Under the Single Enterprise Rule, all employees engaged in activities that are "normal and usual" for an industry are covered by one classification. If a business has two or more operations that do not normally prevail in a business described by a single classification, then the Multiple Enterprises Rule may permit or require the assignment of multiple classifications to the operations. The Multiple Enterprises Rule is found in Part 3, Section III of the California Workers' Compensation Uniform Statistical Reporting Plan—1995.
Multiple Enterprises Rule Effective September 1, 2021:
If the employer’s business, conducted at one or more locations, consists of two or more distinct operations that do not normally prevail in the business described by a single classification, then the distinct operations shall be classified in accordance with the following rules:
The payroll for employees (exclusive of Miscellaneous Employees) who perform activities integral to separately classified operations shall be divided between or among the applicable classifications, provided complete and accurate payroll records are maintained pursuant to Section V, Rule 3, Division of Single Employee’s Payroll.
The payroll of Miscellaneous Employees shall be classified pursuant to 3d below.
If two or more of the distinct operations are not Physically Separated, such operations shall be assigned to the highest-rated classification applicable to the distinct operations conducted in the common workspace.
Miscellaneous Employees do not engage in operations that are integral to each classifiable operation but perform operations in general support of more than one classifiable operation and cannot properly be classified in accordance with a single classification. Examples of Miscellaneous Employees include but are not limited to supervisors, maintenance employees, power plant employees, laboratory researchers, security guards, shipping and receiving clerks, and yard employees.
Unless otherwise directed in this Plan, Miscellaneous Employees shall be assigned to the Governing Classification of the group of classifications to which their work pertains.
Multiple Enterprises Rule Prior to September 1, 2021:
Physical separation is achieved when operations are separated by permanent walls not less than eight (8) feet in height that are constructed from standard building materials or when operations are performed on separate floors or in separate buildings. Interchange of labor means employers alternate between 2 or more separately classifiable operations and engage in a single activity that is integral to two or more separately classifiable activities. There is one important thing to remember regarding the Multiple Enterprises Rule. In order to divide an employee's payroll among classifications, you must maintain payroll records that accurately record an employee's time spent working in each operation. Otherwise, all of that employee's payroll will be assigned to the highest-rated classification.
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