Roofing Workers Comp Class Code Guide for Employers

Understanding the right workers’ compensation class code for roofing operations is essential for accurate premium calculation, compliance, and risk management. This article explains common roofing class codes, how insurers assign codes, the impact on premiums, payroll reporting, auditing, and steps to correct misclassification.

Class Code	Typical Description	Common Jobs Included
5474	Roofing, NOC (Not Otherwise Classified)	Roofers, shinglers, roof tear-off, installation
5551	Clerical Office Employees	Office staff, schedulers, billing
5403	Carpentry—Framing Or Structural	Framing carpenters working on roofs
5645	Roofing—Maintenance/Repair Only	Minor roof repairs, patching, small crews
8017	Landscaping/Exterior Work	Gutter cleaners, exterior painters (non-roof)

What Are Workers’ Compensation Class Codes

Workers’ compensation class codes are numerical identifiers used by insurers and rating bureaus to categorize businesses by the type of work performed. These codes group occupations with similar exposure and historical loss data to determine base premium rates. States use advisory organizations like NCCI (National Council on Compensation Insurance) or state-specific bureaus to manage codes and loss costs.

Common Roofing Class Codes And When They Apply

Roofing operations can fall under several class codes depending on the scope of work, methods, and jobsite conditions. Choosing the correct class code requires analyzing duties—installation, tear-off, repair, or mixed work—and whether employees perform non-roofing tasks.

Class Code	When It Applies	Notes
5474	General roofing contractors performing installation and tear-off	Most common for roofers handling shingles, tiles, built-up roofs
5645	Roofing maintenance and small repair crews	Lower exposure than full replacement; limited tear-offs
5403	Carpenters doing structural framing and roof deck installation	Use when primary payroll is structural carpentry
5551	Clerical staff employed by roofing companies	Clerical payroll should be recorded separately
8017	Exterior maintenance unrelated to roof work	Gutter and landscaping tasks not directly roofing-related

How Class Codes Affect Premiums

Each class code has a rate per $100 of payroll based on historical claims for that type of work. Higher-risk codes like roof installation typically carry significantly higher rates due to fall hazards, heat exposure, and heavy materials. Insurers multiply the payroll subject to that code by the rate, then apply experience modification and state adjustments to determine the premium.

Experience Modification And Its Role

The experience modification factor (mod) adjusts premiums based on a company’s past loss history compared to peers. A roofing contractor with a mod above 1.00 pays more, while one below 1.00 enjoys discounts. Proper class coding and strong safety programs directly influence mods by reducing claim frequency and severity.

How Insurers Determine Class Codes

Underwriters and auditors review job descriptions, contracts, payroll records, and ENTRIES ON OSHA logs to assign codes. Insurance companies examine the actual work performed, not just the company name, to ensure classification matches exposure. Contractors should provide detailed task lists and jobsite photos when applying for coverage.

Onsite Audits And Documentation

During audits, carriers verify payroll and classification by inspecting payroll reports, job logs, contracts, and subcontractor agreements. Keeping precise timesheets and allocating payroll by task reduces misclassification risk and audit adjustments.

Payroll Reporting And Auditing Best Practices

Accurate payroll reporting by class code is essential for avoiding premium surprises. Employers should maintain separate payroll accounts for roofers, carpenters, laborers, drivers, and clerical staff to support classification during audits. Use payroll software that supports multiple cost centers and provides exportable reports for auditors.

• Allocate payroll by task: Record hours spent on roofing vs. non-roofing tasks.
• Track subcontractors: Confirm whether subcontractors carry their own workers’ comp and collect certificates of insurance.
• Keep detailed job logs: Include dates, tasks, crew members, and equipment used.

Risk Control Strategies To Lower Workers’ Comp Costs

Reducing workplace injuries lowers both claims and experience mods. Roofing contractors can implement fall protection, heat illness prevention, safe material handling, and regular safety training to reduce risk. Claims management and return-to-work programs further limit indemnity costs.

1. Fall Protection: Use guardrails, harness systems, and designated anchor points.
2. Training Programs: Regular toolbox talks on ladder safety, PPE, and jobsite hazards.
3. Heat Stress Protocols: Hydration plans, shaded breaks, and modified schedules in hot weather.
4. Equipment Maintenance: Inspect scaffolding, ladders, and lifts routinely.

Common Misclassifications And How To Correct Them

Misclassification often occurs when mixed duties exist, such as roofers performing carpentry or vice versa. Incorrect codes can lead to overcharged premiums or significant audit adjustments; timely correction requires documentation and insurer communication.

To correct misclassification, compile job descriptions, payroll allocations, and subcontractor agreements, then submit a written request to the insurer or rating bureau. If disputes arise, employers may file appeals with state insurance departments or utilize a professional auditor.

Subcontractors And Independent Contractors

Many roofing firms rely on subcontractors; counting subcontractor payroll incorrectly can distort premium calculations. Verify certificates of insurance and clearly document the scope of subcontracted work to determine whether payroll should be excluded. Require signed indemnity or hold-harmless clauses when appropriate and permissible by law.

State Variations And Regulatory Considerations

Workers’ compensation class code systems and rates vary by state. Some states use NCCI codes while others maintain independent bureaus with different class numbers or descriptions. Employers must review state-specific guidelines and ensure compliance with local reporting requirements.

Tools And Resources For Employers

Several tools help employers identify correct class codes and estimate premiums. Useful resources include NCCI manuals, state rating bureau websites, insurance brokers specializing in construction, and payroll platforms with classification features.

• NCCI—Advisory organization with classification manuals and rate filings.
• OSHA—Workplace safety standards and recordkeeping guidance.
• U.S. Department of Labor—Information relevant to federal labor standards impacting payroll practices.

Steps To Ensure Correct Classification And Lower Costs

Employers should perform an internal classification audit annually, separate payroll by task, require COIs from subcontractors, and invest in strong safety and return-to-work programs. Proactive documentation and communication with the insurer prevent costly audit adjustments and can improve experience mods over time.

Action	Benefit
Separate Payroll By Task	Supports accurate classification during audits
Collect COIs From Subs	Prevents payroll from being counted twice
Implement Safety Programs	Reduces claims and lowers experience mod
Document Job Duties	Provides evidence if classification disputes occur

When To Consult A Professional

If classification questions, audit disputes, or large premium discrepancies arise, consulting an experienced insurance broker, workers’ compensation attorney, or third-party auditor is advisable. Professionals can review job duties, advocate with carriers, and assist with appeals to state bureaus.This can save money and reduce administrative burdens for the employer.

Frequently Asked Questions About Roofing Class Codes

How Often Do Class Codes Change?

Codes and class descriptions are updated periodically by rating bureaus. Employers should review annual manual changes and state filings to ensure ongoing compliance.

Can Clerical Payroll Be Segregated?

Yes. Clerical employees should be recorded under office codes and not combined with roofing payroll to avoid inflated roofing exposure. Separate payroll entries during reporting and audits protect against higher rates.

What If A Roofer Does Multiple Tasks?

When employees perform mixed tasks, allocate hours and payroll to the code that best reflects time spent. Documenting task percentages reduces the likelihood of misclassification.

Final Notes And Action Checklist

Accurate workers’ compensation classification is a mix of precise documentation, proactive safety management, and clear communication with insurers. Employers should maintain detailed payroll segregation, secure subcontractor COIs, implement robust risk-control programs, and consult professionals when classification disputes arise.

• Review current class codes and payroll allocations today.
• Schedule an annual internal audit ahead of insurer audits.
• Invest in safety and return-to-work programs to lower long-term costs.