Classification Procedures for Combination Store/Gasoline Station Operations

9/20/2017

The WCIRB frequently receives questions regarding the classification of stores that sell gasoline or gasoline stations that include store operations. The classification procedures for this combination of operations are provided in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP) at Part 3, Section IV, Special Industry Classification Procedures, Rule 5h. This rule states:

If a store engages in the sale of gasoline or automobile services, the appropriate store classification shall apply at each location wherein the sale of merchandise in the store, other than gasoline or automobile services, exceeds twenty-five percent (25%) of the total annual receipts for the location. Employees engaged in the fueling, service or repair of automobiles or trucks shall be assigned to the applicable gasoline station classification. Cashiers who work within the store and accept payments for store merchandise and automobile services shall be assigned to the applicable store classification.

Examples

An employer operates a combination convenience store and retail gasoline station with 30% of gross receipts developed in the sale of store merchandise. The store occupies 3,000 square feet and is open 24 hours per day. All gasoline sales are controlled from inside the store. The operations of this employer are assignable to Classification 8061, Stores – convenience – retail.

At a second location, the employer operates a similar store; however, only 20% of the gross receipts are developed in the sale of store merchandise. The operations of this employer are assignable to Classification 8324, Gasoline Stations – retail.

Also at this second location, the employer opens a service bay to perform automobile oil changes and smog checks in addition to gasoline and store sales. The operations at this location are now assignable to Classification 8387(1), Automobile or Truck Gasoline Service Stations, due to the automobile service operations provided.

The classification determination requires a comparison of the percentage of store sales relative to fuel sales for each separate location. Unless the store sales exceed 25% of the annual receipts for the location, no store classification applies to the location. Gasoline station locations that sell a small amount of store merchandise (not exceeding 25% of gross receipts) are classified as 8324, Automobile Gasoline Stations – retail, if no automobile services are performed, or 8387(1), Automobile or Truck Gasoline Service Stations, if service or repair operations are performed.

If the store sales exceed 25% of the annual receipts for the location, the applicable store classification is determined based on Rule 5b in the USRP at Part 3, Section IV. This rule states, in part:
 

The applicable store classification is determined based upon the type of merchandise sold, leased, consigned or auctioned and whether the operations are wholesale or retail. In the absence of specific instructions found in the classification phraseology or footnote, the following definitions apply when determining the applicable store classification.

(1)  Type of Merchandise Sold
 
If a store sells more than one type of merchandise, each of which may be subject to a different classification, the store classification shall be determined based on the highest rated category of merchandise sold, provided that category exceeds twenty-five percent (25%) of gross receipts. If a store sells lottery tickets authorized by the California State Lottery, only that portion of the sales proceeds identified by the California State Lottery as commission shall be included in determining gross receipts.

Determining the applicable store classification requires an analysis of the type of merchandise sold within the store. Note that fuel sales are not included when performing this analysis. In the absence of specific instructions in a particular store classification, the appropriate store classification is assigned based on the highest rated category of merchandise sold, provided that category exceeds twenty-five percent (25%) of gross receipts.

Some store classifications provide specific instructions. A common example of a classification with specific instructions is Classification 8061, Stores – groceries or provisions –  convenience – retail. This classification frequently applies to gasoline stations where store sales exceed 25% of gross receipts because many stores that are operated at gasoline station locations are open past 11:00 PM, have less than 5,000 square feet devoted to the display and sale of merchandise and sell the items listed in the specific instruction for Classification 8061. Each store classification must be reviewed for specific instructions to ensure that it applies to an employer’s store operations.

If a store classification applies at a gasoline service station location, employees engaged in auto service or repair are separately classified as 8387(1), Automobile or Truck Gasoline Service Stations, as directed by Rule 5g in the USRP at Part 3, Section IV:

If a store maintains a department for the service or repair of automobiles or trucks on a fee basis, the payroll of employees engaged in such service and repair operations shall be assigned to the applicable automobile or truck service or repair classification.

Related Resources

WATCH: Fuel Up on Gas Station Classifications
Classification Search
The Standard Classification System