Last updated: October 2026

Workers Comp Class Codes: How Your Rate Is Set and How to Check It

In Texas, your insurance carrier picks your class codes and can change them later.

How Your Insurer Assigns Your Rate Before You Open a Policy

Texas classifies the business as a whole, not each employee’s separate duties, subject to exceptions such as the standard exceptions below. The National Council on Compensation Insurance (NCCI) maintains classifications, rules, plans and forms, and recommends loss costs that are filed for approval in NCCI states. In Texas, the rate is the amount of premium for each $100 of payroll.

The Texas manual states the goal: group employers so that each classification reflects the exposure common to those employers.

Governing Classification and the Owners on Your Policy

In Texas, the governing classification at a job or location is the code, other than a standard exception, that produces the most payroll. Miscellaneous employees who serve more than one operation, such as shipping clerks, maintenance staff and yard workers, have their payroll assigned to it.

In Texas, partners and sole proprietors are covered automatically unless an endorsement names them as excluded. Corporate executive officers are covered too, unless an endorsement excludes them. An officer doing only clerical or outside sales work goes to code 8809, and one doing other work is classified like any other employee. California covers corporate officers working for pay, and an officer may elect to be excluded.

Standard Exceptions: Clerical, Drivers and Outside Sales

Texas sets up standard exception classifications for occupations common to so many businesses that they get their own codes. Clerical office employees use code 8810, drivers and their helpers use code 7380, and outside salespeople use code 8742. An employee who fits one stays out of the business’s basic classification unless that classification specifically includes them.

Code 8742 covers outside salespeople working away from the employer’s premises, but not employees who deliver merchandise.

In Texas, code 8810 applies only to employees doing office work exclusively, in areas separated from other operations by structural partitions. A receptionist who sometimes helps in the warehouse loses code 8810, and that employee’s total payroll goes to the highest rated classification they are exposed to. Code 8810 is not eligible for division of payroll.

NCCI vs. State Rating Bureaus: Which System Controls Your Codes

NCCI’s own state map marks Texas as an NCCI state and California, New York and Pennsylvania as independent bureau states. California’s bureau is the Workers’ Compensation Insurance Rating Bureau (WCIRB). In Texas, private employers can choose whether to carry workers’ compensation, and coverage is not required in most cases.

Four states run their own workers’ comp funds: North Dakota, Ohio, Washington and Wyoming. Who must buy from each fund differs by state, and the workers comp guide explains the rules for each. Wyoming bases its premium rates on the business’s classification under the North American Industry Classification System. Washington builds each rate from the business’s risk classifications and its experience factor.

When Auditors Reclassify You to a Higher-Rated Code

Your workers comp premium starts as an estimate. In Texas, the carrier audits payroll after the policy term ends to set the final premium. As a result of the audit, the premium for the audited period could increase or decrease.

Records decide which code the payroll lands in. In Texas, an employee who interchanges between operations has their entire payroll assigned to the highest rated classification for any part of their work. New York’s State Insurance Fund (NYSIF) says that without a payroll separation, all your payrolls may be assigned to the highest rated classification.

Construction gets an exception, with a condition. In Texas, one employee’s payroll may be divided between codes for construction work, but only with accurate payroll records of the work each employee did. An estimated or percentage split is not permitted, and construction work without separate payroll records goes to the highest rated classification at that job. In New York, NYSIF bases construction payroll separation on actual time worked in each code, not on percentages.

Red Flags That Your Workers Comp Class Codes Are Wrong

Check three things on your policy’s information page. First, compare every classification code against the work your business and employees actually do. A code that matched when the policy was first written may no longer reflect how roles have evolved.

Second, look for office payroll lumped under the field code. In Texas, standard exception payroll is classified separately unless the business’s classification specifically includes it. Clerical payroll left in the field code is charged the field code’s rate.

Third, compare your codes against their published descriptions. NCCI’s free Class Look-Up tool shows class codes with their Scopes descriptions. In Texas, the notes under a classification are part of its wording and control its use.

How to Audit Your Own Classifications Before Your Insurer Does

List every classification code on the policy, the payroll assigned to it, and the rate. Then write a one-paragraph job description of what each group of employees actually does, including any secondary duties. Do this every year.

In Oregon, the first step in a dispute is to contact your insurance company or agent. Explain exactly what you disagree with, such as work assigned to a higher classification code than you expected. California’s WCIRB has a policyholder ombudsman for classification questions, and state regulations set out how to dispute a classification, including appeals to the Department of Insurance.

Oregon’s small business ombudsman for workers’ comp advises keeping copies of payroll records, contracts and audit documents, which are often needed to resolve disputes. In New York, missed appointments or insufficient records can lead NYSIF to estimate your payroll, and premiums can come out higher than a proper audit would produce.

Self-auditing does not guarantee the insurer accepts your preferred classification.

Fix Your Classifications This Quarter

Pull your information page this week. If you cannot find it, call your broker and request a copy of your current policy with all assigned codes and payroll allocations.

Schedule a classification review meeting with your broker before your next renewal. Bring your payroll breakdown by department, your job descriptions, and any time-tracking records that show how employees split hours across tasks. A broker who will not do this meeting is a broker worth replacing.

In Texas, your experience modification rate multiplies the premium your codes produce.

Review your other workers compensation costs too, and read how to prepare for a workers comp audit before the next one.

This is not legal or financial advice. Consult a qualified professional for your specific situation.