A Restaurant Owner's Guide to Worker's Compensation


The relaxed, comfortable atmosphere restaurant patrons enjoy in the dining room bears little resemblance to the fast-paced, often stressed-out world in the back of the house. The frenetic pace behind the scenes in the kitchen, storage areas and loading docks creates an environment where injuries can easily occur.

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.

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:

  1. Analysis to evaluate operations and make recommendations for hazard control
  2. Management, supervisory, and employee education programs to assist in reinforcing best health and safety practices
  3. 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.