What is an Establishment?

An establishment is a single physical location where business is conducted or where services or industrial operations are performed. For activities where employees do not work at a single physical location, such as construction; transportation; communications, electric, gas and sanitary services; and similar operations, the establishment is represented by main or branch offices, terminals, stations, etc. that either supervise such activities or are the base from which personnel carry out these activities.

Can one business location include two or more establishments?

Normally, one business location has only one establishment. Under limited conditions, the employer may consider two or more separate businesses that share a single location to be separate establishments. An employer may divide one location into two or more establishments only when:

  • Each of the establishments represents a distinctly separate business;
  • Each business is engaged in a different economic activity;
  • No one industry description in the Standard Industrial Classification Manual (1987) applies to the joint activities of the establishments; and
  • Separate reports are routinely prepared for each establishment on the number of employees, their wages and salaries, sales or receipts, and other business information. For example, if an employer operates a construction company at the same location as a lumber yard, the employer may consider each business to be a separate establishment.

Can an establishment include more than one physical location?

Yes, but only under certain conditions. An employer may combine two or more physical locations into a single establishment only when:

  • The employer operates the locations as a single business operation under common management;
  • The locations are all located in close proximity to each other; and
  • The employer keeps one set of business records for the locations, such as records on the number of employees, their wages and salaries, sales or receipts, and other kinds of business information. For example, one manufacturing establishment might include the main plant, a warehouse a few blocks away, and an administrative services building across the street.

What is a NAICS code?

The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.  A NAICS code consists of six digits. The first two digits indicate economic sector. The third indicates industry subsector. The fourth refers to industry group, and the fifth refers to industry.  NAICS replaced the SIC in 1997.

Where can I find my Establishment's NAICS code?

You can find your Establishment’s NAICS code at the United State’s Census Bureau’s website.  Click here to go there now.