Class Code 8500
Metal Scrap Dealers
Class Code 8500 covers businesses that buy, collect, sort and resell scrap metal in California — from neighborhood pickup crews to full-scale scrap yards that shear, bale and load metal for recycling. The California pure premium for this classification is $6.602 per $100 of payroll (approved Sept. 1, 2026), reflecting the relatively high frequency and severity of injury exposures in scrap operations.
What Class Code 8500 Covers
This classification applies to operations that handle, sort, process and resell scrap metal: ferrous and nonferrous metals, salvaged appliance and machinery parts, structural steel, copper wiring, aluminum and other recyclable metal commodities. It includes fixed scrap yards and processing facilities where material is inspected, separated by grade, cut or sheared, baled, stacked and loaded for shipment, as well as mobile collection crews that pick up curbside or on-site scrap for delivery to the yard. Typical equipment covered under the class includes front-end loaders, grapple trucks, hydraulic shears, balers, scrap shears, cranes with electromagnets, conveyors, forklifts and oxy-fuel or plasma cutting stations. Routine yard activities such as dismantling non-hazardous components, draining fluids from scrap vehicles, operating weigh scales and maintaining pile housekeeping are part of the classification. Office-only staff are generally not assigned to this class; payroll for clerical employees should be reported separately under the appropriate clerical class code.
Who It Applies To
- Independent scrap metal yard owners and operators
- Yard laborers who sort, bale, shear and load scrap
- Equipment operators: loaders, cranes with magnets, forklifts
- Mobile scrap collectors and local pickup drivers employed by dealers
- Facilities that dismantle and process non-hazardous metal components for resale
Common Job Duties
- Receiving, sorting and grading ferrous and nonferrous metals by type and grade
- Operating front-end loaders, grapple trucks, cranes with electromagnets and forklifts
- Cutting, shearing or baling metal using hydraulic shears, balers, oxy-fuel or plasma cutters
- Loading and securing metal onto transport trucks and trailers
- Draining and removing fluids from salvaged equipment and segregating hazardous items (batteries, refrigerants) for proper disposal
- Weighing material at scale houses, recording transactions and preparing loads for shipment
- Routine yard housekeeping: removing loose nails, stabilizing piles, and maintaining clear traffic paths
Common Injury Risks
Understanding the $6.602 Rate
The pure premium rate of $6.602 per $100 of payroll represents the expected cost of workers' compensation losses for this class before insurer expenses and profit are applied. Employers calculate the base premium by multiplying payroll (in hundreds) by the pure premium, then insurers add loadings, apply the employer's experience modification, any schedule ratings, and audit adjustments to determine the final premium. Final cost is influenced by your claims history, payroll mix (clerical vs. yard), chosen deductibles, and loss-prevention efforts.
Cal/OSHA Compliance Requirements
Cal/OSHA Title 8 General Industry Safety Orders apply across scrap operations: machine guarding and control of hazardous energy (lockout/tagout) for shears and balers, safe practices for welding, cutting and brazing, powered industrial truck operator qualification and maintenance, hazard communication for fuels, battery acids and other chemicals, confined space procedures where tanks or vaults are entered, and respiratory and hearing protection programs where dust, fumes or noise exceed limits. Documentation, training and site-specific written procedures are essential to demonstrate compliance during inspections.
How Key HR Helps Employers Under Class Code 8500
A PEO like Key HR helps metal scrap dealers reduce workers' comp costs by combining California-specific claims management, prompt injury triage, and return-to-work programs to shorten claim duration. Key HR provides safety program templates, operator training coordination, OSHA log support, payroll reporting to ensure correct classification, and experience-mod monitoring to identify opportunities for premium reduction and corrective action.
Get a QuoteFrequently Asked Questions
Does Class Code 8500 include auto dismantling and salvage operations?
Many scrap dealers dismantle vehicles for their metal content and those yard activities are commonly assigned to 8500. However, businesses that perform mechanical repairs, sell used auto parts as a primary business, or run a full-service salvage operation may fall under a different classification; classification depends on your primary operations and payroll mix, so have Key HR review your work activities for proper coding.
What practical steps most reduce workers' comp claims in a scrap yard?
Focus on machine guarding and lockout/tagout for shears and balers, certified operator training for loaders/cranes and forklifts, enforced PPE (cut-resistant gloves, face shields, hearing protection), safe cutting procedures for oxy-fuel/plasma work, tight housekeeping and traffic control to separate pedestrians and equipment, and a formal return-to-work/transitional duty program to limit lost-time exposure.
Are drivers who pick up scrap at customer sites covered under this class code?
Local collection drivers employed by a scrap dealer are generally included in Class Code 8500 when their primary duties are scrap pickup and delivery for the dealer. If drivers do long-haul interstate trucking or are contracted as common carriers, a transportation/trucking class code may apply instead. Key HR can review job duties to assign the correct classification.
Quick Facts
- Class Code
- 8500
- Classification
- Metal Scrap Dealers
- Pure Premium Rate
- $6.602 / $100 payroll
- Effective Date
- September 1, 2026
- Source
- WCIRB Approved Filing
Manage Workers' Comp Through a PEO
Key HR provides pay-as-you-go workers' comp for California employers — no large deposits, no audits, better rates.
Get a Quoteor call (800) 922-4133Ready to Simplify Workers' Comp for Class Code 8500?
Key HR provides California employers with pay-as-you-go workers' comp, HR compliance support, and payroll — all through one PEO partnership.