Construction Employment Payroll Limitation Program

This program applies a maximum payroll limitation to determine workers’ compensation premium. The law does not apply to construction work involving one- or two-family houses.  For your convenience, a Payroll Limitation Worksheet is available to assist you with limiting payrolls.

Maximum Chargeable Payrolls

The maximum chargeable payroll limitation is a function of New York State’s average weekly wage and is updated on an annual basis.

EFFECTIVE DATE	WEEKLY PAYROLL CAP
7/1/2020	$1,450.17 per week per employee
7/1/2021	$1,594.57 per week per employee
7/1/2022	$1,688.19 per week per employee
7/1/2023	$1,718.15 per week per employee

Eligible Classification Codes

0042	5069	5223	5479	5610	6204	6319	9534
3365	5102	5348	5480	5648	6216	6325	9539
3724	5160	5402	5491	5651	6217	6400	9545
3726	5183	5403	5506	5701	6229	6701	9549
3737	5184	5428	5507	5703	6233	7536	9553
5000	5188	5429	5508	5709	6235	7538
5022	5190	5443	5536	6003	6251	7601
5037	5193	5445	5538	6005	6252	7855
5040	5213	5462	5545	6017	6260	8227
5057	5221	5473	5547	6018	6306	9526
5059	5222	5474	5606	6045		9527

Geographic Territories

The legislation that created the payroll limitation program also created three territories to calculate premium and apply differentials/surcharges, however no territorial differentials currently apply.

Exempt Operations

Employers engaged in the construction of one- and two-family residential housing, as well as in remodeling, repairs, and maintenance on existing one- and two-family structures (e.g., 5645) are exempt.

Recordkeeping and Audits

• Payroll records must be kept by individual employee
• Payroll records must be kept on a weekly basis for the individual employee
• Payroll records must be kept by territory for the individual employee
• Payroll records must be kept by type of work performed by the individual employee
• All contracts must be furnished at time of audit
• When using subcontractors, records must indicate the territory in which work was conducted
• Payroll must be separated between commercial and residential work. (Residential work is defined as the construction of one- and two-family residential housing, as well as remodeling, repairs, and maintenance on existing one- and two-family structures.)
• Appropriate overtime credit will be deducted prior to applying the payroll cap
• Wrap up payroll will be deducted prior to applying the payroll cap
• Payroll records must be kept for a period of four years after each entry
• New York State Department of Taxation Form # NYS–45–CC must be filed. (Insureds whose primary business is not construction will not receive this tax form.)
• Failure to maintain a proper separation of payroll will result in your paying a higher premium since payroll will be assigned to the highest-rated code and territory, and the savings for capping payroll will be lost