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Published on Nov 20
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The Ohio BWC uses workers’ compensation classification codes to define the business of the employer. The object of the classification system is to assign the one basic manual classification that best describes the business. It is the business of the employer that is classified, not the separate employments, occupations or operations within the business. The BWC assigns a unique rate to each classification and adjusts the rates every year. Read on to learn more about classification codes and how these codes effect your premium rates.
Manual classifications
The BWC assigns manual classification codes established by the National Council on Compensation Insurance (NCCI) based on the description of operations provided on an employer’s initial coverage application.
Manual classifications codes are divided into two types — basic and standard exception. Basic classifications describe a company’s general business operations. With over 500 basic classification codes, many companies may find that they are so specialized in their operations that there is not a specific code for them. In these cases, BWC will assign the basic classification code that most closely matches their operations.
There are five standard exceptions that apply to employees common to many businesses whose job duties are not described by a basic classification, such as clerical office employees. To qualify, employees generally cannot have any other duties within the company outside the scope of the standard exception.
Correct classification is important
Workers’ compensation premiums are based on these workers’ compensation classification codes. Every year, each classification is assigned a base, or starting premium rate that BWC calculates based on statewide claims costs and payroll for employers reporting under that code. If you are not reporting payroll and claims correctly, not only are you paying incorrect premiums, but you are also potentially causing other employers statewide to pay incorrectly. This can also result in an inaccurate calculation of your experience modification rate (EMR). Your EMR is the percentage above or below the base rate at which an employer will pay premium. Reporting payroll using the wrong classification can, in some cases, result in over-inflated workers’ compensation premium.
Workers’ Compensation Classification Codes and Sheakley
Sheakley’s Workers’ Compensation experts are on your side – constantly searching for ways to keep your BWC premium costs under control. We work with you and the BWC to make sure that your business has the most appropriate classification code for your business, ensuring that you get the best possible premium rate. With more than 50 years of experience, our professionals are here to help you manage your costs, while ensuring worker safety.
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