For a solar installation company, workers' comp turns on three things. First is the class code your insurer assigns to crews, electricians and office staff. Second is the payroll you report in each class. Third is the claims history you inherit from the seller, which shows up as the experience mod (a multiplier that raises or lowers premium). Installers work on roofs and around electricity, and the class for solar work is not settled across states, so check this line early. This guide is for the buyer who inherited the policy, the payroll records and the crews, including staffing and subcontractor labor. Class codes vary by state and rating bureau, and the insurer assigns the code, so nothing here tells you which code you have.
The short answer
- Class codes describe the business in each state, not each person's job title. The insurer or rating bureau assigns them.
- Massachusetts, for example, puts solar panel installation (roof or ground-supported) in class 5538. Other states use other codes or systems, so ask your insurer which class applies to you.
- Premium starts as an estimate and is finalized at audit from actual payroll, so records by class matter.
- Staffing company workers and uninsured subcontractors can end up on your audit or your injury claim, so collect certificates before work starts.
- The seller's claims history usually follows the business. Report the ownership change to the insurer within 90 days.
Which class do solar installers, electricians and surveyors fall into?
A class code describes what the employer does in a state, and the insurer or rating bureau picks it. For solar, the answer is not settled. The Massachusetts rating bureau says that installing solar panels, ground-supported or on roofs, is assigned to class 5538 and includes all plumbing and electrical work. Outside Massachusetts, treat the class for solar work as an open question for your insurer and your state's rating bureau. Electrical wiring and roofing are different trades with their own classes. Ask the carrier in writing which class applies to your crews and what it includes. Your insurer or state rating bureau assigns your code, so treat every code here as an example.
| Employee group | How class rules usually treat them | What to ask the carrier |
|---|---|---|
| Installers on roofs and ground-mount sites | Usually in the class the insurer assigns to the main business | Whether the work is rooftop, ground-mount or both, and what the class definition includes |
| Licensed electricians who connect and test | In Massachusetts, electrical work done with a solar installation sits inside the solar class | Whether your state's bureau does the same, or rates electrical staff elsewhere |
| Site surveyors and designers who visit roofs | A clerical or sales class applies only if they never climb roofs; time on a roof changes the answer | How the carrier treats someone who surveys roofs and also draws plans |
| Service technicians | May sit in the installation class or a separate service class, depending on the bureau | Whether service calls sit in the installation class |
| Laborers, crew leads, warehouse and delivery staff | Ask how your bureau treats them before assuming a class | Whether any lead splits time between classes and has records to show it, and whether warehouse staff sit in the main class or a lower one, in writing |
| Salespeople, office staff, project managers and permit coordinators | An outside sales class (NCCI code 8742) or clerical class (NCCI code 8810) applies only if duties fit its definition; other systems differ | Whether anyone inspects roofs, visits job sites or does non-clerical work |
For the basics, see our glossary entry on the workers' comp class code and workers' comp class code corrections.
What if we also repair roofs or build ground-mount pads?
Mixed work is where class problems start. The Massachusetts text says site work, concrete pad construction and the supporting metal framework for ground-supported panels are rated separately, and roof repair done with a qualifying solar roof installation is rated under the appropriate roofing classes. So a company that installs panels, repairs roofs and builds pads can have payroll in more than one class.
One employee's pay can be split between classes only if the records show the actual time and pay in each class, and without them all of that employee's pay goes into the highest-rated class involved. If an auditor finds the work is not described by the classes on the policy, the insurer can reassign classes, which can change the audited premium. So ask the seller how crews tracked roof repair time.
How do installs and permit delays swing a solar payroll?
Install crews work in bursts. A job can sit for weeks waiting on a permit or utility approval, then need a full crew for a few days, so weekly payroll swings more than annual payroll suggests. The insurer sets a deposit from your forecast, settles the real figure after the policy ends, and may audit your books during the policy and for up to three years after. Wages, commissions, bonuses and paid holiday, vacation and sick time all count as payroll under the National Council on Compensation Insurance (NCCI) Basic Manual as published for North Carolina. That edition also leaves out the extra premium portion of overtime pay only if your records show overtime separately for each employee, so overtime in a heavy week needs its own line. Rules vary by state.
- Forecast from the pipeline. Signed jobs, permit status and the crew plan make a better estimate than a flat average.
- Log time by site type. Keep records that separate roof, ground-mount, battery and yard work, so a split between classes can be proven.
For pay-as-you-go billing, 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. For audit bills, see workers' comp payroll estimates and audit bills and the premium audit glossary entry.
Whose workers' comp responds to a staffing crew or a subcontractor?
The Bureau of Labor Statistics (BLS) puts 17 percent of solar photovoltaic (PV) installers in temporary help services, so staffing labor is common enough in the occupation that you should check whether your crews use it. Two situations follow, and they work differently.
- Subcontractor crews. The policy base includes pay to all other persons engaged in work that could make the company liable. At audit, an uninsured subcontractor's pay can be charged to you as if its workers were yours, at your mod. If records are missing, the auditor may use a minimum share of the contract price. The NCCI Basic Manual as published for North Carolina uses 90 percent for labor-only contracts. Other states differ.
- Staffing agency workers. Whose policy responds, and whether the pay reaches your audit, depends on the agency contract, how the agency secured coverage and state law. A certificate is evidence, not the end of the question.
A hypothetical example. A company adds four installers from a staffing agency for a 12-week run of installs, and in week eight one is injured on a roof. The first questions: whose policy responds, what the agency contract says about coverage and indemnity, how the audit treats the agency pay, and what the claim does to the company's mod. A certificate on file and a contract naming the responsible policy would shorten every answer.
Joining or leaving a professional employer organization (PEO) is not an ownership change for rating, and a PEO's coverage for the seller's workforce does not automatically extend to your new company in an asset purchase. Whether a crew member is an employee or a contractor is a legal question, and the U.S. Department of Labor says misclassified workers may lose minimum wage and overtime rights, so ask employment counsel and your accountant how past crews were paid. See 1099 contractors and the workers' comp audit and whether your subcontractors carry the required coverage.
Does the seller's claims history follow me, and what changes by state?
Usually yes. Under NCCI rules, buying a company's stock, or its assets and taking over operations, is an ownership change, and the seller's past payroll and claims history generally follows the business to you. A recalculated mod reaches back to the date of the change, whether it rises or falls. The policy asks you to tell the insurer within 90 days. If you do not, the rating organization may treat it as an attempt to avoid the mod and correct the mod, so send the notice in writing. Small companies may have no mod at all, so ask the carrier whether the seller's account was rated. See reviewing the experience mod for errors and the mod glossary entry.
Read the mod worksheet with solar in mind. Were the claims falls or electrical injuries? Did any claim involve a staffing worker who should not be on your experience? Was roof repair payroll classed with solar payroll or separately? In a stock deal the company owes its own audit balance, so an audit after closing can bill the company you now own for payroll from before closing. In an asset deal it is normally the seller's policy that is audited. The purchase agreement decides who bears the cost.
| Situation | What differs | What to do |
|---|---|---|
| Independent bureau state | Several states, including California, Massachusetts, New York, North Carolina and Pennsylvania, use their own bureaus, and California, Pennsylvania and Delaware use different class systems | Use that state's bureau rules, because bureaus differ on class systems and on the timing of a recalculated mod |
| Monopolistic state fund | North Dakota, Ohio, Washington and Wyoming require coverage from the state fund | Ask the fund about successor rules, because Washington and Ohio have buyer liability rules |
| California licensee | The Contractors State License Board ties the license to workers' comp coverage, with a certificate on file | Confirm the certificate is current for the entity holding the license, and ask the board whether any no-employee exemption applies to your classification |
What should I do this month?
- Collect the live policy, the two most recent audits and the mod worksheet, and mark which employee groups work on roofs. Ask how owners are treated too, because states differ on whether owners must be covered or can be excluded.
- Send the ownership change to the insurer in writing and count 90 days from closing.
- Obtain a certificate from every staffing company and subcontractor crew before the next install.
- Check whether past records logged roof, ground-mount, battery and yard hours separately and whether roof repair, pad work and electricians were classed correctly. Raise any problem with deal counsel before the indemnity or escrow period closes.
- Ask the broker which carriers can write solar crews in your state, and what the backup is, such as a state assigned risk plan, if regular carriers decline.
If you want help reading the audit, the mod worksheet and the class split, a Morrow review can flag questions to put to the carrier. Any new terms depend on carrier underwriting. Pair this list with what drives insurance cost for a solar installation company and coverage gaps in a solar installation company you bought. The coverage line is explained at workers' compensation insurance.
Keep reading
- What Drives Insurance Cost for a Solar Installation Company?
- Coverage Gaps in a Solar Installation Company You Bought
- Payroll Estimates and Surprise Workers' Comp Audit Bills
- Do 1099 Contractors Count in Your Workers' Comp Audit?
- How to Check Your Experience Mod for Errors After an Acquisition
- All guides for new business owners
Frequently asked questions
What workers' comp class code does a solar installation company use?
It depends on where you work. The Massachusetts bureau assigns solar panel installation, roof or ground-supported, to class 5538. Other states may use different codes or systems, so ask your insurer which class applies and what work it includes.
Can electricians and installers be in different classes?
It depends on the bureau. In Massachusetts text, electrical work done with a solar installation falls inside the solar class. Other states may rate electricians differently. A split between classes needs records showing actual time and pay in each class.
If I use a staffing agency, do I still have workers' comp exposure?
Possibly. Whose policy responds depends on the contract, state law and how the agency arranged coverage. Uninsured labor can be charged to you at audit, so ask for the agency's certificate and contract terms before the crew starts.
Will the seller's injury claims history follow me?
Usually. Under NCCI rules, buying stock or assets and taking over operations is an ownership change, and the seller's claims history generally follows the business. Dropping it is rare and needs several conditions. Report the change to the insurer within 90 days.
Can I put salespeople and project managers in a clerical class?
Only if their duties meet the class definition. Reps or coordinators who regularly inspect roofs or visit job sites may not fit. Ask the carrier, and keep records of actual duties.
References
- U.S. Bureau of Labor Statistics: Occupational Outlook Handbook, Solar Photovoltaic Installers
- Workers' Compensation Rating and Inspection Bureau of Massachusetts: Classification Search, class 5190
- Workers' Compensation Rating and Inspection Bureau of Massachusetts: Classification Search, class 5538
- NCCI: Experience Rating Plan Manual, ownership change rules (Texas filing of Item E-1411)
- NCCI: Reporting Ownership Change Information
- NCRB: Basic Manual, Rule 2, Premium and Payroll (NCCI, North Carolina edition)
- California Contractors State License Board: Workers' Compensation Insurance Requirements
- U.S. Department of Labor, Wage and Hour Division: Misclassification of Employees as Independent Contractors
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.
Morrow · 25 New Chardon Street, 4th Floor, Boston, MA 02114
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.