Workers’ Comp Class Codes for Oil and Gas Industry

Understanding workers’ comp class codes for the oil and gas industry is crucial for ensuring proper insurance coverage and avoiding costly penalties. The oil and gas industry presents unique risks, and each type of job within the sector falls under specific classification codes set by the National Council on Compensation Insurance (NCCI). These codes help insurance carriers determine premium rates based on the level of risk associated with each type of work.

If you’re in the oil and gas industry and need help finding the right workers’ compensation insurance, give NPN Brokers a call at (561) 990-3022 or fill out our online quote request form. We can provide a quote in minutes and coverage in as little as 24 hours.

Why Proper Classification Matters

Accurately classifying employees is more than just an administrative task—it directly impacts your workers’ compensation premiums and overall compliance. Insurance companies calculate premiums based on the type of work an employee performs. Higher-risk tasks lead to higher premiums, while lower-risk tasks are assigned lower rates.

Misclassifying employees can result in significant problems, including underpayment or overpayment, penalties and fines, and claim denials. Incorrect classification may lead to higher premiums or insufficient coverage. Regulatory bodies can impose fines if an audit reveals misclassification, and if an injured employee was misclassified, the claim might be denied, leaving your business responsible for medical costs and lost wages.

Understanding the most commonly used oil and gas workers’ comp class codes ensures that you remain compliant, avoid unnecessary expenses, and protect your employees properly.

Common Workers’ Comp Class Codes for the Oil and Gas Industry

Here’s a closer look at the most commonly used workers’ comp class codes for the oil and gas industry, along with what each code covers.

• 1320 – Oil or Gas Lease Operator – All Operations & Drivers – Class code 1320 applies to oil and gas lease operators responsible for managing lease sites. These operators oversee all aspects of production, maintenance, and transportation. This includes maintaining lease equipment, monitoring well performance, and ensuring that site operations run smoothly. Drivers transporting equipment and materials to and from lease sites also fall under this classification.
• 6216: Oil or Gas – Lease Work NOC – By Specialist Contractor – Class code 6216 covers specialized contractors performing work on oil and gas leases not classified elsewhere (NOC). These contractors are typically hired for specific projects, such as equipment maintenance, inspection, or repair. Tasks can include cleaning storage tanks, performing non-routine maintenance, and specialized welding or fabrication.
• 6233: Oil or Gas Pipeline Construction – Class code 6233 applies to companies involved in oil and gas pipeline construction, including both new pipeline installations and repairs to existing lines. Workers classified under this code typically perform trenching, welding, pipeline assembly, and pressure testing.
• 6235: Oil or Gas Well – Drilling or Redrilling – Class code 6235 covers drilling and redrilling operations for oil and gas wells. This includes both initial drilling projects and efforts to enhance production from existing wells. Workers under this classification typically operate drilling rigs, run casing and tubing, and conduct pressure tests to evaluate well performance.
• 6236: Oil or Gas Well – Installation or Recovery of Casing – Class code 6236 applies to companies specializing in the installation or recovery of casing for oil and gas wells. This work involves running and cementing casing, removing old or damaged casing, and inspecting casing for structural integrity.
• 6237: Oil or Gas Well – Instrument Logging or Survey Work – Class code 6237 covers companies providing instrument logging and survey services for oil and gas wells. This includes both surface and downhole surveys used to assess well conditions and productivity. Tasks under this classification include running wireline logs, conducting pressure and temperature surveys, and analyzing well performance data.

The Risks of Misclassifying Oil and Gas Workers

Misclassifying employees can result in more than just higher premiums—it can expose your business to significant financial and legal risks. One of the most common issues is increased audit liability. During a workers’ comp audit, insurers review payroll records to verify classifications. Misclassifications can result in retroactive premium adjustments and penalties, which can significantly impact your bottom line.

Claim denials are another major risk. If an injured employee is misclassified, the insurer may deny the claim, leaving your business responsible for medical expenses and lost wages. This not only increases your financial burden but can also lead to disputes with employees and potential legal action.

Regulatory fines are also a concern. State workers’ compensation boards can impose fines for misclassification, further increasing the financial strain on your business. These fines can accumulate quickly, especially if multiple employees are misclassified over an extended period.

How to Ensure Proper Classification

Ensuring accurate classification requires attention to detail and a clear understanding of job roles within your company. One of the most effective ways to achieve proper classification is by conducting regular job duty reviews. This involves examining each employee’s responsibilities and matching them to the appropriate class codes. Job roles can change over time, so it’s important to update classifications accordingly.

Working with an experienced insurance broker can also make a significant difference. A knowledgeable broker can guide you through the classification process, helping you avoid common pitfalls and ensuring that your employees are properly covered. Brokers understand the nuances of workers’ comp class codes for the oil and gas industry and can provide valuable insights into correct classification.

Accurate payroll records are another key factor in proper classification. Detailed payroll documentation allows insurers to verify classifications during audits, reducing the risk of premium adjustments and penalties. Keeping thorough records not only ensures compliance but also helps you manage costs more effectively.

Get Help with Workers’ Comp for Your Oil and Gas Business

Navigating the complexities of workers’ comp class codes for the oil and gas industry can be challenging, but you don’t have to do it alone. At NPN Brokers, we specialize in helping businesses find affordable workers’ compensation coverage, even in high-risk industries like oil and gas. Our team understands the specific classification codes used in the oil and gas sector and can help ensure that your employees are classified correctly.

We provide flexible coverage options, including pay-as-you-go plans with no contracts, no deposits, and no audits. This approach allows you to manage costs effectively while maintaining compliance with workers’ compensation requirements. Our streamlined process means you can get a quote in minutes and coverage in as little as 24 hours.

If you need help finding the right workers’ comp coverage for your business, call us today at (561) 990-3022 or fill out our online quote request form. We’ll provide a customized quote tailored to your business needs and ensure that your employees are properly classified, giving you peace of mind and protecting your bottom line.