If you run a restaurant, you already know the job comes with risks. Hot fryers, sharp knives, wet floors, heavy lifting—your team faces these hazards every shift. What you might not realize is just how expensive workplace injuries can get. The average restaurant sees 3-4 injuries each year, costing around $45,600. That's roughly 3,000 quick-service meals or 1,300 casual-dining meals just to break even on one claim. Workers' compensation insurance isn't just a legal requirement in most states—it's financial protection that keeps a single accident from derailing your business.
Here's what surprises most restaurant owners: workers' comp costs vary wildly depending on where you operate, how you classify your employees, and your safety track record. In 2025, you're looking at an average of $1.06 per $100 of payroll, or about $54 per employee monthly. But that's just the starting point. Let's break down what actually drives your costs and how you can keep them under control.
Understanding Restaurant Class Codes
Your workers' comp premium starts with your class code—a four-digit number that tells insurers what kind of work your employees do. The National Council on Compensation Insurance (NCCI) maintains these codes, though some states have their own systems. For restaurants, the most common codes are 9082 (full-service restaurants), 9083 (fast food or limited service), and 9084 (bars and taverns where more than 50% of revenue comes from alcohol).
But here's where it gets tricky. Not every state uses the same codes. In Texas and New Jersey, all restaurants use code 9079 regardless of whether you serve alcohol or offer table service. California uses 9080 for sit-down restaurants and different codes for fast food and bars. Michigan lumps everything under 9058. New York breaks it down by alcohol percentage and service style. If you're operating in California, New Jersey, New York, Delaware, or Pennsylvania, your state has opted out of the standard NCCI system entirely.
Getting your class code wrong isn't just a paperwork error. A misclassification can cost you hundreds or thousands of dollars per year, and worse, it can leave you underinsured when a claim happens. Make sure you're classifying employees accurately based on their actual job duties, not just their titles.
What Restaurant Workers' Comp Actually Costs
In 2025, the average workers' comp rate for restaurant workers sits at $1.06 per $100 of payroll. That works out to about $28 per month for every $100 in monthly wages, or roughly $54 per employee monthly for a typical restaurant. Most restaurants pay between $1,000 and $10,000 per year for comprehensive coverage, though your actual cost depends on several factors.
Location matters enormously. The same restaurant business pays 25% more in high-cost states versus low-cost regions. Workers' comp costs range from $55 monthly in North Carolina to $73 in New York. State regulations and historical claim patterns drive these pricing differences. Every cook, server, and dishwasher on your payroll increases your workers' comp burden, with restaurant industry classifications carrying higher rates due to documented injury frequency.
Your experience modification rate (EMR) is the other big driver. Think of it as your safety report card. A restaurant with no claims might have an EMR below 1.0, which reduces premiums. Frequent claims push your EMR above 1.0, which increases costs. The premium may vary depending on your restaurant's experience modification number, specific state regulations, and any discounts provided by your insurance carrier.
The Real Risks Your Restaurant Faces
Cuts and scrapes make up 25% of all claims in the restaurant industry, making them the most frequent injury type. Slip and fall accidents run a close second. Hot stoves, ovens, fryers, and boiling liquids frequently cause burns to cooks and kitchen staff. These are the injuries you'd expect. But the ones that really hurt your bottom line are the back injuries.
Strains average $10,672 per claim. Fractures run about $22,837. But back injuries—disc damage, vertebrae problems, spinal cord issues—cost restaurant employers $60,000 to $85,000 per claim. One serious back injury from a line cook lifting a heavy pot the wrong way can wipe out months of profit. The financial impact is why prevention matters so much.
Workers' comp covers medical expenses, lost wages, and rehabilitation costs when employees get hurt on the job. It also protects you from lawsuits—in most states, accepting workers' comp benefits means employees can't sue you for the injury. Without coverage, you're personally liable for medical bills, lost wages, and legal fees. In most states, operating without workers' comp when you have employees isn't just risky—it's illegal.
How to Keep Your Premiums Down
The quickest way to reduce your workers' comp premium is implementing a safety program in your restaurant. Insurance companies are likely to give you a discount just for having documented safety procedures. But the real savings come from fewer claims. Install floor mats with drainage holes in wet areas—this single change results in a major reduction of fall-related accidents. Train staff on proper knife handling and cutting techniques. Require gloves when handling hot equipment. Teach proper lifting form for heavy pots and supply deliveries.
Shop around for coverage. Restaurant owners pay 15% below the $443 industry average for workers' comp, but rates vary significantly between carriers. Get quotes from multiple insurers and compare not just price but also their claims service reputation. When an employee gets hurt, you want an insurer that processes claims quickly and helps your worker return to work.
Classify employees correctly. Every worker should be assigned to the class code that matches their primary job duties. Don't lump everyone under one code for convenience. The accuracy matters both for pricing and for ensuring proper coverage when claims occur. Review your classifications annually as job responsibilities shift.
Getting Started with Coverage
Check your state's specific requirements first. Most states require workers' comp if you have even one employee, but a few have higher thresholds or exemptions for certain business types. Your state's department of labor or insurance website will have the current rules. Don't assume you know the requirements—they change, and penalties for operating without required coverage are severe.
Gather your payroll information for the past year, or if you're just starting out, create realistic payroll projections. You'll need to break down pay by job classification. Count how many front-of-house staff, kitchen workers, and managers you employ. This data drives your quote.
Request quotes from at least three insurers who specialize in restaurant coverage. They understand your industry's risks and often offer better rates and service than general business insurers. Ask about safety program discounts, claims management support, and how they handle the audit process at policy renewal. The cheapest premium isn't always the best value if the insurer makes claims difficult or audits aggressive.
Workers' compensation for restaurants isn't optional, but that doesn't mean you're stuck paying whatever rate insurers quote. Understand your class codes, invest in safety, keep your EMR low through claims prevention, and shop around for coverage. Your employees work hard in a demanding environment—protecting them protects your business too.
