Workers Comp Code 5606: Understanding Class Code 5606 for Construction Managers

History Of The 5606 Workers Comp Code

5606 Workers Comp Code — Contractor — Executive Supervisor was created in December of 1915 and intended to cover senior level construction managers. This workers comp class code had always been the source of confusion and premium disputes (it still is to this day). In 2005 NCCI proposed changes to both the name and description of this NCCI Code. Changes to workers comp class codes name to be adopted individually by each state, so, complete approval may have taken another year or more.

The original intent of the code is to cover the exposures of an upper-level manager where a level of supervision exists between that manager and the actual worker. It was never intended to cover amanager directly supervising a construction worker.

Construction Executive Supervisor and Foreman

However, the original classification code wording, or phraseology, made it difficult to determine:

The level of supervision required to be qualified or disqualified from Workers Comp Code 5606
Whether supervision can only be exercised through an insured’s own employees
Whether supervision can be also exercised through a subcontractor’s foremen

What Is The Updated Workers Comp Code 5606 Definition?

The most obvious change is the phraseology (title or name) of this NCCI code. It was formerly Class Code 5606 Executive Supervisor. The revised name is WC Code 5606 Contractor - Project Manager, Construction Executive, Construction Manager, or Construction Superintendent.

Based on the change in phraseology it sounds like NCCI expanded the scope of this workers comp class code. But, in reality, the wc class code description is more restrictive.

There are two qualifications needed in order to apply this code:
1. There must be a layer of supervision (Superintendent, Project Manager, etc.) between anybody classified as workers comp code 5606 and the workers. 2. That intermediary must be involved to provide supervision that is usually exercised through a job superintendent or foreman.

5606 Construction Superintendent and Foreman

In the past 5606 Executive Supervisors would engage in activities like:

Cleaning up
Instruct workers
Perform inspections themselves including roofing

These and other functions would expose the Executive Supervisor to job site risks that correspond to other workers comp codes and higher work comp rates.

The executive supervisor is not allowed to do any type of construction work or direct supervision, except as noted before.

Why Not Just Classify Class Code 5606 Supervisors As Worker Comp Code 8810 - Clerical?

It's true that 5606 Executive Supervisors are expected to spend a considerable amount of time in the office performing or overseeing activities from a desk such as:

Directing the production of the design plans
Develop and maintain construction documents
Estimating
Start up
Scheduling
Actual construction
Expediting
Inspections
Quality control
Delivery of the project according to specifications, budget, and deadline

However, unlike 8810 Clerical Office Workers, the Executive Supervisors do visit job sites:

To consult with the foreperson or superintendent in charge of workers
Monitor the progress of the projects
Deliver important communications personally to those supervising workers
Oversee multiple projects at different job sites

What Are 5606 Workers Comp Code Traps To Avoid?

First, when it comes to construction workers comp codes be careful regarding the subcontractors you hire.

1) If you hire a subcontractor without a foreman or superintendent on a location where your construction manager visits, then all of that manager's payroll for that policy year is assigned to the highest rated construction class code applicable.

2) Similarly, if you hire a sole proprietor with no employees as a subcontractor, that would automatically prevent the assignment of Workers Comp Code 5606 to a construction manager/superintendent. The subcontractor would not have the required supervisory level foreman requiring the Executive Supervisor to communicate directly with workers.

3) Significantly, Class Code 5606 is not eligible for "Separation Of Payroll" for workers comp construction class codes. If you're thinking that a situation it's "no big deal" because you'll keep proper records to classify your Supervisor as 5606 for her other projects, you can't. For example, if your Supervisor oversees 4 projects and one of them is a roofer - sole proprietor, that Supervisor's entire annual payroll is supposed to be in the roofing classification code.

What Is The Potential Premium Impact From Misclassification Of Class Code 5606?

Here are construction workers comp rates in Missouri for Accident Fund Insurance Company of America (2024)

Contractor Project Manager Class Code 5606 $1.45 / $100 remuneration

Landscape Gardening Class Code 0042 $7.67 / $100 remuneration

Carpentry Interior Trim Class Code 5437 $5.95 / $100 remuneration

Carpentry Residential Class Code 5645 $10.47 / $100 remuneration

Roofing Class Code 5551 $18.41 / $100 remuneration

As you can see, maintaining the layer of separation between your 5606 Supreintendent and workers is financially significant.

Conclusion

A contractor with 5606 superintendents / supervisors has to be particularly careful about maintaining separation between them and workers. Otherwise, it could face a much larger than expected workers compensation insurance premium increase.

If you are in California which is not an NCCI State, your rating bureau (the WCIRB) has a nice WC Code 5606 infographic.

Do you still have questions after doing some of your own research?

Want to know how a reassignment of payroll could effect your experience modification rate?

Want more detailed classification information?

Want help with lodging a dispute?

Or, would just like help? Please call us.

FAQ: Why is Workers Compensation Code 5606 Different From Other Construction Workers Comp Codes?

Workers Compensation Code 5606 is different from the other construction workers comp codes in that it can be a companion code to all of the others. Any contractor with construction superintendents, regardless of trade (roofing, electrical, concrete, etc) can have the 5606 class code on its policy.

In this sense work comp code 5606 is similar to the standard exception classification codes like 8810 Clerical Office which can be applied to any operation with clerical staff. Both workers comp class codes have strict rules for application (see above for wc code 5606) to separate these employees from the hazards of primary operations.

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