Workers’ compensation insurance is a non-negotiable in the construction industry—and, as an employer, it’s important to understand all things workers’ comp. And if your business operates in the state of California? That means understanding workers’ compensation dual wage classifications.
Dual wage classifications are used to determine workers’ compensation premiums—and understanding how to classify your employees based on their regular hourly wage is a must to ensure you’re keeping proper records and paying the right premiums for your team.
But what, exactly, is the dual wage classification system? What do you, as an employer, need to understand about it? And what are the separate classifications for different types of construction workers with different compensation rates?
What Are Dual Wage Classifications?
Different types of jobs have different classifications for workers’ compensation purposes; the classifications help insurers determine how much an employer should pay in workers’ compensation premiums for their employees.
But in construction, many of those classifications are broken down into two wage classes based on the employee’s wage rates: low wage and high wage. These separate classifications are what’s known as dual wage classifications.
How Are Wage Classes Determined?
Each construction class has a certain wage threshold, set by the California Workers’ Compensation Insurance Rating Bureau (WCIRB), for determining whether an employee should be categorized as low wage or high wage; if the employee’s regular hourly rate falls above that threshold, they’re considered high wage. If it falls below the threshold? They’re categorized as low wage.
Generally, higher wage employees have lower workers’ comp premiums, even when they’re doing the same kind of work; this is because workers that demand a higher wage generally have more experience than their lower wage counterparts—and, as such, are less likely to get injured or have to file a workers’ comp claim.
But in the case of a workers’ compensation audit, in order to classify a worker under the high wage classification (and qualify for lower premiums), you need to be able to verify their total number of hours worked through payroll records and time cards (that not only show the total hours worked, but also start times, end times, and any meal times or breaks). If you don’t have the documentation to back up your employees’ total number of hours worked (and can prove that their hourly wage falls above the threshold), they’ll automatically be classified as low wage—and you may find yourself facing a hefty bill from your workers’ comp insurance services provider.
Bottom line? If you want to secure the best workers’ compensation premiums, make sure to classify your employees correctly—and keep impeccable records that back up your classifications.
What Are the Construction Classifications With Dual Wage Thresholds For 2021?
Now that you know what dual wage classification is, let’s cover the current construction classifications, class codes, and hourly wage thresholds for the construction industry in California.
(All hourly wage thresholds effective September 1, 2021):
Historical threshold: wcirb-dual-wage-thresholds-5year-2021.pdf
Keep Your Classifications Straight with Hourly
Keeping your classifications straight can be a challenge—particularly when your workers don’t work a set schedule. With Hourly’s all-in-one time tracking, payroll, and workers’ compensation platform, we’ll automatically track your team’s hours, ensure they’re in the proper wage class, and help you get the best workers’ comp rates possible.
Want to learn more about how Hourly can help you better manage your construction business and save money on your workers’ comp insurance? Sign up for a free 14-day trial today!
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe
