👷 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.
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.
| Classification | Typical Work |
|---|---|
| Carpenter | Framing, formwork, finish carpentry, metal stud framing, drywall hanging |
| Electrician | Electrical wiring, conduit, fixtures, panels, low voltage |
| Plumber | Water supply, waste/drain, gas piping, fixtures |
| Pipefitter | Process piping, HVAC piping, welding |
| Sheet Metal Worker | Ductwork, flashing, architectural sheet metal |
| Ironworker (Structural) | Structural steel erection, welding, bolting |
| Ironworker (Reinforcing) | Rebar tying, placement, post-tensioning |
| Operating Engineer | Heavy equipment operation (cranes, excavators, loaders) |
| Laborer | General labor, demolition, concrete placement, cleanup |
| Painter | Painting, finishing, drywall taping, wallcovering |
| Cement Mason | Concrete finishing, flatwork, patching |
| Bricklayer / Mason | Brick, block, stone, tile |
| Roofer | Roofing systems, waterproofing |
| Insulator | Pipe insulation, mechanical insulation, fireproofing |
| Elevator Constructor | Elevators, escalators, lifts |
| Glazier | Glass, curtain wall, storefronts |
| Tile Setter | Ceramic tile, stone tile, terrazzo |
| Millwright | Machinery installation, alignment, conveyors |
Sub-Classifications (Groups)
Many trades have groups or levels within the classification:
Laborer Groups (Common Example)
| Group | Typical Work | Rate Relative to Group 1 |
|---|---|---|
| Group 1 | General cleanup, flagging, fire watch | Base rate |
| Group 2 | Concrete work, demolition, jackhammer | +$1–3/hr |
| Group 3 | Hazmat, blasting, tunnel work | +$3–6/hr |
| Group 4 | Specialized (asbestos, lead abatement) | +$5–10/hr |
Operating Engineer Groups
| Group | Equipment | Rate Relative to Group 1 |
|---|---|---|
| Group 1 | Cranes, pile drivers, tunnel boring | Highest rate |
| Group 2 | Excavators, dozers, loaders | Mid-high |
| Group 3 | Forklifts, compressors, small equipment | Mid |
| Group 4 | Oilers, helpers | Lower |
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 Period | Typical 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:
| Level | Typical Premium | Role |
|---|---|---|
| Foreman | Base + $2–5/hr (or 105–110%) | Supervises a crew of 4–12 workers |
| General Foreman | Base + $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
| Scenario | Classification Required |
|---|---|
| Carpenter frames all day | Carpenter — full day |
| Carpenter frames in AM, cleans site in PM | Carpenter (AM hours) + Laborer (PM hours) |
| Operating Engineer runs crane in AM, drives a pickup in PM | OE Group 1 (AM) + Laborer or lower group (PM) |
| Electrician pulls wire all day, then sweeps their area for 30 min | Electrician — full day (incidental cleanup is part of the trade) |
Rules for Split Classification
- Track hours by classification — Daily time records must show which hours were worked in which classification
- Pay the higher rate if you can't distinguish hours — When in doubt, the higher classification rate applies for the entire day
- 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
- De minimis rule — Very brief periods (under 15–30 minutes) of other-classification work may not trigger a split, but this varies by jurisdiction
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
- Review the wage determination for the project (federal or state)
- Match the work being performed to the listed classifications
- If the exact work isn't listed, find the closest matching classification
- When in doubt, use the higher-rated classification
- 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:
- Submit a conformance request to the contracting agency
- Propose a classification and wage rate
- The rate must be at least as high as the closest comparable classification
- The agency (or DOL for federal) approves, modifies, or denies the request
- Until approved, pay at the proposed rate or higher
Common Classification Mistakes
| Mistake | Consequence |
|---|---|
| Classifying all workers as "Laborer" to save money | Back pay at correct rates + penalties |
| Using "Helper" when no helper classification exists in the determination | Must pay journeyman or apprentice rate |
| Not tracking split classifications | Must pay higher rate for all hours |
| Classifying apprentices without a registered program | Must pay journeyman rate |
| Using out-of-date classifications | Back pay to current correct classification |
Classification Audits
Who Audits?
| Entity | What 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 agencies | Spot checks of certified payroll |
| Union trust funds | Classification accuracy during trust fund audits |
| Prime contractors | Subcontractor certified payroll review |
What Auditors Look For
- Daily time records — Do they show classification and hours worked?
- Certified payroll — Does the listed classification match the work performed?
- Jobsite observations — What work is the person actually doing on site?
- Apprentice documentation — Is the apprentice enrolled in a registered program?
- 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 contractors | Potential Penalty |
|---|---|
| Unpaid payroll taxes (FICA, FUTA, state) | Back taxes + penalties + interest |
| Unpaid workers' compensation premiums | Back premiums + penalties |
| Unpaid overtime | Back pay + liquidated damages |
| Unpaid prevailing wage/fringe benefits | Back pay + penalties + possible debarment |
| IRS penalties | 100% of unpaid employee share of FICA |
| State penalties | Vary — California imposes $5K–$25K per violation |
The Tests
Different agencies use different tests, but common factors include:
| Factor | Employee | Independent Contractor |
|---|---|---|
| Control over how work is done | Company directs methods | Contractor controls methods |
| Tools and equipment | Company provides | Contractor provides own |
| Schedule | Company sets schedule | Contractor sets own schedule |
| Payment method | Hourly or salary | Per project or bid |
| Exclusive relationship | Works only for you | Works for multiple clients |
| Skill level | May be trained by company | Independently skilled |
| Duration | Ongoing relationship | Project-based |
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
Related Resources
- Prevailing Wage Guide — Rate determinations and compliance
- Apprenticeship Programs — Apprentice requirements and ratios
- Union Construction Guide — Union classifications and jurisdictions
- Fringe Benefits in Construction — Benefits by classification
- Overtime Rules for Construction — How classification affects overtime
- Certified Payroll Guide — Reporting classifications correctly