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General Exclusions

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General Exclusions

August 27, 2014

In this edition: General Exclusions are operations that must be separately classified.

A previous Classification and Test Audit Insight e-newsletter discussed the Single Enterprise  Rule, found in the California Workers' Compensation Uniform Statistical Reporting Plan1995 (USRP) at Part 3, Standard Classification System, Section III, General Classification Procedures, Rule 2. This rule directs that if an employer's business, conducted at one or more locations, consists of a single operation or a number of separate operations that normally prevail in the business described by a single classification, the entire exposure of the business shall be assigned to that single classification. However, the rule also provides an exception for General Exclusions.

The rule regarding General Exclusions is found in the USRP at Section III, Rule 6:

  1. General Exclusions

    Subject to division of payroll rules, the following operations are excluded from all classifications, including Standard Exceptions, unless specifically included in the language of the classification. Operations described by general exclusions shall require division of payroll, notwithstanding that the classification wording may include the term all as in such phrases as all employees, all operations, etc.

    1. Aircraft operation - all members of the flying crew.
    2. Maintenance or repair work if performed by contractors, and all new construction or alteration work whether done by the employer's employees or by contractors.
    3. Foundry operations.
    4. Asbestos abatement. 
    5. Day care services if provided by the employer primarily for the use of its employees' dependents.

The operations listed as General Exclusions are operations that do not generally prevail in the primary business operations of most employers. Accordingly, when General Exclusions operations are conducted, they shall be separately classified pursuant to the division of payroll rules of the USRP.

Aircraft Operation
Some employers that do not otherwise engage in aircraft operations retain employees to operate aircraft for purposes of transporting personnel in the conduct of their business. Such employees are classified as 7421, Aircraft Operation - transportation of personnel in the business of an employer not otherwise engaged in aircraft operation. Example: A clothing retailer with many store locations that has a company plane and pilot to transport executives.

Maintenance or Repair Work by Contractor; New Construction or Alteration
If an employer uses an uninsured contractor to perform maintenance or repair work and the employer's insurer determines such exposure must be included for coverage on the employer's workers' compensation policy, the appropriate construction classifications shall be assigned. If an employer engages its own employees to conduct new construction or alteration work, the appropriate construction classifications shall be assigned. Example: A self-storage facility operator retains employees to construct new storage units, or uses an uninsured contractor to repaint storage units.

Foundry Operations
If a manufacturer operates a foundry to produce metal castings, the foundry operations shall be assigned to the appropriate foundry classification unless such operations are specifically included in the language of the classification. Example: A water pump manufacturer that has a foundry department to cast parts such as pump impellers and housings.

Asbestos Abatement
If an employer engages its own employees to conduct asbestos abatement operations, the asbestos abatement operations shall be classified as 5473, Asbestos Abatement. Example: A petroleum refinery retains employees to engage in asbestos removal within the refinery.

Day Care Services
If an employer provides day care services for their employees' children, the day care operations are separately classified as 9059, Day Care Centers. Example: A website application developer provides on-site day care as a convenience for employees with children.

Related Information

Single Enterprise: A Fundamental Concept of the Standard Classification System

Online Guide to Workers' Compensation: Standard Classification System

WCIRB Education on Demand