A Restaurant Owner’s Guide to Workers’ Compensation

Common restaurant employee injuries include:

• Cuts from knife use, kitchen equipment, and damaged tableware
• Burns from hot liquids, chemicals, plates, stoves, ovens, or fryers
• Slips and falls due to wet or otherwise slippery floors
• Strains from lifting and carrying objects
• Auto accidents during delivery and catering

These injuries can leave a restaurant short-staffed, costing the owner time and, without insurance, out-of-pocket money for medical exams and treatments. This adds unwanted, unexpected and unnecessary costs to the bottom line of an already tough-to-run small business. Workers’ comp insurance for small business can help protect restaurant owners and employees from incurring these costs and provide loss control solutions to avoid accidents and promote a positive safety culture.

How Does Workers’ Compensation Work?

Owning and running a restaurant without offering workers’ compensation insurance coverage is prohibited in all states except Texas. Small business restaurant owners should familiarize themselves with state regulations where they operate regarding workers’ compensation. Regardless of the regulatory requirement, having workers’ compensation insurance is always a smart business move because it protects restaurant owners from costly liabilities. As an added benefit, restaurant owners can generally deduct their workers’ compensation on their federal taxes.

Workers’ compensation insurance covers medical expenses, physical therapy expenses and lost wages for employees who get sick or injured through the course of their work duties. Benefits can also include compensation for economic loss (past and future) and benefits payable to the dependents of workers who lose their life in the course of employment. It usually does not cover damages for pain and suffering, or punitive damages for employer negligence.

Determining the Premium

Restaurant owners contact insurance agents or workers’ compensation insurance carriers who then review the business and its location(s) to establish a premium for coverage. Premium costs will vary by business and are determined by factors including payroll, location, classification, experience rating, and rates set by the state where the business is located.

To ensure that employers are properly covered, workers’ compensation insurance carriers can use different audit types to validate and adjust premiums for restaurant policyholders. Insurance carriers can utilize several audit methods:

• Online Premium Audit – Policyholders can quickly and easily submit their premium audits online using an intuitive and user-friendly interface which guides them through the premium audit process. Additionally, policyholders can easily and securely upload all requested documents online and can check the status of their premium audits 24/7.
• Voluntary Audit – Policyholder receives a mailed audit form to complete and return through mail, e-mail, or fax. The form includes instructions, lists the required information, forms to fill out and explains our noncompliance policy. The business owner fills out the forms and returns the voluntary audit materials.
• Remote Physical Audit – Policyholder receives a letter requesting payroll records (such as 941s, state unemployment forms, and a payroll Journal). Once the business owner submits the requested documentation, a representative from the Premium Audit team will contact the policyholder to discuss payroll information and business operations.
• On-Site Physical Audit – Policyholder receives a letter to request payroll records (such as: 941s, State Unemployment Forms, and a Payroll Journal). Once the business owner submits the requested documentation, a representative from the Premium Audit team will contact the policyholder to schedule a time and date to visit the restaurant location(s) to conduct the audit.

Making the Claim

When a restaurant employee gets injured on the job, generally that worker must inform the restaurant owner and the restaurant’s workers’ compensation insurance provider about the injury and file a formal workers’ compensation claim. If the injury is serious or life-threatening, the employer should seek immediate emergency medical help for the employee. For less dire injuries, the worker should review the workers’ compensation poster displayed in the workplace by the employer which directs employees on how to file a claim and receive medical care if needed. States regulate the amount of time after an injury that the worker must seek medical attention, and if treatment must be received from an approved doctor, both of which vary by state.

Creating Safer Workplaces

Of course, it’s best to try to prevent accidents from happening. That’s why most workers’ compensation insurance providers also provide loss control services to help restaurant owners manage risk, improve the safety culture and create safer work environments through:

• Analysis to evaluate operations and make recommendations for hazard control
• Management, supervisory, and employee education programs to assist in reinforcing best health and safety practices
• Sample employee safety presentations and training

Restaurant owners should create a positive culture of safety where every employee is responsible for maintaining a safe work environment. It begins with an authentic and visible commitment from management that makes workplace safety a strategic imperative across the organization, and the willingness to invest in the business’ most important assets – its people. That includes implementing safety training programs and resources that address injury and illness prevention, protective equipment, ergonomics, and more.

For restaurants, these five strategies can help restaurant owners reduce on-the-job injuries or illnesses: 5 Strategies to Reduce Restaurant Workplace Injuries

Fostering safe restaurant working environments can help prevent worker injuries and keep restaurant owners’ workers’ compensation insurance premiums lower.