WORKERS COMP CLASSIFICATION.
Workers compensation classification codes determine how much you pay per dollar of payroll for each employee, and they vary enormously by job type. Most small contractors run one code across the whole field crew, usually the highest risk code for their trade, which overpays on every check for anyone who isn't doing general labor. Premium is charged on estimated payroll and audited after year end, so a wrong code keeps costing you until the audit finds it.
Comp is a cost of labor, which means it belongs in your burdened labor rate and in every bid you write. Two contractors paying the same wages can carry very different labor burdens if one has coded supervision, safety, and equipment operating correctly and the other hasn't. The experience modification rate does the same thing from the other side, multiplying whatever rate you're on. Get both under control and the same crew costs less to put on the job, and that difference comes back as margin on work you already know how to win.
WHAT IT MEANS.
A workers comp classification code is the risk class an insurer assigns to a type of work, and it sets how much premium you pay per dollar of payroll for each employee.
Workers comp sits in two places at once. It's an insurance bill, and it's a line in the labor burden that prices every hour you bid.
Contractors who treat it only as an insurance bill negotiate the policy once a year and never touch the two inputs that drive it, which are the codes sitting on the payroll and the claims history behind the modification factor. Both of those are inside your control, and both take a year to move, which is why the work starts at the beginning of a policy year rather than at renewal.
WHERE THE PREMIUM GOES WRONG.
Using a blended rate for everyone
Many small construction companies apply a single workers comp classification code across all field employees, usually the highest risk code relevant to their trade. It's simple to administer and it's expensive. Employees in lower risk roles such as light supervision, safety management, surveying, and equipment operating qualify for lower rates than general labor, so incorrect coding inflates the comp premium on every paycheck.
Annual audit surprises
Workers comp is paid on estimated payroll throughout the year and audited after year end when the actual payroll is known. Additional premium is owed if actual payroll comes in above the estimate, and if classification codes changed mid year without a policy update, the audit produces charges nobody saw coming. Most contractors treat the audit as an annual surprise rather than a managed process.
Experience modification rate higher than necessary
Your experience modification rate, the EMR, is calculated from your claims history and directly affects your workers comp premium. A high EMR raises the premium at every renewal, on every code, for every employee on the payroll. Most contractors don't monitor the EMR or know which part of their claims history is driving it above the 1.0 benchmark.
WHAT WE CHANGE.
SPM reviews workers comp classification codes during the annual financial review for every client, so each employee class carries the correct rate for the duties the person performs. Office staff, field supervisors who aren't performing manual work, and equipment operators often qualify for lower rates than general labor. Correct classification reduces the annual premium, and the codes get configured in ControlQore so the payroll system runs at the right rate from day one.
Workers comp premium is based on estimated payroll at policy inception and audited after year end. SPM tracks actual payroll against the policy estimate throughout the year and flags it when the trend runs well above or well below the estimate. A mid year adjustment keeps the audit from producing a large charge in either direction, because a large refund is money you financed for a year and a large charge is a bill you didn't budget.
SPM tracks your EMR trend, points at the claims likely to affect next policy year's modification factor, and flags where proactive claims management could limit the EMR impact. The factor is calculated from history, so the only time to influence it's while the claim is still open. Watching it monthly turns the renewal into a conversation you have already had.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
