Workers’ Comp Class Codes for Manufacturing Employees

Manufacturing businesses rely on skilled workers to produce goods efficiently, but ensuring these employees are properly classified for workers’ compensation insurance is just as important as their day-to-day operations. Workers’ comp class codes for manufacturing determine insurance rates and coverage, impacting business costs and compliance. Misclassifying employees can lead to penalties, unexpected premium increases, and potential legal issues.

If you’re a manufacturing business owner, ensuring accurate classification is key to avoiding unnecessary expenses and securing the right workers’ comp for manufacturing businesses. Proper classification not only helps with compliance but also ensures that employees receive the appropriate coverage in case of workplace injuries. Understanding the nuances of these classifications can help businesses avoid costly errors and maintain smooth operations.

To get a fast and accurate quote for workers’ compensation insurance, call NPN Brokers at (561) 990-3022 or fill out our online quote request form.

Understanding Workers’ Comp Class Codes for Manufacturing

Workers’ compensation class codes are numerical identifiers assigned by the National Council on Compensation Insurance (NCCI) or state rating bureaus to classify different job roles. These codes help insurers assess risk levels and calculate appropriate premiums. Since manufacturing involves a wide range of activities—from assembling electronic components to operating heavy machinery—using the right class codes ensures businesses are charged fair and accurate premiums.

Beyond determining premiums, class codes also impact claim handling. If an employee is classified incorrectly, it could lead to complications when processing claims, potentially delaying benefits and increasing liability for the employer. Additionally, insurance audits often reveal misclassifications, which can result in retroactive premium increases or penalties. Ensuring that employees are classified correctly from the start is one of the most effective ways to avoid these costly setbacks.

A critical factor in determining what class codes to use for manufacturing is the type of work being performed. Below, we break down the common class codes for different manufacturing sectors.

General Manufacturing Class Codes

General manufacturing covers a broad range of industries, including metal fabrication, plastic goods, and furniture manufacturing. These businesses often involve a mix of machinery operation and manual labor, with varying levels of risk.

• NCCI Code 3632 – Machine Shop Operations: Applies to machine shops that manufacture parts or products using lathes, milling machines, and other precision equipment. Machine shop environments can be hazardous due to the presence of cutting tools, sharp edges, and rotating machinery, making accurate classification crucial for proper coverage.
• NCCI Code 2501 – Clothing or Apparel Manufacturing: Covers businesses involved in cutting, sewing, and assembling garments. While apparel manufacturing may seem lower-risk compared to other sectors, hazards such as repetitive strain injuries and exposure to fabric dust still warrant careful classification.
• NCCI Code 3066 – Sheet Metal Products Manufacturing: Used for manufacturers producing items such as ducts, roofing panels, and metal containers. Working with sheet metal often involves cutting, welding, and shaping, which can expose employees to burns, lacerations, and other injuries.
• NCCI Code 2883 – Furniture Manufacturing: Applies to woodworking and furniture assembly, including chairs, cabinets, and tables. Wood dust exposure and machine operation hazards make proper classification necessary to ensure adequate insurance coverage.

Properly identifying workers’ comp class codes for manufacturing employees in these industries helps avoid misclassification issues that could lead to higher premiums or policy audits. Ensuring accuracy in classification protects both employees and employers from unforeseen financial liabilities.

Automotive Manufacturing Class Codes

Automotive manufacturing involves the production of vehicles, parts, and accessories. This sector requires precise class codes to differentiate between assembly line work, metal fabrication, and component production.

• NCCI Code 3821 – Auto Parts Manufacturing (Metal): Covers businesses producing metal components such as axles, engine blocks, and transmissions. Metalworking poses risks related to welding fumes, metal shavings, and heavy lifting, making proper classification essential.
• NCCI Code 3822 – Auto Parts Manufacturing (Plastic): Applies to manufacturers making plastic components for vehicles, including dashboards and bumpers. Exposure to chemical fumes and working with molds create distinct risks that require appropriate classification.
• NCCI Code 3507 – Automobile Assembly: Used for businesses assembling vehicles, whether it be traditional cars, electric vehicles, or trucks. Assembly line environments can lead to ergonomic injuries, repetitive motion disorders, and machinery-related accidents.
• NCCI Code 1924 – Tire Manufacturing: Covers companies producing vehicle tires using rubber and synthetic materials. The tire manufacturing process involves heat, chemicals, and heavy machinery, all of which must be factored into risk assessment.

Classifying workers correctly in automotive manufacturing ensures businesses maintain proper coverage while keeping premiums in check. Failure to use the right codes can result in inaccurate premiums and potential liability issues in the event of workplace injuries.

Food Processing and Beverage Manufacturing Class Codes

Food processing and beverage manufacturing involve handling raw ingredients, packaging goods, and maintaining quality control. These environments present unique risks related to sanitation, machinery, and food handling.

• NCCI Code 6504 – Food Processing Plants: Covers businesses that process raw food products into finished goods, such as frozen meals, canned foods, and dairy products. The risks associated with food processing include exposure to extreme temperatures, sharp cutting tools, and contamination hazards.
• NCCI Code 2003 – Bakeries and Dough Production: Used for bakeries and facilities making bread, pastries, and dough-based products. Hot ovens, slippery surfaces, and repetitive tasks create various risks that require accurate classification.
• NCCI Code 2111 – Brewery and Beverage Manufacturing: Applies to breweries, wineries, and soft drink production facilities. These environments involve working with pressurized systems, fermentation tanks, and potentially hazardous chemicals.
• NCCI Code 2081 – Butchering and Meat Processing: Covers businesses involved in meat cutting, processing, and packing. Employees in this field face sharp tools, heavy lifting, and the risk of repetitive motion injuries.

Using the right class codes ensures food and beverage manufacturers comply with workers’ compensation regulations while securing appropriate coverage. Misclassification in this sector can result in major financial losses and compliance violations.

The Risks of Misclassifying Employees

Incorrectly classifying employees can have significant financial and legal consequences for businesses. If a manufacturing company mistakenly classifies high-risk employees under a lower-risk category, insurance carriers may conduct audits and retroactively increase premiums. This can lead to unexpected costs and, in some cases, policy cancellations.

Beyond financial penalties, misclassification can also create issues when filing workers’ compensation claims. If an injured employee is found to have been under the wrong class code, insurers may dispute or deny claims, leading to legal complications and potential liability for the employer. Ensuring accurate classification from the beginning prevents these issues and keeps businesses in compliance with insurance requirements.

Get the Right Workers’ Comp for Your Manufacturing Business

Navigating workers’ comp class codes for manufacturing can be complex, but ensuring your employees are properly classified is essential to controlling costs and staying compliant. Whether you’re in general manufacturing, automotive, food processing, or another sector, using the right class codes will help protect your business from unnecessary expenses and legal risks.

If you need workers’ comp for manufacturing businesses, NPN Brokers can help you find coverage quickly and efficiently. Call us at (561) 990-3022 or fill out our online quote request form to get a quote in minutes and secure coverage in as little as 24 hours.