Construction Workers Comp Code 5437 | Carpentry – Installation of Cabinet Work or Interior Trim

5437 Most Misclassified Carpentry Workers Comp Class Code According To NCCI

NCCI maintains an ongoing construction workers comp program called the Classification Inspection Program in all NCCI states through which it conducts classification inspections. The intent of this is to monitor the application of the NCCI classification codes to determine the accuracy of those NCCI Codes used on an insured's policy and to the extent they accurately reflect the policy holder's operations.

One of the NCCI findings from the most recent "Top 10 List" is that Workers comp class code 5437 was one of the top ten most misclassified workers comp class codes in 2023. In fact, it was the 2nd most misclassified construction class code, and #1 most misclassified carpentry work comp class code.

5437 NCCI Code Most Misapplied Construction Class Code

The NCCI report found that more than 25% of the policies inspected with WC Class Code 5437 as the governing classification resulted in a change to their governing class code. That means a quarter of these misclassified businesses were placed in one of several other workers comp construction class codes for carpentry.

Significant Premium Increase

Of those 25% found to be incorrectly classified, however, NCCI reclassified more than 30% to Code 5645—Carpentry—Construction of Residential Dwellings Not Exceeding Three Stories in Height. I checked the rate for both WC class codes here in Missouri and NCCI Code 5645 is twice the rate of 5437

Overview Of Workers Comp Code 5437

Before discussing the reassignment of Workers Comp Code 5437 to 5645 Workers Comp Code, let's have a brief overview: Code 5437 applies to interior carpentry work focused on finishing of residential or commercial buildings; specialized tasks that require skilled craftsmanship including:

Installation of cabinets, counters, and bookshelves.
Trim work, including molding, cornices, and baseboards.
Interior staircases and railing installation.
Finished wooden flooring installation.

Construction Workers Comp Code 5437 Carpenter

Overview Of Workers Comp Code 5645

Code 5645 applies to contractors involved in constructing residential homes up to three stories in height. This construction class code applies to a wide variety of carpentry operations involved in residential construction such as:

Framing and structural woodwork.
Installation of doors, windows, and roofing.
Interior finishing, such as drywall, flooring, and cabinetry.
Remodeling and repair projects.

WC class code 5645 also applies to contractors working on structures no taller than 3 stories including townhouses, duplexes, and single-family homes.

Construction Workers Comp Code 5645 Carpenter Stairs

Construction Workers Comp Code 5645 Carpenter Framing

Reassignment Of Work Comp Code 5437 To Work Comp Code 5645

NCCI says that they reassigned employers from Code 5437 to Code 5645 for one of 2 reasons:

First, "Trim carpentry work was being performed by the employees of a carpentry or general contractor that was responsible for the construction of the entire residential dwelling"
Second, "Contractor performed remodeling or repair work that included framing or structural work"

The manual rules do state that Code 5645 includes all carpentry work related to the construction of residential dwellings when performed by employees of the same carpentry or general contractor responsible for the entire construction project.

It's surprising that so many contractors have been found misclassified in these codes for construction. This has always been the rule with class code 5437 and class code 5645. Class code 5437 has only applied to specialty contractors doing cabinet and trim. And, if the general contractor does other carpentry work like building a house, all trim, drywall, doors, etc., all of the carpentry activities is included in Class Code 5645.

Learn More About Carpentry Workers Comp Class Codes

There are several Carpentry Construction Class Codes. If you have any questions about the proper classification of your operations, you can start with our Construction Workers Compensation Class Code Lookup Table. Type "Carpentry" in the search bar to review all of the possible Work Comp Class Codes.

Construction Workers Compensation Class Code Lookup Table

If you still have questions after doing some of your own research, want to know how a reassignment could effect your experience modification rate, need more detailed classification information, or would just like help, call us.

Stuart Cytron • stuart@cytrongroup.com • LinkedIn • (314) 757-8079 t