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EXCERPT

California Workers’ Compensation Uniform Statistical Reporting Plan—1995
Effective September 1, 2021

Part 3, Standard Classification System, Section III, General Classification Procedures, Rule 3, Multiple Enterprises


3. Multiple Enterprises

If the employer’s business, conducted at one or more locations, consists of two or more distinct operations that do not normally prevail in the business described by a single classification, then the distinct operations shall be separately classified in accordance with the following rules:

a. If the distinct operations are Physically Separated in accordance with Section II, Rule 21, Physical Separation or Physically Separated, each distinct operation shall be separately classified.

(1) The payroll for employees (exclusive of Miscellaneous Employees) who perform activities integral to separately classified operations shall be divided between or among the applicable classifications, provided complete and accurate payroll records are maintained pursuant to Section V, Rule 3, Division of Single Employee’s Payroll.
(2) The payroll of Miscellaneous Employees shall be classified pursuant to 3d below.

b. If two or more of the distinct operations are not Physically Separated, such operations shall be assigned to the highest-rated classification applicable to the distinct operations conducted in the common workspace.

c. The above paragraphs notwithstanding, division of payroll is permitted only if:

(1) The operation is not described by any of the General Inclusions;
(2) The division is not contrary to classification phraseology; and
(3) The division is not contrary to any other provisions contained in this Plan.

d. Miscellaneous Employees do not engage in operations that are integral to each classifiable operation, but perform operations in general support of more than one classifiable operation and cannot properly be classified in accordance with a single classification. Examples of Miscellaneous Employees include but are not limited to supervisors, maintenance employees, power plant employees, laboratory researchers, security guards, shipping and receiving clerks, and yard employees.

Unless otherwise directed in this Plan, Miscellaneous Employees shall be assigned to the Governing Classification of the group of classifications to which their work pertains.

Example 1

The employer operates a factory that manufactures uniforms, described by Classification 2501(1), Clothing Mfg., with a hypothetical pure premium rate of $5.00. The employer adds a distinct operation to manufacture pillows, described by Classification 2571, Pillow, Quilt, Comforter or Cushion Mfg., with a hypothetical pure premium rate of $7.00. Both operations are conducted on the same floor of a building with no permanent walls separating the workspaces. Because the operations are not physically separated, the operations shall be assigned to the highest-rated classification. This example is illustrated in the table below.

Operation Physical Separation Potential Classification Hypothetical Pure Premium Rate Assigned Classification USRP Rule
Uniform Manufacturing No 2501(1), Clothing Mfg. $5.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3b
Pillow Manufacturing No 2571, Pillow, Quilt, Comforter or Cushion Mfg. $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3b

Example 2

The employer from Example 1 reorganizes its business so that the uniform manufacturing and pillow manufacturing operations are now in different buildings. Because the operations are physically separated, both classifications are assignable. This example is illustrated in the table below.

Operation Physical Separation Potential Classification Hypothetical Pure Premium Rate Assigned Classification USRP Rule
Uniform Manufacturing Yes 2501(1), Clothing Mfg. $5.00 2501(1), Clothing Mfg. Section III, Rule 3a
Pillow Manufacturing Yes 2571, Pillow, Quilt, Comforter or Cushion Mfg. $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a

Example 3

The employer from Example 1, which maintains its uniform and pillow manufacturing operations in different buildings, establishes a separate department to cut fabric in support of both the uniform and pillow manufacturing operations. The fabric cutting department is physically separated from the uniform and pillow manufacturing operations but is integral to both of these separately classifiable operations. Assuming it is not feasible to accurately segregate the fabric cutting payroll between that developed in support of uniform manufacturing and that developed in support of pillow manufacturing, the fabric cutting department is assigned to the highest rated applicable classification. The uniform manufacturing, however, remains assignable to Classification 2501(1). This example is illustrated in the table below:

Operation Physical Separation Potential Classification Hypothetical Pure Premium Rate Assigned Classification USRP Rule
Uniform Manufacturing Yes 2501(1), Clothing Mfg. $5.00 2501(1), Clothing Mfg. Section III, Rule 3a
Pillow Manufacturing Yes 2571, Pillow, Quilt, Comforter or Cushion Mfg. $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a
Fabric Cutting Yes 2501(1), Clothing Mfg., or 2571, Pillow, Quilt, Comforter or Cushion Mfg. $5.00 or $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a(1)

Example 3a

Conversely, if the employer is able to accurately segregate the fabric cutting payroll developed in support of each operation, the fabric cutting payroll can be divided between Classifications 2501(1) and 2571. For example, the department may have specific days or shifts devoted to fabric cutting in support of uniform manufacturing which are separate from those in support of fabric cutting for pillow manufacturing. This example is illustrated in the table below:

Operation Physical Separation Potential Classification Hypothetical Pure Premium Rate Assigned Classification USRP Rule
Uniform Manufacturing Yes 2501(1), Clothing Mfg. $5.00 2501(1), Clothing Mfg. Section III, Rule 3a
Pillow Manufacturing Yes 2571, Pillow, Quilt, Comforter or Cushion Mfg. $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a
Fabric Cutting Yes 2501(1), Clothing Mfg., or 2571, Pillow, Quilt, Comforter or Cushion Mfg. $5.00 or $7.00 2501(1), Clothing Mfg., and 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a(1)

Example 4

The employer from Example 1 moves to a new facility and adds a new operation, sewing canvas boat covers, described by Classification 2576, Awning, Tarp or Canvas Goods Mfg., with a hypothetical pure premium rate of $4.00. At the new facility, the pillow manufacturing operations will be physically separated from all other operations, and the uniform manufacturing and boat cover manufacturing operations will be performed in the same workspace with no physical separation. In this case, the physically separated pillow manufacturing is separately classified as 2571. Because (1) the boat cover and uniform manufacturing operations are not physically separated from one another and (2) Classification 2501(1) is the higher-rated classification, these operations are both assigned to Classification 2501(1). This example is illustrated in the table below:

Operation Physical Separation Potential Classification Hypothetical Pure Premium Rate Assigned Classification USRP Rule
Pillow Manufacturing Yes (separate from all other operations.) 2571, Pillow, Quilt, Comforter or Cushion Mfg. $7.00 2571, Pillow, Quilt, Comforter or Cushion Mfg. Section III, Rule 3a
Uniform Manufacturing

Yes (separate from Pillow Mfg.)

No (not separated from Canvas Boat Cover Mfg.)

2501(1), Clothing Mfg. $5.00 2501(1), Clothing Mfg.  Section III, Rule 3a
Canvas Boat Cover Mfg.

Yes (separate from Pillow Mfg.)

No (not separated from Uniform Mfg.)

2576, Awning, Tarp or Canvas Goods Mfg. or 2501(1), Clothing Mfg. $4.00 or $5.00 2501(1), Clothing Mfg.  Section III, Rule 3b