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Special Industry Procedures for Miscellaneous Employees

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Special Industry Procedures for Miscellaneous Employees

September 2, 2015

In a previous Classification and Test Audit Insight e-newsletter, we reviewed the general definition and procedures for miscellaneous employees that are provided in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP) at Part 3, Standard Classification System, Section III, General Classification Procedures, Rule 3, Multiple Enterprises. In this e-newsletter, we will review Special Industry Classification Procedures that apply to miscellaneous employees in two industries, Construction or Erection Work and Farms.

The USRP at Part 3, Section IV, Special Industry Classification Procedures, Rule 2, Construction and Erection Work, Subrules b and c provide as follows:

  1. Governing Classification (Construction or Erection)

    The governing classification shall be determined on the basis of the job within the policy period if payrolls are kept separately by job within the policy period; otherwise, on the basis of the entire policy period. Two classifications distinguishable only by the regular hourly wage of employees shall be combined to determine the governing classification.
     

  2. Miscellaneous Employees (Construction or Erection)

    If the construction or erection operations at any location are assigned to two or more classifications, the payroll of all miscellaneous employees who cannot properly be assigned to specific classifications shall be assigned to the governing classification, except that when the governing classification is determined to be the combination of two classifications distinguishable only by the regular hourly wage of employees, the payroll of a miscellaneous employee shall be assigned based on the regular hourly wage of such employee. Miscellaneous employees include, but are not limited to, supervisors, watchpersons, traffic control flagpersons, drivers, construction or safety engineers, construction debris cleanup employees and job-site equipment maintenance and repair employees.

It is significant to note that the payroll for two classifications distinguishable only by the regular hourly wage of employees, i.e., dual wage classifications, is added together to determine the governing classification. For example, an employer may have payroll by classification as follows:

5213 Concrete Construction  $85,000 
5225  Reinforcing Steel Installation  $20,000 
5183(1) Plumbing – low wage  $60,000
5187(2)  Plumbing – high wage $30,000 
5403  Carpentry – low wage  $70,000 
5432  Carpentry – high wage $10,000

Although Classification 5213 individually develops the greatest amount of payroll, it is not the governing classification. When the payroll for corresponding high wage and low wage classifications are added together, the combined plumbing payroll, at $90,000, exceeds the combined carpentry payroll at $80,000, as well as the payroll for Classifications 5213 and 5225 individually. As such plumbing  is the governing classification and miscellaneous employees are assignable to the applicable plumbing classification based on their hourly wage.

The Special Industry Classification Procedures at Rule 2b shown above provide that the governing classification shall be determined for each job if payrolls are kept separately by job within the policy period; otherwise, the governing classification is determined based on the payroll developed during the entire policy period.

The USRP at Part 3, Section IV, Special Industry Classification Procedures, Rule 4, Farms, Subrule c, paragraph 5, provides as follows:

(5) Miscellaneous Employees (Farms)

The payroll for fence repair, road building, general supervision, chore workers or drivers not connected with any particular crops is incidental to any type of farm. Where adequate records showing labor cost distributed by crops are maintained, the payroll of such miscellaneous employees shall be assigned to the various crop classifications in the same proportion as the allocated crop payroll bears to the total allocated payroll.

The procedure for assigning miscellaneous payroll for farms differs from non-farm situations in that the payroll may be proportionately allocated to multiple classifications rather than assigned to a single governing classification but only when “adequate records showing labor cost distributed by crops are maintained.”

The recordkeeping requirements to divide farm payroll (i.e., to establish labor cost distributed by crops) are listed at Rule 4, Subrule b:

  1. Payroll Division

    Division of payroll shall be made for each separate and distinct type of commercial farm operation, provided separate records of payroll are maintained, notwithstanding any other provision contained herein.

    Payroll may be divided based upon acreage, an employee’s time, or other reasonable methods.

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