If you run a barbershop, you're probably focused on building your client list, perfecting your cuts, and creating a vibe people want to come back to. Workers' compensation insurance? That's usually not at the top of your mind—until you realize you might be legally required to carry it. Here's what you need to know about workers' comp for barbershops: the requirements, the costs, and how to keep your premiums as low as possible.
Do Barbershops Need Workers' Compensation Insurance?
The short answer: it depends on whether you have employees. In most states, if you employ even one person—whether they're cutting hair, answering phones, or sweeping up—you're required to carry workers' compensation insurance. This includes part-time workers, apprentices, and in many cases, people you might think of as independent contractors.
If you're a sole proprietor running your shop solo, you're typically exempt from needing workers' comp for yourself. The same goes for business partners and LLC members without employees. But here's the catch: some states have different rules, and certain clients or landlords might require you to have coverage even if you're exempt. It's worth checking your state's specific requirements and any contractual obligations you've signed.
One area that trips up a lot of barbershop owners: booth rentals. If you rent chairs to other barbers, you might assume they're independent contractors who handle their own insurance. But many states use the "right of control" test to determine worker classification. If you control their hours, provide tools or products, or dictate how they do their work, they might legally be considered your employees—and you'd need workers' comp coverage for them.
Understanding Class Code 9586
Workers' compensation premiums are calculated based on class codes assigned by the National Council on Compensation Insurance (NCCI). These codes categorize businesses by the type of work performed and the associated injury risk. For barbershops, the relevant code is Class Code 9586, which covers barber shops, beauty shops, and hair styling salons.
This code applies to all services involving personal grooming: hair cutting, styling, coloring, shampooing, permanent waving, straightening, beard trimming, and even services like facial massage, eyebrow tweezing, and nail care. If your shop also offers tanning services, those fall under this code too. Good news: barbershops are considered very low risk. Common injuries are minor—think slip-and-fall accidents or repetitive motion issues like carpal tunnel. This low-risk classification helps keep your workers' comp rates relatively affordable compared to higher-risk industries.
There's also a separate code worth knowing about: Class Code 8810. This applies to administrative staff like receptionists, bookkeepers, or managers whose work is office-based. Because desk work carries even lower risk than cutting hair, this code comes with a much lower rate. If you have administrative employees, make sure they're classified under 8810 rather than 9586—it can save you a meaningful amount on your premium.
What Does Workers' Comp for Barbershops Cost?
In 2025, workers' compensation for barbershops costs an average of $70 per month, or about $839 per year. Another way to look at it: you'll pay roughly $0.52 per $100 of payroll, which works out to about $19 per employee per month, plus taxes and fees. Some providers, like NEXT Insurance, offer coverage for as low as $13 per month, though your actual cost will depend on several factors.
Your location matters a lot. Workers' comp rates vary significantly by state based on local regulations, medical costs, and legal environments. For example, barbers in North Carolina might pay around $12 per month, while those in New York could pay $16 per month or more. Your total annual payroll also affects cost—the more you pay your employees, the higher your premium.
The number of employees you have plays a role too. A solo barber with one assistant will pay less than a busy shop with five or six stylists. And here's where things get interesting: your claims history directly impacts your premium through something called the experience modification rate, or experience mod. If you've had previous workers' comp claims, your mod goes up, and so does your premium. A clean claims history, on the other hand, can actually lower your rate below the industry average.
How to Keep Your Workers' Comp Costs Down
The best way to control workers' comp costs is to prevent injuries in the first place. In a barbershop, that means addressing common hazards: keep floors dry and clear of clipped hair to prevent slips, ensure ergonomic workstations to reduce repetitive motion injuries, properly store chemicals and sharp tools, and provide anti-fatigue mats for barbers who stand all day.
If an injury does happen, how you handle it matters. Report claims promptly and accurately. Encourage injured employees to seek treatment quickly—early intervention often leads to faster recovery and lower claims costs. Work with your insurance carrier's case management team. And consider return-to-work programs: even light-duty work keeps employees engaged and reduces the total cost of the claim, which helps your experience mod.
Make sure your employees are classified correctly. Administrative staff should be under Class Code 8810, not 9586. And if you have booth renters who are truly independent contractors, document that relationship carefully. Keep contracts on file, ensure they control their own schedules and supplies, and consult with a local employment attorney if you're unsure about classification—misclassification can result in retroactive premiums and penalties.
Getting Coverage: What to Expect
Shopping for workers' comp is straightforward. You'll need to provide basic information: your business location, total annual payroll, number of employees, and their job duties. The insurer will assign the appropriate class codes (usually 9586 for barbers and stylists, 8810 for office staff) and calculate your premium based on your payroll and the rate for your state.
Get quotes from multiple carriers. Rates can vary, and some insurers specialize in small businesses or personal care services. Pay attention to what's included: most workers' comp policies cover medical expenses, lost wages, disability benefits, and rehabilitation costs for injured employees. Some carriers also offer safety resources and training programs that can help you prevent injuries and keep your mod low.
Most policies operate on a pay-as-you-go basis, where premiums are calculated from your actual payroll each pay period rather than estimated annually. This can help with cash flow and ensures you're not overpaying based on estimates. At the end of the policy year, the insurer will audit your payroll to make sure you paid the correct premium.
Next Steps
If you have employees, workers' compensation isn't optional—it's a legal requirement in most states, and skipping it can result in fines, penalties, or even being shut down. But beyond compliance, it's also protection for your business. If an employee gets hurt on the job, workers' comp covers their medical bills and lost wages, and it protects you from potentially devastating lawsuits.
Start by confirming your state's requirements and whether you're exempt or required to carry coverage. If you need a policy, gather your payroll information and employee details, then request quotes from multiple carriers. Review the coverage, costs, and any additional services like safety training. Once you're covered, focus on maintaining a safe workplace and managing claims effectively—that's how you keep your costs low and your team protected.
