 8810) works for one hour a week as a mechanic or working around the trucks, this employee will be classified as a long haul trucker in this example. Their complete pay (remuneration) will be classified as a long haul trucker.Workers Comp premium auditors have become very adept at separating out the Standard Exception workers from the rest of the company.

There are pages and pages of Class Code information for 8810 and 8742. Office workers and salespeople are not the only workers that can be classified under these two codes. If you use the search box on the right side of the page and search for Class Code 8810 or 8742, you will find some of the other types of workers that can fall under these codes.

What are Workers Comp Standard Exception Codes?

May 22, 2009 By JL Risk Management Consultants

Standard Exception Codes 8810

I posted on the most used Standard Exception Codes (8810) earlier this week, I thought it would be good to cover the subject again. I had posted on this subject back on October 16, 2008. That post is listed in the archived posts further down on the right side of this blog.

vector of Standard Exception Codes graphic

Wikipedia – David Vignoni

We will use NCCI Standard Exception Codes – classifications that are common to many businesses and that are generally not allowed to be designated as the governing classification. The governing classification is the class code that produces the most payroll in a business. The Standard Exception Codes are:

8810 – Clerical
8742 – Salespersons or Collectors – Outside
8871 – Clerical Telecommuter Employees
7380 – Drivers, Chauffeurs, Messengers, and Their Helpers NOC—Commercial
8748 – Automobile Salespersons

Please note that each of these codes has many subheadings. The Classification Code 8810 has pages and pages of explanation on the code. Is there an overall guide to what jobs fit all of these codes? The NCCI has the Scopes Manual which is supposed to be used by all insurance personnel that rate or audit companies’ Workers Comp payrolls and premiums.

One caveat to the Standard Exception Codes is that premium auditors are trained in and are very adept at analyzing the above Class Codes. We often see in our audits for employers where the auditor has moved the payroll amounts from the Standard Exception Codes to other codes.

If you feel that one of your workers that was moved to a Class Code that does not match their job, you should question the premium auditor at the time of audit and raise a dispute if you have received your premium audit bill. Always request the audit workpapers. These documents show the auditor’s thinking when auditing your records to determine your final policy premium for that year.

Standard Exceptions – Which Classification Codes?

October 16, 2008 By JL Risk Management Consultants

NCCI Standard Exceptions Have Certain Class Codes

You mentioned the Standard Exceptions question in your last post. What are they and why are they important? A blog reader emailed this question overnight.

Picture of woman hand with magnifying glass and codes Standard Exceptions Codes

StockUnlimited

We will use NCCI Standard Exception Codes – classifications that are common to many businesses and that are generally not allowed to be designated as the governing classification.

The governing classification is the class code that produces the most payroll in a business. The Standard Exception Codes are:

8810 – Clerical
8742 – Salespersons or Collectors – Outside
8871 – Clerical Telecommuter Employees
7380 – Drivers, Chauffeurs, Messengers, and Their Helpers NOC—Commercial
8748 – Automobile Salespersons

These do not cover all states, but most of the non-NCCI states have almost the same codes. The key is the codes cover much more than just the above exact code descriptions. Most of the time, the Standard Exception Class Codes are much less expensive than the other class codes.

These codes are the ones that are most often disallowed by workers comp premium auditors. We see Code 8810 (or its equivalent) being changed the most during audits. Documenting the job duties of any employees with the above codes is very important.

You may always dispute the premium audit results if the employee was a clerical worker but was moved into another classification.

2020 Update – With the Coronavirus pandemic, the Class Code 8871 – Telecommuters has quickly rushed to the forefront when analyzing the classification codes for workers that are now working out of their homes which being on lockdown. Class Code 8871 may soon become one of the more popular standard exception codes for the new few months or years.