Workers’ compensation class codes (NCCI codes)

Workers’ compensation class codes are numerical codes used by insurance carriers to group employees based on the type of work they perform and the level of risk associated with that work.

Each class code corresponds to a specific job function—not a job title. For example, an “office manager” who works at a desk will usually have a very different class code than an “office manager” who regularly performs fieldwork or supervises jobsites.

Workers’ compensation insurance companies use these codes to:

• Estimate the likelihood of workplace injuries
• Calculate workers’ comp premiums
• Apply consistent pricing across similar businesses

Your class codes directly impact how much you pay for workers’ compensation insurance. Some types of work are statistically riskier than others, which means higher premiums.

If employees are assigned to the wrong class code, you could:

• Pay more than necessary
• Face unexpected charges after a workers’ comp audit
• Experience delays or disputes when filing a claim

Accurate National Council on Compensation Insurance (NCCI) classification helps ensure you’re paying a fair rate based on the work your employees actually do.

Thirty-five states use the standard NCCI system, and 10 states have modified NCCI’s class codes.

Five have opted out entirely, creating their own homegrown systems for evaluating workers’ compensation risks (California, New Jersey, New York, Delaware, and Pennsylvania).

Workers’ comp premiums are generally calculated using three main factors:

• Employee class codes
• Total payroll for each class code
• Your state’s workers’ comp rates

Each class code has a rate assigned to it. Higher‑risk work (like construction or landscaping) typically has higher rates, while lower‑risk work (like a marketing agency) usually costs less to insure.

That’s why proper classification—and payroll allocation—matters.

Many businesses have several workers’ compensation class codes. For example, a home building and renovation company would submit roofers under class code 5551 and clerical staff under code 8810.

Because roofers face greater risks of injury than clerical staff, the different class codes will give the insurer an accurate view of how risky your company will be to insure.

You want your codes to be accurate so you don’t overpay for your workers’ compensation insurance or get penalized for underreporting your risk.

If the insurer audits your account and discovers you used “safer” codes than you should have, it might retroactively bill you for up to three years of additional premiums. And if you made several class code mistakes, the insurer might cancel your policy.

When you shop for another policy, your new insurer will ask whether you recently were dropped or denied workers’ compensation insurance. A “yes” answer may lead the insurer to either deny your application or charge you more.

Your workers’ compensation class codes aren’t “set it and forget it.” They should be reviewed whenever your business changes.

You may need to update your codes if you:

• Add new services or expand into new types of work
• Change how employees spend their time
• Hire your first employee or add new roles
• Transition office staff into field work (or vice versa)

Reviewing your class codes at renewal, or anytime your operations change, can help prevent misclassification and billing surprises later.

If you already have workers’ comp insurance, your class codes are typically listed on:

• Your workers’ comp policy declarations page
• Your certificate of insurance
• Renewal or audit documents

If you’re buying coverage for the first time, class codes are determined based on a description of your business operations and employee duties.

NCCI provides a free resource for businesses to look up class codes. To get a closer look at the NCCI risk-classification system, check out this online resource for workers’ compensation insurers, agents, and brokers.

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