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👷 Worker Classifications in Construction

Worker classification is one of the most error-prone areas in construction payroll — and one of the most heavily audited. On prevailing wage and union projects, paying a worker at the wrong classification rate can trigger back-pay penalties, audit findings, and even debarment.

Key Principle

Classification is based on the work performed, not the worker's title or skill level. A carpenter who spends the morning setting forms and the afternoon cleaning the site may need to be classified as a Carpenter for morning hours and a Laborer for afternoon hours. The work determines the class.


Types of Classifications

Trade Classifications

Every prevailing wage determination and union agreement lists specific trade classifications with corresponding wage rates.

ClassificationTypical Work
CarpenterFraming, formwork, finish carpentry, metal stud framing, drywall hanging
ElectricianElectrical wiring, conduit, fixtures, panels, low voltage
PlumberWater supply, waste/drain, gas piping, fixtures
PipefitterProcess piping, HVAC piping, welding
Sheet Metal WorkerDuctwork, flashing, architectural sheet metal
Ironworker (Structural)Structural steel erection, welding, bolting
Ironworker (Reinforcing)Rebar tying, placement, post-tensioning
Operating EngineerHeavy equipment operation (cranes, excavators, loaders)
LaborerGeneral labor, demolition, concrete placement, cleanup
PainterPainting, finishing, drywall taping, wallcovering
Cement MasonConcrete finishing, flatwork, patching
Bricklayer / MasonBrick, block, stone, tile
RooferRoofing systems, waterproofing
InsulatorPipe insulation, mechanical insulation, fireproofing
Elevator ConstructorElevators, escalators, lifts
GlazierGlass, curtain wall, storefronts
Tile SetterCeramic tile, stone tile, terrazzo
MillwrightMachinery installation, alignment, conveyors

Sub-Classifications (Groups)

Many trades have groups or levels within the classification:

Laborer Groups (Common Example)

GroupTypical WorkRate Relative to Group 1
Group 1General cleanup, flagging, fire watchBase rate
Group 2Concrete work, demolition, jackhammer+$1–3/hr
Group 3Hazmat, blasting, tunnel work+$3–6/hr
Group 4Specialized (asbestos, lead abatement)+$5–10/hr

Operating Engineer Groups

GroupEquipmentRate Relative to Group 1
Group 1Cranes, pile drivers, tunnel boringHighest rate
Group 2Excavators, dozers, loadersMid-high
Group 3Forklifts, compressors, small equipmentMid
Group 4Oilers, helpersLower
Know Your Groups

Using the wrong group within a classification is just as problematic as using the wrong classification entirely. An Operating Engineer running a crane at a Group 3 rate instead of Group 1 creates a significant underpayment. Verify the specific group for each piece of equipment or task.


Skill Levels

Journeyman

A journeyman (also called "journey-level" or "journey worker") is a fully qualified tradesperson who has:

  • Completed a registered apprenticeship program, OR
  • Demonstrated equivalent skill through experience and/or testing
  • Full wage rate applies

Apprentice

An apprentice is a worker enrolled in a registered apprenticeship program:

Apprentice PeriodTypical Wage (% of Journeyman)
1st period (0–1,000 hrs)40–50%
2nd period (1,001–2,000 hrs)50–55%
3rd period (2,001–3,000 hrs)55–65%
4th period (3,001–4,000 hrs)65–70%
5th period (4,001–5,000 hrs)70–75%
6th period (5,001–6,000 hrs)75–80%
7th period (6,001–7,000 hrs)80–85%
8th period (7,001–8,000 hrs)85–90%

Exact percentages and number of periods vary by trade and program.

Foreman

A foreman supervises a crew and typically earns a premium:

LevelTypical PremiumRole
ForemanBase + $2–5/hr (or 105–110%)Supervises a crew of 4–12 workers
General ForemanBase + $4–8/hr (or 110–120%)Supervises multiple foremen

On prevailing wage projects, foreman premiums may or may not be required depending on the wage determination. Some determinations list foreman rates separately; others don't.


Split Classifications

What Is a Split Classification?

When a worker performs work in multiple classifications during the same day, they may need to be paid at different rates for different hours. This is called a split classification or split rate.

When Split Classification Applies

ScenarioClassification Required
Carpenter frames all dayCarpenter — full day
Carpenter frames in AM, cleans site in PMCarpenter (AM hours) + Laborer (PM hours)
Operating Engineer runs crane in AM, drives a pickup in PMOE Group 1 (AM) + Laborer or lower group (PM)
Electrician pulls wire all day, then sweeps their area for 30 minElectrician — full day (incidental cleanup is part of the trade)

Rules for Split Classification

  1. Track hours by classification — Daily time records must show which hours were worked in which classification
  2. Pay the higher rate if you can't distinguish hours — When in doubt, the higher classification rate applies for the entire day
  3. Incidental work doesn't trigger a split — If a tradesperson does minor work outside their classification (cleaning their work area, moving their own materials), it's typically incidental and doesn't require reclassification
  4. De minimis rule — Very brief periods (under 15–30 minutes) of other-classification work may not trigger a split, but this varies by jurisdiction
California Rule

In California, if a worker performs any work in a higher-paid classification, they must be paid the higher rate for the entire day unless the employer tracks the exact hours in each classification. This makes accurate daily time tracking critical on California prevailing wage projects.


Classification on Prevailing Wage Projects

Finding the Right Classification

  1. Review the wage determination for the project (federal or state)
  2. Match the work being performed to the listed classifications
  3. If the exact work isn't listed, find the closest matching classification
  4. When in doubt, use the higher-rated classification
  5. For unusual work, request a conformance (additional classification) from the contracting agency

Conformance Requests

When the wage determination doesn't include a classification for the work being performed:

  1. Submit a conformance request to the contracting agency
  2. Propose a classification and wage rate
  3. The rate must be at least as high as the closest comparable classification
  4. The agency (or DOL for federal) approves, modifies, or denies the request
  5. Until approved, pay at the proposed rate or higher

Common Classification Mistakes

MistakeConsequence
Classifying all workers as "Laborer" to save moneyBack pay at correct rates + penalties
Using "Helper" when no helper classification exists in the determinationMust pay journeyman or apprentice rate
Not tracking split classificationsMust pay higher rate for all hours
Classifying apprentices without a registered programMust pay journeyman rate
Using out-of-date classificationsBack pay to current correct classification

Classification Audits

Who Audits?

EntityWhat They Check
Dept. of Labor (federal)Davis-Bacon compliance on federal projects
State labor agencies (DIR in CA, DOL in NY, etc.)State prevailing wage compliance
Contracting agenciesSpot checks of certified payroll
Union trust fundsClassification accuracy during trust fund audits
Prime contractorsSubcontractor certified payroll review

What Auditors Look For

  1. Daily time records — Do they show classification and hours worked?
  2. Certified payroll — Does the listed classification match the work performed?
  3. Jobsite observations — What work is the person actually doing on site?
  4. Apprentice documentation — Is the apprentice enrolled in a registered program?
  5. Group assignments — Are Operating Engineers and Laborers in the correct group?

Surviving an Audit

  • Maintain daily time records with classification noted for each worker
  • Have foremen verify classifications at the end of each day
  • Keep copies of apprentice registration cards on file
  • Document any split classification situations
  • Respond to audit requests promptly and completely
  • Self-audit before submitting certified payroll — compare work performed to classifications listed

Employee vs. Independent Contractor

A separate but related classification issue: whether workers are employees or independent contractors.

The Consequences of Misclassification

Misclassifying employees as 1099 contractorsPotential Penalty
Unpaid payroll taxes (FICA, FUTA, state)Back taxes + penalties + interest
Unpaid workers' compensation premiumsBack premiums + penalties
Unpaid overtimeBack pay + liquidated damages
Unpaid prevailing wage/fringe benefitsBack pay + penalties + possible debarment
IRS penalties100% of unpaid employee share of FICA
State penaltiesVary — California imposes $5K–$25K per violation

The Tests

Different agencies use different tests, but common factors include:

FactorEmployeeIndependent Contractor
Control over how work is doneCompany directs methodsContractor controls methods
Tools and equipmentCompany providesContractor provides own
ScheduleCompany sets scheduleContractor sets own schedule
Payment methodHourly or salaryPer project or bid
Exclusive relationshipWorks only for youWorks for multiple clients
Skill levelMay be trained by companyIndependently skilled
DurationOngoing relationshipProject-based
California AB5

California's AB5 law uses the strict "ABC test," which presumes all workers are employees unless the hiring entity proves all three conditions:

  • (A) Worker is free from control and direction
  • (B) Worker performs work outside the hiring entity's usual business
  • (C) Worker has an independently established business

This makes it very difficult to classify construction workers as independent contractors in California.


Best Practices

For Accurate Classification

  • Train foremen on classification rules — they assign work and should understand the pay implications
  • Use daily time records that capture classification per task or time period
  • Review wage determinations before each new prevailing wage project
  • Maintain apprentice registration documentation on site
  • Track Operating Engineer equipment assignments daily
  • Document split classification situations in writing
  • Self-audit certified payroll submissions monthly

For Avoiding Misclassification Issues

  • When in doubt, classify at the higher rate
  • Don't create unofficial classifications (no "Carpenter Helper" unless the wage determination includes it)
  • Don't classify skilled workers as Laborers to save money — it's the #1 audit finding
  • Keep workers performing work within their classification as much as possible
  • Request conformance for unusual classifications rather than guessing