The Hidden Numbers That Control Your Premium
Every workers' comp policy in South Carolina uses class codes — four-digit numbers assigned by the National Council on Compensation Insurance (NCCI) that classify employees by the type of work they perform. Each code carries its own rate per $100 of payroll, based on the historical injury frequency and severity for that type of work. A clerical worker might be rated at $0.20 per $100, while a roofer might be rated at $20 or more. Misclassification — intentional or accidental — is one of the most common and costly premium errors. This video explains how the system works and what to watch for.
How NCCI class codes are assigned and what determines the rate for each code
Why the same employee can be assigned different codes based on actual job duties
How misclassification inflates your premium — and why it's audited every year
The most commonly misused codes in South Carolina and what triggers carrier scrutiny
How to legitimately reduce premium through proper classification of your workforce
Every class code in the NCCI system has a base rate — a cost per $100 of payroll — that reflects the historical claims experience for that type of work. A code assigned to a clerical office employee might cost $0.20 per $100 of payroll, meaning an employee earning $50,000 a year generates only $100 in base premium. A code for a roofing employee doing hands-on work at height might cost $20 or more per $100, meaning that same $50,000 salary generates $10,000 in base premium. Multiply those rates across your entire payroll and the difference between correct and incorrect classification can be thousands of dollars annually. The class code applied to each employee is not arbitrary — it is supposed to reflect the actual work that employee performs, not the title on their business card.
In South Carolina, the most frequent class code misuse patterns involve assigning office or clerical codes (such as 8810) to employees who perform any physical work, using a contractor's lower-rated trade code for workers who actually perform higher-rated specialty work, and applying a single code to an entire workforce when different employees perform meaningfully different duties. Carriers and auditors are trained to look for these patterns. When an audit reveals that workers were misclassified — even unintentionally — the carrier will recalculate premium using the correct codes and issue a bill for the difference. The defense is accurate classification from the start, maintained with clear job duty documentation.
Most businesses in South Carolina are not limited to a single class code. A construction company might have workers properly assigned to multiple codes: field laborers under one code, supervisors who do no hands-on work under a lower-rated supervisor code, and office staff under a clerical code. Capturing these distinctions accurately and documenting them properly can legitimately reduce your workers' comp premium without misrepresentation. The key is that the classification must reflect actual job duties, and the payroll must be split accurately between codes. Some states allow splitting payroll for employees who perform multiple types of work — NCCI rules govern whether this applies in a given situation in South Carolina.
Class codes are NCCI four-digit numbers that assign a rate per $100 of payroll based on job type
The same dollar of payroll can cost dramatically different amounts depending on the code assigned
Misclassification — in either direction — is identified and corrected at audit
South Carolina businesses should document job duties clearly to support accurate classification
Using multiple codes to distinguish different job functions is legitimate and can reduce premium
Class codes are assigned by your insurance carrier based on the type of work performed by your employees and the nature of your business. Your agent plays a role in presenting your operations accurately so that the correct codes are applied. NCCI publishes the classification definitions and rates, but the carrier makes the assignment. If you believe your employees are miscoded, you can request a review with your agent.
The 8810 clerical code applies only to employees who work exclusively in an office environment, perform no physical work related to the business operations, and have no contact with the production side of the business. An estimator who visits job sites, a supervisor who occasionally handles materials, or an owner who participates in field work cannot be assigned to 8810. Carriers audit clerical code usage carefully because misuse is common.
The governing class code is the single code that represents the largest portion of your payroll and describes the primary nature of your business. Most policies have a governing code plus additional codes for employees who perform different work. The governing code also affects which carrier programs and loss-sensitive arrangements are available to you, so accurate identification of the governing code matters beyond just premium calculation.
Proper classification can save thousands. Let RapidSync Specialty help you understand your codes and optimize your premium.
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