Construction Employment Payroll Limitation Program

The New York State Legislature enacted the Construction Employment Payroll Limitation Law to provide a more equitable distribution of workers’ compensation premium between high-wage paying and low-wage paying employers in the construction industry. The Construction Employment Payroll Limitation Program applies a maximum payroll limitation for employees in eligible construction classification codes for the purposes of determining workers’ compensation insurance premiums.

Learn more:

Construction Employment Payroll Limitation Program Overview

Eligible Classifications

Maximum Payrolls

Record Keeping Requirements

Territories & Differentials/Surcharges

NYSIF's Guide to the Construction Employment Payroll Limitation Program

Construction Employment Payroll Limitation Program Overview

The Payroll Limitation Program affects any policyholder endorsed with construction classification codes, except for work involving one- or two-family houses. The program affects premium in two ways:

• A payroll cap is applied to actual weekly payroll, per employee, in each of the eligible construction classification codes;
• The program creates three geographic rating territories used in calculating premiums and surcharges.

Actual payroll, and not the limited payroll, is used for employments engaged in the construction of one- or two-family housing (residential work). Premiums for these operations are determined based on traditional methods (total payroll, without territorial surcharges). Documentation must be provided (contracts, invoices, etc.) verifying the type of work performed.

Companies involved in both residential and commercial work are subject to the law for their commercial operations. Only construction work on one- or two-family detached or semi-detached (no more than two attached units) houses is exempt. Any construction work on apartment houses, co-operatives, three-family-or-more residences, mixed-use one- and two-family dwellings, farms and attached (three or more units in a group of connected houses) townhouses or brownstones is subject to the payroll limitation law, regardless of whether the work is done for an individual owner, a renter, the building owner, or the building manager.

Territorial differentials apply to casual labor and uninsured sub-contractors performing commercial work.

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Eligible Classification Codes for the Construction Employment Payroll Limitation Law

0042	5069	5223	5479	5610	6216	6319	9534
3365	5102	5348	5480	5648	6217	6325	9539
3724	5160	5402	5491	5651	6229	6400	9545
3726	5183	5403	5506	5703	6233	6701	9549
3737	5184	5428	5507	5709	6235	7536	9553
5000	5188	5429	5508	6003	6251	7538
5022	5190	5443	5536	6005	6252	7601
5037	5193	5445	5538	6017	6254	7855
5040	5213	5462	5545	6018	6259	8227
5057	5221	5473	5547	6045	6260	9526
5059	5222	5474	5606	6204	6306	9527

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Maximum chargeable payrolls

Weekly payroll cap amounts and effective dates are as follows:

Effective date	Weekly Payroll Cap
10/1/2000	$900 per week per employee
10/1/2001	$800 per week per employee
10/1/2002	$750 per week per employee
7/1/2008	$825 per week per employee
7/1/2009	$900 per week per employee
Thereafter	New York State average weekly wage

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Construction Employment Payroll Limitation Law Record Keeping Requirements

Detailed bookkeeping is important under the Payroll Limitation Program. Weekly payroll records must be kept showing each employee’s earnings separately. Each employee’s payroll must be separated by:

• Classification (type of work performed)
• Hours worked
• Regular pay
• Overtime pay
• Gross pay
• Residential work pay (one- or two-family homes)
• Commercial work pay (non-residential)
• Geographic location (applicable territories for non-residential work)
• Holiday, sick, vacation and bonus pay must be shown separately

Documentation such as contracts, invoices and daily work reports must serve as verification for your payroll separation.

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Territories & Differentials/Surcharges

The Payroll Limitation Program creates three geographic rating territories used in calculating premiums and applying differentials/surcharges, adjusted annually, to offset premiums lost to the limitation in each region. For new policyholders, NYSIF applies the differential/surcharge of your home territory unless you provide documentation of work in a different territory. There are three New York territories:

Territory 1 - Bronx, Kings, New York, Queens and Richmond counties;
Territory 2 - Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester counties;
Territory 3 - All other counties within the state.

For more detailed information, see NYSIF's guide to The Construction Employment Payroll Limitation Program.

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