In 2024, the average workers’ comp rate for one restaurant worker is $1.06 per $100 of payroll, or about $28 a month, plus taxes and fees. Workers' compensation insurance for restaurant workers provides coverage for work-related accidents or illnesses.
Your exact premium will depend on your state, payroll, and claims history. In the following article, we’ll explain how to figure out your premium and what you can do to get the lowest rate.
What is Workers' Comp Premium for Restaurants based on?
Workers’ comp premiums for restaurants are based on the following factors:
Your Industry
Workers’ comp insurance costs differ for each industry. It all depends on the level of risk in your type of work.
How is the level of risk for each job determined? The National Council on Compensation Insurance (NCCI) is an organization that systematically categorizes every job and its level of risk. Each job type or industry is given a 4 digit class code, like a barcode, so others can easily reference it.
The risk levels are based on how likely a worker in a particular industry is to get hurt and how bad the injury usually is. They are calculated using historical data for each state and industry.
Industries that are prone to higher instances of work-related injuries—like construction or manufacturing—tend to have higher workers' comp rates compared to those with lower risk profiles, such as office-based businesses.
In the restaurant industry, most states use three main codes (though some states like New York, Texas, Pennsylvania, and Delaware have different codes).
The class codes are:
- 9082 for restaurants with wait staff
- 9083 for fast food establishments without wait staff
- 9084 for bars or restaurants that make more than 50% of their sales from alcohol
These differences in class codes can be significant. For a more detailed explanation and other food businesses that fall in these categories, check out our restaurant workers' comp class code guide.
Your Payroll
Workers' comp premiums are calculated according to payroll. It's usually expressed as a rate per $100 of payroll. The larger the payroll, the more you pay because there is a higher potential for injury.
Your Claims History
Your claims history is another important factor in determining your workers' comp premium. If your restaurant has a history of injuries and accidents, your premiums could be higher due to increased medical expenses.
However, if you are just starting out, you won't have a claims history, and it won't be considered until you have a few years of records. If you already have a high number of claims, there are steps you can take to manage and reduce them.
How are Workers' Compensation Premiums calculated for Restaurant Employees?
Here’s a formula you can use to calculate your premium:
Payroll divided by 100 x rate = Premium
Calculate the Payroll
The Payroll refers to the total amount of money paid to your restaurant employees throughout the year. Make sure to include all your employees in your total payroll figures.
If you don’t know the annual payroll, take the hourly rate of each employee and multiply it by the hours they work per week and weeks they work per year to get the estimated annual payroll.
Divide the payroll figure by 100 to obtain the Payroll Per $100. This is how much insurance you have to pay for every $100 of payroll.
Kickstand Note:
Are restaurant tips included in workers' compensation payroll?
Many positions in the restaurant and food service industry get tips from customers. This is not considered part of payroll and the tips should not be included in the payroll figures for the purpose of calculating workers’ compensation premiums.
Find your Rate
Next, determine the industry Rate for your state.
Here are 3 ways you can find your rate:
- Use the national average for class code 9082 from one of our leading carriers, which is $1.06, as an estimate
- If you have an existing policy, check your policy in the section that breaks down the premium. Typically the first line item lists the class code, projected payroll (or remuneration) and the rate per every $100 of payroll.
- If you are restaurant code 9082, use the list below to find your rate in selected states from a leading national carrier.
9082 Restaurant Workers’ Comp Rates by State per $100 of Payroll
- Alabama: $1.67
- Arkansas: $0.49
- Connecticut: $1.03
- Florida: $1.22
- Georgia: $1.04
- Louisiana: $1.26
- Maine: $1.03
- Maryland: $0.86
- Mississippi: $1.16
- Missouri: $1.46
- North Carolina: $0.83
- Pennsylvania: $1.18
- Rhode Island: $1.53
- Tennessee: $0.70
- Texas: $0.56
- Virginia: $0.91
Let’s work through an example together:
Say you’re a restaurant owner based in Atlanta, Georgia. Your team consists of 2 full time servers, 2 part time servers for the busy hours of the night, 2 chefs in the kitchen and someone that manages your finances and purchasing full time.
This staff needs to be protected by a Restaurant Workers’ Comp Insurance policy that you as the employer pay for and provide. Let’s consult the formula and follow it to figure out your premium.
Payroll divided by 100 x rate = Premium
Step 1: Calculate Payroll
We need the annual payroll of each employee.
- The 2 full-time servers are making $13/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $27,040 for each server.
- The 2 part-time servers are making $13/hour, multiplied by 30 hours and 52 weeks for an annual payroll of $20,280 for each server.
- The 2 chefs are making $19/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $39,520 for each chef.
- The bookkeeper is making $20/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $40,642 for the bookkeeper.
Step 2: Determine Rates
Now you have to figure out which class code applies to each employee and find the corresponding rate.
- The chefs and servers are considered restaurant employees and classified as Code 9082 with Georgia’s rate of $1.04.
- The bookkeeper should be classified as a clerical-only person which is Code 8810 with Georgia’s rate of $0.09.
Step 3: Apply the Formula
Here’s how to apply the formula. You need to do it separately for each class code. Let’s do class code 9082 first.
Class Code 9082: First, add the entire 9082 payroll:
- 2 part-time servers: $20,280 x 2 = $40,560
- 2 full-time servers: $27,040 x 2 = $54,080
- 2 chefs: $39,520 x 2 = $79,040
- Total: $173,680
Apply the formula: $173,680 (payroll) divided by 100 x $1.04 (Industry rate) = $1,806
Class Code 8810: Do the same for the bookkeeper.
Apply the formula: $40,642 (payroll) divided by 100 x $.09 (Industry rate) = $37
Combine both for a total annual premium $1,806 + $37 = $1,843.
This would be in addition to taxes and fees which usually add a few hundred dollars to your premium.
Remember that the actual premium may vary depending on factors such as your restaurant's experience modification number, specific state regulations, and any discounts provided by your insurance carrier.
Annual Cost of Workers' Comp for 9082 Restaurant Workers
To get a sense of what each 9082 full time restaurant employee will cost, here is an average premium of the costs for a few states.
Estimated Workers Comp Cost for Restaurant Workers per Employee - 2024
Does it matter who I buy a Policy from?
When you're looking for workers' compensation insurance for your restaurant, it's natural to wonder if it matters where you buy a policy. The truth is, it does matter, and it's about more than just finding the cheapest option.
As a restaurant owner, you want a policy that offers the right coverage for your business. But more importantly, you also need a reliable company that will take care of your employees when they get hurt and submit a claim so they can get back on their feet and rejoin the workforce.
Some factors to consider when selecting an insurance provider are:
- Reputation: Look for a provider with a solid reputation for handling workers' comp claims efficiently. This will help ensure your employees receive the support they need in case of an injury.
- Financial Strength: It's important to choose a company with strong financial stability to ensure they have the resources to pay out claims should the need arise.
- Customer Service: Reliable customer service is crucial when dealing with insurance claims. You want a company that's responsive and helpful in case any issues arise.
- Industry Expertise: Insurance providers that have experience in the specific needs of restaurant businesses can be better equipped to provide appropriate coverage and handle claims in your industry.
What are the benefits of Workers' Comp?
Medical Expenses
If a worker suffers from a work-related injury or illness, Workers’ Comp Insurance will pay for all their medical care.
This includes surgeries, therapy and rehabilitation. It may even extend to include transportation costs to and from doctors appointments.
Lost Wages
When an employee suffers from a work-related injury or illness that prevents them from working, workers' comp not only covers their medical expenses but also compensates for their lost wages.
This means that your employees can receive income while they recover, helping them to focus on healing and eventually returning to work.
Death Benefits
In the unfortunate event that an employee passes away due to a work-related incident, workers' comp also provides death benefits for the employee's surviving family members.
This can include payment for funeral expenses and financial support for dependents, helping to lessen the financial burden that often accompanies such tragic circumstances.
Protection from Lawsuits
One of the key advantages of workers' comp is that it can shield your restaurant business from potential legal action. By providing this coverage, you're less likely to face court costs and lawsuits filed by injured employees.
How can I make Workers' Comp Cheaper?
Insurance can be expensive but don't worry, there are things you can do to save money on your Restaurant Workers' comp insurance.
Implement a Safety Program
A quick way to reduce your workers' comp premium is by implementing a safety program in your restaurant. If you tell your insurance company that you’ve implemented a safety program, they are likely to give you a discount.
Some key components of a safety program are:
- Regular safety training for employees
- Provision of personal protective equipment (PPE)
- Clear guidelines for proper handling of kitchen equipment
Ensure Class Codes are Correct
Another method to lower your workers' comp premium is ensuring your class code is correct. Errors in class codes can lead to paying higher premiums than necessary.
Check your current class code and confirm it accurately represents your restaurant's operations.
Ask about Premium Discounts
As a business owner, you can inquire about premium discounts from your insurance provider. Some companies offer credits for maintaining a safe work environment or having a strong claims history. Be proactive and ask if your restaurant is eligible for these discounts.
Work on Reducing Claims
Lowering your restaurant's claims history (experience modification rate or ExMod) is another way to reduce workers' comp rates. This is more of a long-term strategy but well worth it. By effectively managing and preventing incidents in your workplace, you can lower your ExMod and save on premium costs.
Get a Better Estimate with our Online Quoter
Do you want a more precise number for workers' comp rates for your restaurant employees? Try our easy-to-use online quoter to get a more exact estimate of what workers' comp will cost your restaurant business.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
