Classifying Unmanned Aircraft System (Aerial Drones) Operations

The WCIRB completed a study researching the appropriate classification for operations involving Unmanned Aircraft Systems (UAS) commonly referred to as aerial drones. Such operations are becoming increasing common in California and UASs are used in a variety of industries. The Federal Aviation Administration distinguishes UASs as small or large, which is based on combined payload weight at takeoff. Small is less than 55 pounds and large is 55 pounds or more.

Based on the study results, the following classification procedures are included in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP) effective January 1, 2018:

1. Small UAS operations, other than those used in the Construction and Erection Industry Group classifications, have been designated a General Inclusion. This means that they are included in the employer’s existing classification and are not separately classified. (Learn more about General Inclusions)

2. Special Industry Classification Procedures for Construction or Erection Work have been amended to indicate that when an employer retains one or more employees in connection with its construction or erection operations as members of a crew that operates small UASs, such members of the UAS operating crew shall be classified as 8720(4), Unmanned Aircraft System Operation, provided they are engaged exclusively in such operations, or are engaged in such work for any portion of their time and devote the balance of their time to clerical office duties or outside sales. Employees who are members of a UAS operating crew and also perform or supervise construction or erection operations are classified based on the construction or erection operations they supervise or perform.

3. Classification 8720(4), Unmanned Aircraft System Operation, has been established as an alternate wording to existing Classification 8720 for the operation of small UASs on a fee basis, or in connection with the employer’s construction or erection operations. Establishing this alternate wording allows the WCIRB to monitor these emerging operations to assess whether the proposed alternate wording generates enough data to develop a statistically credible advisory pure premium rate for these operations in the future.

4. Large UAS operations have been designated a General Exclusion. This means that large UAS operations must be separately classified, just as aircraft flying crew operations are a General Exclusion and must be separately classified. (Learn more about General Exclusions)

5. Classification 7428(1), Aircraft Operation – other than agricultural, scheduled or supplemental air carriers – not members of the flying crew, and Classification 7410, Aircraft Operation – agriculture – dusting, spraying and seeding – not members of the flying crew, have been amended to include the operation of large UASs.

6. Classification 3681(1), Instrument Mfg. – electronic, has been amended to apply to the manufacture and fee-based shop repair of small UASs. Additionally, Classification 5128, Instrument – professional or scientific – installation, service or repair – away from shop, was amended to state that it applies to the fee-based repair of small UASs away from the shop.

7. Classification 3830(2), Unmanned Aircraft System Mfg., has been established as an alternate wording to Classification 3830, Airplane Mfg. – including foundry operations, for the manufacture of large UASs and the repair of large UASs by the manufacturer. Classification 3830 has historically been used for a variety of aircraft and aerospace manufacturing operations, including operations that closely resemble large UAS manufacturing operations. Establishing this alternate wording allows the WCIRB to monitor these emerging operations to assess whether the proposed alternate wording generates enough data to develop a statistically credible advisory pure premium rate in the future for the manufacture of large UASs.

8. Footnotes have been established within UAS operation and manufacturing classifications directing how large and small UAS repair operations shall be classified. The repair of large UASs on a fee basis, and repair work performed by the manufacturer away from the shop, are classified as 7428(3), Aircraft Remanufacture, Conversion, Modification and Repair Companies. Shop repair by the manufacturer is classified as 3830(2), Unmanned Aircraft System Mfg.

9. Footnotes have been established within UAS operation classes directing that employees who operate or monitor UASs from remote office locations with no exposure to other operations may qualify as Clerical Office Employees, subject to Section III, Rule 4, Standard Exceptions.

During the study, WCIRB staff had several discussions with National Council on Compensation Insurance (NCCI) staff who were reviewing the classification of drone related operations in other jurisdictions. The classification procedures that were approved in California are generally aligned with the preliminary recommendations of NCCI staff, promoting consistent classification of these operations across jurisdictions.