On September 1, 2026, California raises the hourly wage threshold on all 16 dual wage construction classifications. Each of these trades has two class codes: one for employees whose regular hourly wage equals or exceeds the threshold, and one for everyone below it. The lower wage code carries the higher rate. The increases run from $2 to $5 per hour, and they apply to policies incepting on or after September 1, 2026, so most contractors meet the new number at renewal rather than on the day itself. The Insurance Commissioner approved the change as filed on May 15, 2026. As ContractorsInsured.net (CA Lic #6015321 / TX Lic #3305690), we review California contractor payroll against the new thresholds before renewal so the reclassification does not arrive as an audit bill.
Our team also speaks Spanish. Call (949) 522-3284 if you want a second pair of eyes on your class codes.
What changes on September 1, 2026
Verified figures Every number below is taken from the WCIRB September 1, 2026 Regulatory Filing and the WCIRB threshold table published May 28, 2026. Both are linked at the bottom of this page.
California splits 16 construction trades into two workers compensation class codes each, separated by an hourly wage line. On September 1, 2026 that line moves up on every one of them. The class code numbers stay the same. Only the wage that decides which code your payroll lands in changes.
| Trade | Now | From Sept 1, 2026 | Change | Code below higher rate | Code at or above lower rate |
|---|---|---|---|---|---|
| Masonry | $35 | $37 | +$2 | 5027 | 5028 |
| Plumbing, HVAC equipment, refrigeration | $32 | $35 | +$3 | 5183 | 5187 |
| Automatic sprinkler installation | $33 | $36 | +$3 | 5185 | 5186 |
| Electrical wiring | $36 | $40 | +$4 | 5190 | 5140 |
| Concrete or cement work | $33 | $36 | +$3 | 5201 | 5205 |
| Carpentry | $41 | $46 | +$5 | 5403 | 5432 |
| Wallboard installation | $41 | $45 | +$4 | 5446 | 5447 |
| Glaziers | $39 | $43 | +$4 | 5467 | 5470 |
| Painting, wallpaper, waterproofing | $32 | $36 | +$4 | 5474 | 5482 |
| Plastering or stucco work | $38 | $42 | +$4 | 5484 | 5485 |
| Sheet metal work, HVAC ductwork | $33 | $37 | +$4 | 5538 | 5542 |
| Roofing | $31 | $33 | +$2 | 5552 | 5553 |
| Steel framing | $41 | $46 | +$5 | 5632 | 5633 |
| Excavation, grading, land leveling | $40 | $45 | +$5 | 6218 | 6220 |
| Sewer construction | $40 | $45 | +$5 | 6307 | 6308 |
| Water or gas mains or connections | $40 | $45 | +$5 | 6315 | 6316 |
The pattern is worth reading carefully. The first code in each pair is the one that applies below the threshold and it carries the higher rate. The second is the code for wages at or above the threshold, and it is the cheaper one. So moving payroll up into the higher wage code is what lowers the cost.
How dual wage class codes actually work
A dual wage classification is one type of work described twice, at two pay levels. Take roofing. Classification 5552 covers roofing where the employee's regular hourly wage does not reach the threshold. Classification 5553 covers the identical roofing work where the wage equals or exceeds it. Same ladders, same tear off, same crew leader. The only difference is the pay rate, and the rate difference between the two codes is substantial because lower paid crews have historically generated higher claim costs on the same operations.
The critical detail is who has to prove it. The classification language is explicit that assignment of the higher wage code is subject to verification at the time of final audit, and that the payroll of an employee whose regular hourly wage is not shown to equal or exceed the threshold shall be classified in the lower wage code.
What that means The cheaper code is not the default. It is a claim you have to be able to evidence from payroll records at audit. If the records are thin, the auditor is entitled to move that payroll to the expensive code, and you pay the difference retroactively for the whole policy period.
This is the same audit mechanic that shows up in premium audits generally and it is why contractor class codes and clean payroll separation matter more in construction than in almost any other industry.
The silent reclassification nobody budgets for
Here is what makes this change different from a normal rate increase. A rate increase is visible. It shows up as a bigger number on the renewal and you argue about it. This one is invisible until the audit, because nothing on your side changes at all.
An electrician paid $38.00 an hour
Today's threshold for electrical wiring is $36. At $38 the employee is above the line, so that payroll is rated on class code 5140, the cheaper of the two.
The same electrician, the same $38.00
From September 1, 2026 the threshold is $40. The same $38 is now below the line, so the same worker on the same jobs is rated on 5190, the more expensive code, for the entire policy period.
No one gave anyone a raise or a pay cut. No one changed trade. The employer did nothing wrong. The line simply moved, and a contractor who did not notice will find out at the final audit, after the money is already spent.
The exposure is concentrated in a narrow band: anyone currently paid at or above the old threshold but below the new one. On electrical that band is $36.00 to $39.99. On carpentry and steel framing, where the jump is $41 to $46, it is five dollars wide. On the excavation, sewer and water or gas mains group it is $40.00 to $44.99.
When it actually hits you
The amended Uniform Statistical Reporting Plan is effective at 12:01 a.m. on September 1, 2026 and applies to policies incepting on or after that date. A policy already in force is not rewritten mid term. In practice:
- Renewal on or after September 1, 2026. The new thresholds apply from day one of that term. This is the group that needs to act now.
- Policy incepting before September 1, 2026. That term runs on the current thresholds and the new ones bite at the following renewal.
- Either way, the audit is the moment of truth. The threshold that matters is the one in force for the policy period being audited, and the wage has to be evidenced for that period.
Because the change is tied to policy inception, two contractors doing identical work can be on different thresholds for most of a year purely because of when their policies renew.
This is not the 2026 rate increase
These two get conflated constantly, including by people who should know better, because they share an effective date. They are separate filings with separate hearings and separate decisions.
| Dual wage thresholds | Pure premium rates | |
|---|---|---|
| What it is | Which class code your payroll falls into | The advisory benchmark rate level |
| Filing | September 1, 2026 Regulatory Filing | September 1, 2026 Pure Premium Rate Filing |
| Decision | Approved as filed on May 15, 2026 | Decided July 10, 2026: average $1.65 per $100 of payroll, up 6.6% |
| Who it hits | Only the 16 dual wage construction trades | Broadly, across roughly 500 classifications |
On the rate side the WCIRB had filed for a 10.4 percent increase and the Commissioner adopted 6.6 percent. Note that pure premium rates are advisory only. Individual carriers set their own rates, so what actually lands on your renewal depends on your carrier, your experience modification and your loss history, not on the advisory average alone.
A California contractor in one of the 16 trades can be caught by both changes in the same renewal, which is exactly why the two get blurred together.
What to check before your next renewal
- Run a payroll report by employee and hourly rate. You are looking for one thing: anyone sitting between the current threshold and the new one.
- Price the decision honestly. For a worker close to the line, the cost of raising the wage to the threshold can be less than the cost of that payroll being reclassified for a full year. It can also be more. It depends on the size of the gap and how many people are in it, so do the arithmetic rather than assuming either way.
- Check your records will survive an audit. The higher wage code has to be shown, not asserted. Regular hourly wage should be clear on the payroll record for the period.
- Do not guess at classification. Several of these pairs cover multiple detailed operations. Excavation, grading and land leveling sit under one threshold, and water mains and gas mains sit under another. Which description your crew actually falls under is a question of duties.
- Raise it at renewal, not after. Once the policy is bound on the new threshold, the reclassification is arithmetic. The time to change the input is before the term starts.
If you run crews in California in any of these 16 trades, we will map your payroll against the new thresholds and tell you where the exposure is before you renew.
Where these numbers come from
Secondary summaries of this change disagree with each other, mostly because several were written at the November 2025 committee stage and never updated. The figures on this page come from the filing and the decision themselves.
- WCIRB September 1, 2026 Regulatory Filing, submitted to the California Department of Insurance on February 26, 2026, CDI File No. REG-2026-00001. Contains the amended classification language for every pair. Read the filing (PDF, insurance.ca.gov)
- Notice of Proposed Action and Notice of Public Hearing, California Department of Insurance, March 20, 2026. Lists each threshold amendment individually. Read the notice (PDF, insurance.ca.gov)
- Insurance Commissioner's decision, May 15, 2026. All proposed amendments to the Uniform Statistical Reporting Plan were approved as filed, effective September 1, 2026. WCIRB Bulletin 2026-06
- Table of Dual Wage Classification Thresholds by Year, WCIRB, published May 28, 2026. The approved thresholds, with the five prior years for comparison. View the table (PDF, wcirb.com)
Page currency Thresholds are reviewed and amended most years, so this page states the position for policies incepting on or after September 1, 2026. Last verified against primary sources on August 8, 2026.
How we help California contractors with this
We are an independent brokerage, so we are not defending one carrier's rating decision. On this change specifically we do three things: map your current payroll against the new thresholds to find the people in the gap, sanity check that the classifications on your policy actually match the work your crews perform, and make sure the payroll records will evidence the wage if an auditor asks.
If the numbers say your current carrier is the wrong home for the reclassified payroll, we shop it across multiple California admitted carriers and issue the certificate right after binding.
Related reading: workers compensation for contractors, contractor class codes, premium audits, and SB 1455 and the 2028 workers comp requirement. Trade specific pages: roofing, plumbing, and general contractors in California.