California Workers’ Compensation Dual Wage Thresholds Increases Approved for Construction Classes in 2020 – Bottom Line Hit Hard

Originally published May 23, 2019.
Updated September 19, 2019.

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

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In an effort to keep you informed, so that you can begin to budget for 2020, we wanted to let you know of the approved changes in the dual wage classifications effective January 1, 2020.

The increases range from $1.00 to $3.00 per hour, to keep the thresholds in line with inflation. However these changes will have an immediate effect on your bottom line. 

In the classes of business that are facing a $3 increase, this equates to a low of 9.3% to a high of 10.3%. See the chart below for the actual proposed changes. Not only will this have an impact on wages, payroll taxes, and your bottom line, it may also have an impact on your workers compensation premiums. If you find yourself in a situation where the wage increase isn’t practical, this will push those employees into the under classification which will have a substantially higher workers compensation rate. In either case, proactive planning will be required so you’re not caught unprepared.

Following are the individual classes and approved changes:

Dual Wage Thresholds

Classification Current Threshold 2020 Threshold Threshold Difference Last Changed
5027/5028 Masonry $27 $28 $1 2013
5190/5140 Electrical $32 $32 $0 2018
5183/5187 Plumbing/Heating/Refrigeration $26 $28 $2 2014
5185-5186 Fire Sprinkler $27 $29 $2 2009
5201-5205 Concrete or Cement Work $25 $28 $3 2018
5403/5432 Carpentry $32 $35 $3 2018
5446/5447 Wallboard Application $34 $36 $2 2018
5467/5470 Glaizers $32 $33 $1 2019
5474/5482 Painting/Waterproofing $26 $28 $2 2018
5484/5485 Plastering or Stucco Work $29 $32 $3 2018
5538/5542 Sheet Metal Work $27 $27 $0 2014
5552/5553 Roofing $25 $27 $2 2018
5632/5633 Steel Framing $32 $35 $3 2018
6218/6220 Excavation/Grading $31 $34 $3 2018
6307/6308 Sewer Construction $31 $34 $3 2018
6315/6316 Water/Gas Mains $31 $34 $3 2018
Table Source: WCIRB.com.

In an effort to help control workers compensation costs, we have developed several proprietary programs including the RM365 Advantage Safety Star Program™ and RM365 StatTrac™ that can help control these increases. Please reach out to me at sclayton@ranchomesa.com to ask any questions about the above or to learn more about our proprietary programs. We will reach back out once the decision on the above proposed changes is decided in order to help you prepare.