In California, a number of construction and erection operations are divided into two separate classifications based on the hourly wage of the employees and each of these classifications has a different advisory pure premium rate. For each of these classification pairs, a specific hourly wage threshold is used to determine whether the payroll and claims for an employee are assigned to the "high wage" or "low wage" classification.
In 1986, the Dual Classification by Wage Level Program (Program) was adopted by the California Insurance Commissioner following a WCIRB study initiated to address employer concerns about potential inequities in premiums paid due to variations in wage levels for construction employees. The Program was established for construction classifications that were large enough to be segregated into two statistically credible classifications and for which survey results showed:
The Program involves segregating a classification into two distinct (dual) classifications based on the hourly wages paid by employers assigned to the classification. The wage threshold for each classification was established at a level so that:
The WCIRB regularly reviews and adjusts dual wage thresholds to reflect several measures of wage inflation in construction.
Assignment of each high wage classification is subject to verification at the time of final audit that the employee’s regular hourly wage equals or exceeds the specified wage threshold. Payroll recordkeeping requirements for dual wage classifications are listed in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 at Part 3, Standard Classification System, Section IV, Special Industry Classification Procedures, Rule 2a.
You can learn more about dual wage classifications through these free resources available on wcirb.com: