In the United States, all businesses must have a workers’ compensation policy. However, workplace insurance is particularly critical to the food service industry. These jobs introduce many hazards, from getting burned while cooking to tripping on a dining room chair.
Understanding the basics of workers’ compensation is essential for anyone running a restaurant, whether you own a fine dining establishment or a fast food chain. Let’s uncover some lesser-known facts about worker’s comp and how restaurant owners can prevent dangers in the first place.
Workers’ Comp in the Food Service Industry
Workers’ compensation is a mandated insurance policy for the workforce. Regardless of industry, workers’ comp prevents liability claims against employers while covering workplace injuries and illnesses for employees.
On average, workers’ comp claims were about $4,474 for the food service sector in 2021. There is also a correlation between inexperienced teenage workers and injury claims in hospitality, particularly with increasing teen hires during the labor shortage. Teen claims rose from 4% to 10% from 2017 to 2021, representing 55.2% of workers’ comp-related losses.
5 Things to Know About Workers’ Comp in the Restaurant Industry
Workers’ comp is one of the most essential insurance policies restaurant owners must have when operating a restaurant. Here are five things to know about workers’ comp and how it works in everyone’s favor.
Workers’ Comp Protects Employers
In most states, restaurant owners must acquire workers’ comp insurance immediately upon hiring staff to work at their restaurant. While workers’ comp coverage clearly protects employees, it is helpful to understand how it protects employers, too.
The employers’ liability declaration in workers’ comp policies ensures employers receive protection when workers sue for injuries. Unless gross negligence is determined, employers cannot be held liable.
Of course, regardless of the outcome of a lawsuit, you could still face lawyer fees, court fees and any settlement amount — but workers’ comp helps cover these costs.
Another way workers’ comp is in the employer’s favor is by limiting the recovery amount employees can squeeze out of them. It also disallows employees from suing their co-workers.
Covers Several Injuries and Illnesses
It might seem as if workers’ comp is just another expense, but it covers expensive medical costs like emergency room visits, doctor’s appointments and surgeries.
Under workers’ comp, employees usually receive two-thirds of their ongoing lost wages for however long recovery takes. They may also be eligible for disability benefits if an injury leaves them impaired, coverage for ongoing expenses like physical therapy, and death benefits. Even if the employee is at fault for their injuries or works only part-time, workers’ comp applies to them.
Of course, some exclusions to policies apply, such as injuries occurring during commutes, if a person was intoxicated during their injury and if they got hurt during a physical workplace fight.
Employers Must Report Injuries and Illnesses
Suppose one of your cooks burns themselves during a busy shift. You may do everything correctly, including running the burn under cold water and calling for medical attention. However, you must report the injury or illness to your workers’ comp insurer immediately.
You lessen the risk of hefty fines when you report an incident right away, even if an injury isn’t compensable. Quick reporting also leads to enhanced accident investigation and prevention of fraudulent statements. Missteps could result in an injured employee lawyering up and seeking litigation.
Retaliation Is Illegal
It is illegal for restaurant owners to retaliate against employees who file a workers’ comp claim, including intimidating, threatening or firing them. Staff are entitled to coverage for their medical costs and partial wages when injured on the job.
You must also hold their position for them to return to once they receive their doctor’s approval. If you try to avoid paying your employees’ claims, you could face even steeper legal ramifications.
Premiums Determined by Industry and Payroll
On average, employers with small or mid-size businesses pay about $560 annually for workers’ comp insurance — roughly $47 per month. However, there are a few factors determining the premiums for restaurant owners.
Each state sets its own workers’ comp premiums — costs increase in industries with higher risks. For instance, restaurants are relatively unsafe — especially in the kitchen, where workers may slip, fall or get burned while using hot equipment.
The number of employees and your restaurant’s claims history will also determine how much you should prepare to pay for workers’ comp.
How to Reduce Workers’ Comp Claims at Your Restaurant
Employee coverage can be expensive, but restaurant owners are better off with workers’ comp than without. Nevertheless, you can implement several strategies to minimize the risk of injury and illness at your establishment.
An informed staff is a safe staff. Providing routine safety training to employees keeps workplace procedures fresh in their minds.
You should also examine your restaurant and look for potential dangers. Is the current dining room layout a trip hazard for employees carrying hot plates of food? Are the kitchen appliances up-to-date with the latest safety features? Hanging signs, having staff report hazards and creating safety incentives are practical steps for getting all your staff involved.
If you are unsure where to begin, hire an occupational safety consultant to visit your establishment and deliver feedback. They may notice things you haven’t considered, which could offer better protection to everyone.
Workers’ Comp Ensures a Safer Restaurant for All
As a restaurant owner, the last thing you want is for your staff to get injured on the job. Aside from potentially losing a talented team member, you’ll want to avoid litigation at all costs. Providing ongoing safety training, mitigating hazards and offering workers’ comp is the surest way to a safer restaurant.
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