California Contractors: New Workers’ Comp Wage Thresholds Effective September 1, 2026
Updated: 2 hours ago
California contractors need to be aware of an important Workers' Compensation change that took effect September 1, 2026.
The WCIRB increased the hourly wage thresholds used for California's dual-wage construction classifications.
For contractors, overlooking this change could result in a significant surprise at the end-of-policy Workers' Compensation audit.
What Is a Dual-Wage Classification?
Certain California construction trades have two Workers' Compensation class codes: one for employees earning below a specified hourly wage threshold and another for employees earning at or above that threshold.
The wage threshold depends on the trade.
These thresholds increased for policies effective on or after September 1, 2026.
Here are the updated thresholds:
Trade | Previous Threshold | New 9/1/26 Threshold |
Masonry | $35/hr | $37/hr |
Plumbing | $32/hr | $35/hr |
Refrigeration Equipment | $32/hr | $35/hr |
Heating or Air Conditioning Equipment | $32/hr | $35/hr |
Automatic Sprinkler Installation | $33/hr | $36/hr |
Electrical Wiring | $36/hr | $40/hr |
Concrete or Cement Work | $33/hr | $36/hr |
Carpentry | $41/hr | $46/hr |
Wallboard Installation | $41/hr | $45/hr |
Glaziers | $39/hr | $43/hr |
Painting / Wallpaper Installation | $32/hr | $36/hr |
Waterproofing | $32/hr | $36/hr |
Painting – Storage Tanks | $32/hr | $36/hr |
Plastering / Stucco | $38/hr | $42/hr |
Sheet Metal Work | $33/hr | $37/hr |
HVAC Ductwork | $33/hr | $37/hr |
Roofing | $31/hr | $33/hr |
Steel Framing | $41/hr | $46/hr |
Excavation / Grading / Land Leveling | $40/hr | $45/hr |
Sewer Construction | $40/hr | $45/hr |
Water / Gas Mains | $40/hr | $45/hr |
Why This Could Be a Big Deal for Carpentry Contractors
Carpentry is a great example.
Previously, the wage threshold was $41 per hour.
Beginning with policies effective September 1, 2026, that threshold increased to $46 per hour.
That means a carpenter earning $41 per hour who previously met the high-wage threshold would no longer meet the new $46 threshold.
If nothing changes, that employee's payroll may now fall under the applicable lower-wage carpentry classification.
And the difference between the low-wage and high-wage Workers' Compensation rates can be substantial.
Don't Wait Until Your Workers' Comp Audit
This is where contractors can get caught off guard.
Imagine your employees have historically earned $41 or $42 per hour and qualified for the high-wage carpentry classification.
Your Workers' Compensation policy renews after September 1, but payroll continues being reported or budgeted the same way.
At audit, you discover those employees didn't meet the new $46/hour threshold.
Depending on the policy, payroll, applicable rates and other rating factors, moving payroll into the applicable low-wage classification could create a significant additional premium.
For a contractor with substantial field payroll, that difference can add up quickly.
Contractors Should Review Their Payroll Now
If your company uses one of California's dual-wage construction classifications, now is a good time to review:
Your current Workers' Compensation class codes
What each field employee is actually earning per hour
Whether employees still meet the new wage threshold
Your payroll and timekeeping records
How the new classifications could affect your estimated Workers' Compensation cost
Don't assume that because an employee qualified for a high-wage classification last year, they will automatically qualify again.
A Small Wage Difference Can Have a Large Insurance Impact
Workers' Compensation isn't just about finding the lowest quoted premium.
Classification, payroll, experience modification, loss history, carrier selection and proper reporting can all have a major impact on what a contractor ultimately pays.
That's one reason working with an insurance broker who understands California construction can matter.
At Ohler Insurance Services, we work specifically with contractors and help our clients understand how changes like these may affect their insurance costs before they discover them at audit.
Not Sure How the New Thresholds Affect Your Company?
If your Workers' Compensation policy includes a dual-wage construction classification, we can review your current class codes, employee wages and insurance program with you.
Send us your current Workers' Compensation policy and payroll information, and we'll help you understand how the September 1, 2026 changes may affect your business.
This information is provided for general educational purposes and is not a guarantee of classification, premium or audit results. Workers' Compensation classifications and premiums depend on the specific facts of each business, applicable WCIRB rules and insurer underwriting.
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