Understanding SOC codes is crucial for businesses to categorize workers accurately and comply with state reporting requirements. The Standard Occupational Classification (SOC) system, utilized by federal agencies, assigns a unique code to every job role, helping employers collect and disseminate data for various purposes. With different levels of aggregation, such as major groups, minor groups, broad occupations, and detailed occupations, SOC codes offer a comprehensive classification of various professions. This informative guide will delve into the significance of SOC codes, their application in different states, and how they streamline the analysis of occupational data for employers and government agencies alike.

What are SOC Codes?

SOC Codes, or Standard Occupational Classification codes, are a system of categorizing and classifying all occupations in the workforce. Developed by the United States federal government, these codes are designed to fit the needs of various statistical data analysis and reporting purposes. Each SOC Code corresponds to a specific occupational category, providing a standardized language for agencies and businesses to describe job functions. The classification covers all jobs, from manual labor to scientific research positions, and is structured to reflect the current occupational landscape. By using SOC Codes, data on employment and workforce trends can be consistently collected, compared, and communicated across public and private sectors, aiding in workforce planning, economic analysis, and policymaking.

How to Decode an SOC Code

Deciphering a SOC Code is straightforward once you understand its structure. Each code is a six-digit number, with each set of digits representing a different level of detail about the occupation. The first two digits denote the major group, like ’15’ for computer and mathematical occupations. The third digit specifies the minor group, giving more detail within the major group. The fourth and fifth digits go further, pinpointing the broad occupation. The final digit identifies the specific job within the broad occupation category. For example, the code ’15-1121′ breaks down to ’15’ for computer occupations, ‘1’ for computer and information analyst roles, ’12’ for information security analysts, and ‘1’ for a more refined classification of the role. By learning to decode SOC Codes, employers and analysts can accurately identify and report job categories for various administrative and research purposes.

Detailed SOC Occupations

The most specific level within the Standard Occupational Classification system is the detailed SOC occupations. These represent individual job titles that workers might hold. When reporting data to federal agencies or analyzing workforce trends, it’s this level of detail that provides the granularity needed for precise insights. Each detailed occupation is associated with a unique six-digit SOC Code. For example, within the broad occupation of registered nurses, there’s a detailed SOC occupation for ‘Nurse Practitioners,’ with its own unique code. This granularity allows for a nuanced understanding of labor market statistics, ensuring that data reflects the true diversity of the workforce. Employers must be familiar with these detailed classifications to fulfill state reporting requirements accurately and to benefit from data-driven decision-making in their human resources and strategic planning efforts.

SOC Codes and Compliance

 

Which States Require SOC Codes?

While SOC Codes are a federal classification system, their use is also mandated by individual states for various reporting purposes. States may require businesses to use these codes when submitting employment data, particularly for unemployment insurance or workforce development programs. The list of states that require the use of SOC Codes include:

• Alaska
• Louisiana
• Washington
• South Carolina (effective March 2024)
• West Virginia (effective January 2024)

It’s vital for businesses to stay informed about their state’s regulations to ensure compliance. Companies may need to consult their state’s labor department or an HR compliance expert to understand the specific requirements and how they apply to their workforce.

How to Report SOC Codes

Reporting SOC Codes is a critical compliance task for businesses operating in states that require them. Employers should identify the correct SOC Code for each employee’s job role, which involves analyzing job descriptions and matching them to the detailed occupations in the SOC system. This information is typically reported during the new hire process and in regular employment reports to state agencies. Employers can submit SOC Code information through various means, including online labor market information systems or paper-based forms, depending on the state’s infrastructure and requirements. It’s important to report accurately to avoid penalties and to ensure that employment data contributes to a precise picture of the labor market. Businesses may benefit from using human resource management systems that can help track and report SOC Codes efficiently, reducing the burden on HR departments and ensuring ongoing compliance.

Using SOC Codes

 

Who Uses SOC Codes?

SOC Codes are employed by a wide range of entities, both within and outside of government. Federal agencies use them for statistical purposes, such as in the Bureau of Labor Statistics’ various employment surveys and to forecast employment trends. State and local governments use SOC Codes for job classification in relation to workforce development and planning. Beyond government, academic researchers and economists rely on SOC Code data to study labor markets, industry trends, and employment patterns.

In the private sector, human resource professionals use SOC Codes to benchmark compensation, analyze job functions, and align their workforce with industry standards. Job boards and career services leverage these codes to categorize positions and facilitate job matching. Overall, SOC Codes serve as a universal language for discussing work and employment, simplifying communication across different sectors and platforms.

How to Choose the Right SOC Code

Choosing the right SOC Code for an employee involves understanding the nature of their job duties and responsibilities. To start, review the job description and list primary tasks. Compare these with the definitions provided in the SOC manual, focusing on the duties rather than the job title, as titles can be misleading. It’s important to select the code that best matches the work performed, not necessarily the skills or qualifications of the individual employee.

If the job duties span more than one occupation, select the code that represents the most critical tasks of the job. In cases where it’s difficult to determine which code to use, you can seek further guidance from the SOC User Guide or contact the appropriate state agency for clarification. Accurate SOC Code assignment is important not only for compliance with state reporting requirements but also for contributing to the reliability of labor market data.

Understanding Major SOC Code Groups

Major SOC Code groups are the first level of classification in the SOC system, representing the broadest categories of occupations. There are 23 major groups, each encompassing a wide range of professions that share similar functions or skill sets. For example, the ’11’ series covers management occupations, while the ’29’ series pertains to healthcare practitioners and technical occupations.

To understand and use major groups effectively, begin by familiarizing yourself with the general structure of the workforce within your business sector. Identify which of the major groups your employees’ roles fall into. This high-level categorization is useful for big-picture analysis and comparison across industries and is commonly used in strategic planning and macroeconomic reporting. Being conversant with major SOC Code groups also facilitates more accurate reporting and can improve the quality of data used for policymaking and labor market projections.  More information is available at the Bureau of Labor Statistics website SOC home : U.S. Bureau of Labor Statistics (bls.gov).