Gym Workers' Comp: Class Code 9063, Trainers, Audits

Your gym's workers' comp premium turns on three things: the class code the insurer assigns, what counts as payroll, and whether your trainers are employees or contractors. Many gyms are rated under a health or exercise club class that can cover trainers, front desk staff and cleaners together. Under National Council on Compensation Insurance (NCCI) rules, a code often listed for gyms is 9063, Health or Exercise Institute and Clerical, but confirm it for your state. Boutique formats such as Pilates, cycling, yoga and boxing may be classed differently, so get your class in writing. Codes vary by state and rating bureau, and the insurer assigns the code. This guide is for gym and studio buyers who want a clean first policy year and first audit.

The short answer

A class often listed for gyms is 9063, Health or Exercise Institute and Clerical, but some independent bureau states, such as New York, New Jersey, Pennsylvania and California, use other codes, and the insurer assigns the code.
Class codes describe the business, not each job, so front desk and trainers may be rated together unless a clerical exception or a truly separate operation applies.
Commissions and bonuses count as payroll. Optional tips generally do not. Uninsured contractors' pay can be added at audit.
Whether a trainer is an employee or a contractor depends on federal and state tests, so settle it with counsel before the first audit.
Report the ownership change to the insurer within 90 days where NCCI rules apply (other bureaus have their own routes). In an asset deal have your own policy in force at closing. In a stock deal the same company stays the insured, so confirm with the insurer that the policy, the insured details and the ownership report are in order.

Which class code applies to a gym?

The class code is the code the insurer assigns to describe what the business does, and the premium is a rate for that code per $100 of payroll. For gyms, a class often listed is 9063, whose title is "Health or Exercise Institute and Clerical." The Massachusetts rating bureau's scope text says it covers all employees, including clerical staff, of fitness clubs, health clubs, spas, massage salons, gymnasiums and exercise clubs. Massachusetts uses its own bureau, and a third-party lookup also lists 9063 for gyms, so the wording in your state or in the NCCI manual may differ. Confirm it with the insurer. Because clerical work sits inside the title in that text, a gym's front desk may not be split out to the general office class.

Do not assume your code. Three situations change the picture. A state that is not named below most likely uses NCCI rules, which your insurer can confirm.

Independent bureau states: California, Delaware, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania and Wisconsin. California, Pennsylvania and Delaware use classification systems that differ from NCCI's, so NCCI material does not carry over directly. Indiana, Massachusetts and North Carolina keep their own bureaus but use NCCI's experience rating plan.
State fund only: North Dakota, Ohio, Washington and Wyoming, where workers' comp must come from the state fund.
Texas: an NCCI state, but the only one where most private employers may choose not to carry workers' comp. A landlord, lender or franchisor may still ask for it.

If your state is not named here, ask the insurer which bureau's manual it uses.

The right class for martial arts, dance, climbing, yoga or cycling studios, children's play areas or a standalone massage or spa service depends on the bureau and the insurer, so ask the insurer for a written classification and compare it with the bureau's description for your state.

How does each job in a gym show up in premium?

Class codes classify the business and its location, not each employee's job. The table shows what that means for the roles a gym has. A different bureau or insurer may treat a role differently.

Gym roles and how premium treats them
Role	What the work involves	How it is usually rated
Trainers and group instructors	Demonstrating exercises, watching technique, spotting, adjusting programs, giving first aid	In the gym's main class
Front desk and sales	Memberships, check-in, billing questions	Inside the main class where the title includes clerical, with exceptions that depend on the bureau
Cleaners and maintenance	Locker rooms, equipment upkeep	In the main class
Cafe, pro shop or children's area staff	Food, retail or child supervision	Often in the main class, but a separate rating is possible only for truly separate operations, so the bureau and insurer decide
Massage or spa providers	Treatments	May stay in one class or be treated differently, depending on the bureau
Owner or manager	Running the business	Whether owners or officers are covered or excluded varies by state, so ask

If you work in the gym, decide whether your policy covers you or excludes you, because an excluded owner gets no workers' comp benefits for a work injury. See the workers' comp review.

One employee's pay can be split between two classes only if the records show actual time and pay in each. Percentage estimates are not enough, and without proper records all of the pay can go to the higher rated class. Where a gym's class already includes clerical work, a trainer who also covers the front desk usually needs no split, so splits matter only where two different classes truly apply. See class code corrections.

What counts as payroll for a gym?

The standard policy bases premium on payroll, and the definition is broader than base wages. Check what the gym actually pays:

Pay types and premium payroll
Pay type	Generally counted?
Hourly or salaried wages	Yes
Pay per class or per training session for an employee	Yes
Revenue share paid to a trainer who is an employee	Generally counted as pay, so confirm with the insurer
Membership sales commissions and personal training commissions	Yes
Bonuses, holiday, vacation and sick pay	Yes
Optional tips from members	Generally excluded, but check your manual
Overtime pay	Often only the straight-time portion counts if overtime is recorded separately, but this depends on the manual, so ask
Meals, lodging, employer-paid group insurance and pension contributions	Check the manual, with exceptions
Pay to uninsured contractors whose work could make the insurer liable	Can be added at audit

Rules differ by state and bureau, so treat the table as a starting list and ask the insurer for its manual's wording. For a gym with a commission-heavy sales team, the commissions are the line most often missed in estimates. Instructors who teach at several studios, or trainers who rent floor space from you, are the people to check first, because their pay is the most likely to be added or disputed at audit. See payroll estimates and audit bills.

Are your trainers employees or contractors?

Some gyms pay trainers as independent contractors or rent them space. Whether that is allowed depends on federal and state tests, not on what the paperwork is called. The U.S. Department of Labor describes a January 2024 final rule on contractor status that rescinded the 2021 rule, and the federal approach has been changing, so confirm the current position with employment counsel. Some states apply stricter tests. For workers' comp, the audit looks at who the insurer could be liable for, and an uninsured contractor's pay can be classified as if the workers were your employees.

A hypothetical example. At the first audit, an auditor finds six trainers paid on contractor forms who follow the gym's schedule, use its equipment and answer to its rules. Suppose each was paid $30,000 in the year. The auditor treats that $180,000 as payroll in the gym's class and bills the premium, and asks for any certificates of insurance the trainers hold. The wage and hour question is separate and can be larger. A buyer who found the arrangement in diligence could have priced it, fixed it or asked the seller to bear it. See 1099 contractors and the audit and inherited wage and hour exposure.

Does the seller's claims history follow you after closing?

The experience modification (mod) is a factor that compares a business's claims with those of similar businesses. When a business changes hands, its payroll and claims history usually follows to the buyer. Five points to know:

Report the change. In NCCI states the policy requires you to report an ownership change to the insurer within 90 days, whether or not the gym has a mod. A failure to report may be treated as an attempt to avoid the mod. Under NCCI rules a recalculated mod applies back to the date of the change, and some independent bureaus time it differently. Independent bureau states also have their own reporting routes.
Small gyms may have no mod. A business must reach a state-set minimum premium to qualify, and below it a factor of 1.00 applies.
The policy does not simply transfer. Rights and duties under the policy cannot be assigned without the insurer's written consent, so an asset buyer needs a new policy effective at closing.
The audit follows the named insured. In a stock deal a post-closing audit can bill your company for pre-closing payroll. In an asset deal the audit balance on the seller's policy is usually the seller's. The purchase agreement decides who bears the cost, so ask counsel.
Payroll providers and professional employer organizations (PEOs). A pay-as-you-go setup is tied to the seller's payroll account, and a PEO's coverage does not automatically extend to your new entity. See changing payroll providers.

In the four state fund states, ask about successor rules and a stop gap endorsement (employer's liability coverage added where the state fund does not provide it). See the workers' comp review.

How do you keep the first audit from surprising you?

The insurer can audit records during the policy and for up to three years after, so good records pay off. Use this list:

Keep a roster of every trainer and instructor with how each is paid and whether each carries their own workers' comp.
Get the class code in writing and compare it with the bureau's description for your state.
Keep payroll by role, with commissions and bonuses shown separately.
Keep time and pay records if any one person's pay is split between classes.
Collect certificates of insurance from every contractor, and decide with counsel who is an employee.
Update the estimate when you add classes, staff or a new service. See pay-as-you-go payment plans.
Hold cash for the audit balance, because the premium you pay during the year is an estimate.

The cost drivers guide shows how payroll fits into the whole program. A Morrow review can check the class, the estimate and the ownership report against your records, and new terms depend on the carrier.

Keep reading

Frequently asked questions

What workers' comp class code does a gym use?

A class often listed for gyms is 9063, Health or Exercise Institute and Clerical, based on a bureau scope text and a third-party lookup. Some other bureaus use different codes, and the insurer assigns the code, so ask for it in writing and check your state bureau's description.

Do I report the purchase of a gym to my workers' comp insurer?

Yes, in most cases. Where NCCI rules apply, the policy requires you to report an ownership change within 90 days, whether or not you have a mod. Other bureaus have their own forms, so ask your broker how to report it where your gym sits.

Are tips and commissions part of workers' comp payroll?

Commissions and bonuses generally count. Optional tips generally do not. Rules differ by state and bureau, so ask the insurer for its manual's wording.

Can my trainers be independent contractors for workers' comp?

It depends on federal and state tests and the facts of the work. An audit can add an uninsured contractor's pay to your premium base. Ask employment counsel, and keep certificates of insurance for any contractor you use.

Will the seller's claims history follow me after I buy a gym?

Usually yes. The experience mod (the factor that compares a business's claims with similar businesses) generally follows the business, though some small gyms have no mod. The rating bureau decides how an ownership change affects it, so report the change and ask your broker to confirm.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

Workers' Comp, Payroll and Class Codes for a Gym or Fitness Studio