Roofing Company Workers' Comp and Class Codes

For a roofing company, workers' compensation turns on three things: the class codes for your crews, yard staff and estimators, the payroll you report, and the experience mod you inherit from the seller (a factor that raises or lowers your premium based on the company's claims history). Carriers watch this line closely: BLS puts the 2024 roofer fatality rate at 48.7 per 100,000 full-time equivalent workers, against 3.3 for all workers, and roofing is a small occupation, so treat the figure as approximate. This guide is for the buyer who inherited the policy, the payroll records and the subcontractor crews, and wants to know what to check. Class codes vary by state and bureau, and the insurer assigns the code, so no code here is advice.

The short answer

Class codes classify the employer's business by state. Roofing is split in some states and combined in others, so verify with the insurer and bureau for your state.
One employee's pay can be split between classes only with records of actual time and pay in each. Otherwise it goes to the highest-rated class.
An uninsured subcontractor crew can be charged to you at audit and can create injury exposure. Collect certificates before work starts.
The seller's mod and claims usually follow the business. NCCI-style policies ask you to report an ownership change within 90 days, and other states set their own timing.
Monopolistic state funds, independent bureaus and Texas employers who choose not to carry coverage change the rules, so confirm yours.

How are my roofers, yard staff and estimators treated for workers' comp classes?

Roofing is rated differently from state to state. Some states use one combined roofing class, and some split sloped roofs from flat ones. Massachusetts, for example, uses class 5545 for sloped roofs (a pitch greater than three inches per foot, plus waterproofing and insulation) and class 5547 for flat or built-up roofs. A third-party lookup shows class 5551, titled "Roofing, All Kinds and Drivers," in many other states, while California, Delaware, Pennsylvania, Michigan and New York use their own variations. Class codes classify the employer's business in each state, not each person's job title, and the insurer or rating bureau assigns them. Treat every code here as an example to check, never as the code your company has, and ask your insurer or the bureau for the written class description for your state.

Roofing company employee groups and how class rules generally treat each
Employee group	How rules usually treat them	What to check
Roofers and laborers on the roof	In the main roofing class	That the class matches the roof types you work on
Foremen and crew leads	Rules vary, so ask the insurer how a lead is classed	Whether any lead splits time between roofing and other work, and has records of actual time and pay in each
Drivers and yard or storage employees	The Massachusetts bureau includes drivers and storage employees in the roofing classes and says class 8227 for yard employees cannot be used to split them out	Do not assume yard payroll can move to a lower class in any state
Estimators and salespeople	An outside salesperson class (8742) applies only if the duties fit its definition. Under Massachusetts bureau rules, an estimator who regularly goes on roofs generally does not fit	How often each estimator climbs, inspects or works on roofs
Office staff	In the NCCI Basic Manual as published for North Carolina, a clerical class (8810) applies only to employees whose duties fit it and whose work area is separated from operating hazards	That clerical employees do not do field work
Sheet metal shop crew	In Massachusetts a shop fabrication class (5538) may qualify only with proper payroll breakdowns, and installing flashing on roofing jobs stays in the roofing class	A real separate crew, a real shop and separate records
Owners and officers	Whether a working owner must be covered, may elect out or is counted at a set payroll amount depends on the state, the type of entity and the policy	Ask the insurer in writing how an owner who works on roofs is treated, and have your accountant confirm any entity or tax question

Whatever your state, put these questions to the insurer or the bureau. Which class is each crew in, and what does the class description include? Are any estimators or salespeople rated separately, and on what duties?

A hypothetical example. The seller put the yard and storage employees in a separate, lower-rated class. At the first audit after closing, the auditor applies rules like the Massachusetts bureau's, under which the roofing class already includes yard and storage employees and drivers. The auditor moves their payroll into the roofing class, and the premium for the audited year changes. The questions are whether earlier years are reopened, who owes the difference, and what the purchase agreement says about it.

See workers' comp class code corrections, our class code glossary entry and workers' comp for roofers.

How do payroll estimates and audits work for a seasonal crew?

Your premium starts as an estimate. The insurer sets it from your expected payroll in each class, bills a deposit, and finalizes the amount after the policy ends from actual payroll. It can audit your records during the policy and for up to three years afterward. Under the NCCI Basic Manual as published for North Carolina, wages, commissions, bonuses and the pay for holidays, vacation and sick time all count as payroll. A roofing company can see a big swing between a busy summer and a slow winter, especially in northern states where winter limits roof work.

Estimate with the season in mind. A low estimate lowers the deposit and raises the audit bill, so build the number month by month, with a summer peak and a winter trough, then add the months up.
Keep records by class. Pay records should show who worked on what, by week, so a split between classes can be proven.
Record overtime separately. Roofing crews often work long summer hours. Under the NCCI Basic Manual as published for North Carolina, the extra premium portion of overtime pay is left out of payroll only if your records show overtime separately by employee. Other states and bureaus may differ, so ask your insurer what it needs.
Tell the broker about changes. New crews, a new service line or a storm surge belong in a mid-term update, as the example in what drives insurance cost for a roofing company shows.

Pay-as-you-go billing bills from actual payroll each cycle instead of a large deposit. Availability depends on the carrier and payroll provider, and it does not end the audit. See pay-as-you-go workers' comp payment plans. If you change payroll providers at closing, read changing payroll providers without a workers' comp gap. Our premium audit entry has the basics.

What happens when a subcontractor or 1099 crew has no coverage?

Hiring a subcontractor crew does not remove you from the workers' comp picture. The policy counts pay to anyone who works for you in a way that could make the insurer liable, and that is how an uninsured subcontractor ends up on your bill. The policy's own words are "all other persons engaged in work that could make us liable." The Bureau of Labor Statistics (BLS) counts about 20 percent of roofers as self-employed, so small, thinly insured crews are a realistic gap.

With no payroll records for an uninsured crew, the audit may use minimum percentages of the subcontract price. Under the NCCI Basic Manual as published for North Carolina, that is 90 percent of a labor-only subcontract and 50 percent of a labor-and-materials one, charged at the company's mod and class rate. Other states and bureaus may differ. If an uninsured crew member falls, the company may also face questions about its responsibility for the injury, depending on state law. A certificate on file before the work starts changes both the audit and the conversation.

One caution: worker classification is a legal question. The Department of Labor says misclassifying employees as independent contractors is a serious problem. Ask employment counsel and your accountant how past crews were paid, and read inherited wage and hour exposure. The check-in routine for crews is in whether your subcontractors carry the required coverage.

Do the seller's claims follow me (the experience mod), and what changes by state?

The experience mod compares a company's past workers' comp claims with what is typical for its class and payroll, and multiplies the premium up or down. Usually the seller's history follows the business to you. Under National Council on Compensation Insurance (NCCI) rules, buying a company's stock or assets and taking over its operations is a change in ownership, and the seller's past payroll and claims history generally follows the business.

A mod recalculated because of the change applies retroactively to the date of the change, whether it goes up or down. Under these NCCI rules the policy asks you to report the change to the insurer within 90 days, and failing to report can be treated as an attempt to avoid the mod. Ask whether the company has enough premium to have a mod at all and, for a holding company, how common ownership above 50 percent combines add-on experience.

New York, California and other independent bureau states have their own ownership rules and timing, so ask your insurer and the bureau for your state. One bad claim year can move a mod, which is why it deserves a review. See review the experience mod for errors and the mod glossary entry.

Where roofing workers' comp rules change by state
Situation	What differs	What to do
Independent bureau state	Eleven states, including California, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina and Pennsylvania, use their own bureaus. Class systems and codes can differ from NCCI's, as in California, Pennsylvania and Delaware	Use that state's bureau manual. Some bureaus, such as North Carolina's and Massachusetts', adopt parts of the NCCI plan, so ask the bureau which rules apply
Monopolistic state fund	North Dakota, Ohio, Washington and Wyoming require workers' comp to come from the state fund. A buyer's liability for a seller's unpaid amounts is a real issue in Washington and Ohio (details below the table)	Ask the fund about successor rules. State fund policies do not include employers liability, so ask about stop-gap coverage too
Texas	Most private employers may choose not to carry workers' comp, but commercial roofing customers and general contractors commonly ask for proof of it	Check your contracts and loan documents before relying on that choice
California	An active roofing (C-39) licensee must carry workers' comp or a certificate of self-insurance whether or not it has employees, and cannot file the no-employee exemption	Confirm the policy or certificate is active, since a lapse can cost the classification

Washington: a buyer can become liable for the seller's unpaid amounts unless it gives the state Department of Labor and Industries written notice and no assessment is issued within 180 days, and the buyer must withhold enough of the price to cover amounts owed (Revised Code of Washington (RCW) 51.16.200).
Ohio: the Bureau of Workers' Compensation can transfer a predecessor's experience and obligations to a successor (Ohio Administrative Code 4123-17-02).

What should I do this month?

Use this list with your broker and your payroll provider.

Get the current policy, the last two audits and the mod worksheet. Confirm which class codes apply to each employee group.
Report the ownership change to the insurer in writing if you have not already, and track the 90 day clock from closing. Ask whether your state sets different timing.
Match payroll to each class and check that the estimate fits your plan for the year.
Pull the certificate file for every subcontractor crew and collect missing certificates before the next job.
Ask whether the seller's yard, driver and estimator payroll was in the right classes, and tell your deal counsel about any problem before the indemnity or escrow period ends.
Ask the insurer in writing how each owner, officer, estimator and crew lead who works on roofs is treated, and what records it needs for any split of time.
Ask the broker which markets can write roofing in your state, including assigned risk or a state fund if the voluntary market declines.

Morrow can review the policy, audits and mod worksheet against your payroll records and ask carriers about roofing in your state. Terms depend on carrier underwriting. Pair this list with workers' comp payroll estimates and audit bills and the coverage gaps new owners of roofing companies find. The workers' comp coverage line for a roofer is covered at workers' compensation insurance.

Keep reading

Frequently asked questions

What workers' comp class code does a roofing company use?

It depends on the state and the rating bureau, and the insurer assigns it. Massachusetts uses 5545 for sloped roofs and 5547 for flat or built-up roofs. A third-party lookup shows 5551 in many other states, with variations elsewhere. Ask your insurer which class applies and what it includes.

Can I put yard employees in a cheaper class?

Do not assume so. The Massachusetts bureau says its roofing classes already include yard and storage employees and drivers, and that the yard employee class cannot be used to split them out. Other states and bureaus have their own rules, and a split needs proper records.

Do estimators and salespeople need roofing class payroll?

It depends on what they do. A salesperson or clerical class applies only if duties fit its definition. Under Massachusetts bureau rules, an estimator who regularly goes on roofs generally does not fit, and mixed-duty employees go to the highest-rated class involved.

Am I responsible if a subcontractor's roofer is hurt on my job?

You can be, depending on the state and on whether the subcontractor carried workers' comp. An uninsured sub's payroll can also be added to your audit. Written subcontracts and current certificates reduce the risk, and employment counsel can explain your state's rules.

Does buying a roofing company reset the experience mod?

Usually not. Under NCCI rules the seller's experience generally transfers to the buyer, and excluding it is rare. A mod recalculated for an ownership change applies retroactively to the date of the change. Report the change within 90 days, and ask the bureau or insurer how it applies in your state, because New York, California and other independent bureau states have their own ownership rules.

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 Roofing Company