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Classification Research Projects

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Classification Research Projects

July 6, 2016

As part of administering the Standard Classification System, the WCIRB routinely reviews the classification phraseologies contained in the California Workers' Compensation Uniform Statistical Reporting Plan—1995 (USRP) to reflect changes in the California economy and changes to various industries. In this edition, we provide a summary of the Classification Research projects that have been prioritized for completion based on direction from the Classification and Rating Committee at the June 15, 2016 meeting.

USRP Enhancements

In 2013, the WCIRB began a multi-year, comprehensive review of the over 700 classifications contained in the USRP to ensure that the scope of each classification is clearly defined and includes information as needed pertaining to related classifications. We have entered the final phase of this project, preparing amendments to approximately 135 remaining classifications. These amendments will be included in the regulatory filing that proposes changes to be effective January 1, 2018. The amendments are not intended to change the way classifications are currently administered, but instead clarify and update the classification information. These changes will also make it easier to search for classifications using the Classification Search tool on WCIRB.com as each classification will include a more robust description.

Dual Wage Construction Classifications

The WCIRB studies dual wage construction classifications periodically and recommends changes to the wage thresholds when appropriate. Proposed wage threshold changes are submitted to the Insurance Commissioner as part of a WCIRB filing and, after providing an opportunity for public comment, the Insurance Commissioner will approve, reject or modify the WCIRB's proposal. The WCIRB's actuaries will conduct an analytic review of all dual wage classifications within the next year and, in addition, select five dual wage classification pairs to study through a premium auditor survey process. The WCIRB will select expiring policies for employers that have developed payroll in these five classifications and request that the insurer obtain basic information regarding the number of employees earning various hourly wage rates for these classifications when the audit is conducted and submit the information to the WCIRB for this study. The WCIRB will provide additional information regarding this process to insurers with selected policies in the weeks ahead.

Review of Security Systems/Building Automation Systems

The WCIRB will review the classifications currently applicable to the installation of security systems, access control systems, audio/video equipment, internet connectivity equipment, and building automation or “smart home” systems to determine whether these operations constitute a homogenous industry that should be described by a single classification, or whether multiple classifications apply.

USRP Rules on Payroll/Remuneration

The WCIRB is engaged in a comprehensive review of the rules pertaining to payroll amounts that must be reported for statistical purposes. The study seeks to simplify rules and align them with those applicable in other jurisdictions where it is practical and advantageous to do so. The study will also examine whether some forms of compensation do not represent a good proxy for exposure and, if so, whether it is practical or advisable to exclude them from the reported payroll.

Classifications 8868/9101, Colleges or Schools – private

Due to the very wide diversity of employers in Classifications 8868/9101, Colleges or Schools – private, the WCIRB will perform a comprehensive review of Classifications 8868/9101 and related classifications to assess whether they can be better defined into more homogeneous subgroups. Given the scope of this project, the study of Classification 8868/9101 will be a two-year effort beginning in 2016 with any proposed changes included in the January 1, 2019 Regulatory Filing.

Additional information about the current Classification Research studies is available in the agenda and minutes of the June 15, 2016 Classification and Rating Committee meeting which are accessible in the Publications and Filings section of WCIRB.com.

Related Information

Classification and Rating Committee Meeting Documents
Classification Information
Online Guide to Workers’ Compensation: Standard Classification System
Online Guide to Workers’ Compensation: Payroll or Remuneration
WCIRB Classification Search