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Understanding Construction Dual Wage Thresholds

February 20, 2019

In California, a number of construction and erection operations are divided into two separate classifications based on the hourly wage of the employees and each of these classifications has a different advisory pure premium rate. For each of these classification pairs, a specific hourly wage threshold is used to determine whether the payroll and claims for an employee are assigned to the "high wage" or "low wage" classification. There are currently 16 pairs of "dual wage" classifications.

Example – Classification 5185/5186, Automatic Sprinkler Installation

For workers engaged in the installation of an automatic sprinkler system whose hourly wage rate is less than $27.00 per hour, the appropriate classification is 5185, Automatic Sprinkler Installation – within buildings – including storage and yard employees – employees whose regular hourly wage does not equal or exceed $27.00 per hour.

Workers whose hourly wage rate equals or exceeds $27.00 per hour are classified as 5186, Automatic Sprinkler Installation – within buildings – including storage and yard employees – employees whose regular hourly wage equals or exceeds $27.00 per hour.

Assignment of each high wage classification is subject to verification at the time of final audit that the employee’s regular hourly wage equals or exceeds the specified wage threshold. Payroll recordkeeping requirements for dual wage classifications are listed in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 at Part 3, Standard Classification System, Section IV, Special Industry Classification Procedures, Rule 2a.

You can learn more about dual wage classifications through these free resources available on wcirb.com:

  • Dual Wage Classification Thresholds by Year Table
    This downloadable and printable table, located on the Classification page in the Learning Center section of wcirb.com, lists the approved wage threshold changes for the past 20 years and is updated annually.
     
  • Classification Search
    The Classification Search helps you locate classifications based on keywords that are part of, or commonly associated with, classification phraseologies, but did you know that you can set the Classification Search to only display dual wage classifications? Do this by going to the “Filter By” drop-down menu in the search feature and choosing “Dual Wage Classifications” from the list.
     
  • Classification Research Reports
    As part of its administration of the Standard Classification System in California, the WCIRB studies dual wage classifications periodically and recommends changes in the wage thresholds when appropriate. These proposed changes may be included in a WCIRB Regulatory Filing that is then presented to the California Insurance Commissioner for approval. You can view our dual wage studies on the Classification Research Reports page, found by clicking on the Research tab on wcirb.com and choosing Classification Studies.

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