If you run a salon or spa, you're focused on making clients look and feel their best. But here's something that deserves equal attention: protecting your team. Workers' compensation insurance isn't just a legal checkbox—it's financial protection for both you and your employees when workplace injuries happen. Whether you're running a single-chair hair salon or a full-service spa with massage therapists and estheticians, understanding workers' comp can save you from costly surprises down the road.
Do You Actually Need Workers' Comp for Your Salon?
The short answer: if you have employees, yes. Almost every state requires workers' compensation coverage once you hire your first employee—even if they're just working part-time. Only Texas and South Dakota give salon owners the option to skip coverage, but even in those states, most business owners choose to carry it anyway.
Here's where it gets specific: requirements vary by state. New York requires coverage with just one part-time worker. Florida lets you hire up to four people before mandating coverage. New Jersey draws the line at one employee. The penalties for skipping coverage are serious—steep fines and possible business closure.
Now, if you're a solo stylist or esthetician without employees, you're typically not required to carry workers' comp. But there's a catch: many commercial landlords and some clients require proof of coverage before they'll work with you. It's worth considering even if it's not mandatory.
One important note: workers' comp doesn't cover independent contractors. If you rent booth space to stylists who run their own businesses, they need their own coverage. Your policy only protects employees on your payroll.
Understanding Class Codes and How They Affect Your Rate
When you apply for workers' comp, your insurer assigns your business a classification code that determines your base rate. For most salons and spas, this is NCCI class code 9586. This code covers hair cutting and styling, manicures, pedicures, facials, tanning, hair removal, tattoos, and piercing services.
If your spa offers additional wellness amenities like saunas, steam baths, hydrotherapy, or mud baths, you might fall under code 9054 instead. And if you're operating a medical spa that provides Botox, laser treatments, or other medical-grade procedures, you could be classified under code 8832, which typically carries higher premiums because of increased liability.
Some states use their own classification systems instead of NCCI codes. For example, Pennsylvania and Delaware use code 0977 for hair and beauty salons. Your insurance agent will know which codes apply in your state.
The good news? Salons are considered low-risk businesses. Injuries do happen—slip-and-falls on wet floors, repetitive motion issues from hours of cutting and styling, occasional chemical exposure—but these are typically minor compared to construction or manufacturing injuries. That's why salon rates are relatively affordable.
What Workers' Comp Actually Costs for Salons
In 2025, the average workers' comp rate for salons is about $0.52 per $100 of payroll. If you're paying an employee $3,000 per month, that works out to roughly $19 monthly for their coverage. Not bad, right? For a small salon with three employees, you're looking at about $50-60 per month.
But here's where it gets interesting: that's just the starting point. Several factors can push your actual premium higher or lower. Your location matters—rates can range from $0.75 to $2.74 per $100 of payroll depending on your state. Your total payroll obviously impacts the final number. And your claims history plays a huge role.
This is where the experience modification rate, or EMR, comes into play. After you've been in business for about four years, insurers calculate your EMR based on your claims history compared to similar businesses. A brand new salon starts with an EMR of 1.0. If you maintain a clean safety record with few or no claims, your EMR can drop to around 0.94, lowering your premium. But if you have frequent claims, your EMR can climb to 1.6, making your insurance significantly more expensive.
Think of your EMR as a report card for workplace safety. It's one of the most controllable factors in your workers' comp costs. Keep your team safe, address hazards proactively, and your premiums can actually decrease over time.
Common Injuries in Salons and How to Prevent Them
Let's talk about what actually happens in salon injuries. The most common? Slip-and-fall accidents. Water, hair products, and tile floors are a recipe for falls. Simple prevention goes a long way: anti-slip mats, quick cleanup of spills, and proper footwear for staff.
Repetitive motion injuries are another big one. Stylists, nail techs, and massage therapists spend hours doing the same movements. Carpal tunnel syndrome, tendinitis, and lower back pain are occupational hazards. Ergonomic chairs, anti-fatigue mats, and encouraging breaks can help reduce these injuries.
Chemical exposure is less common but still a concern. Hair dyes, bleach, nail products, and cleaning solutions can cause skin irritation or respiratory issues. Proper ventilation, gloves, and training on safe handling make a difference.
The bottom line? A few safety measures can prevent most salon injuries. And fewer injuries mean lower workers' comp premiums down the line.
Getting Started with Workers' Comp Coverage
Shopping for workers' comp doesn't have to be complicated. Start by gathering your payroll information—you'll need to know how much you're paying each employee and what their job duties are. This helps insurers classify your business accurately.
Get quotes from multiple insurers or work with an independent agent who can shop around for you. Rates can vary significantly between carriers, even for the same coverage. Ask about discounts—some insurers offer lower rates for businesses with safety programs or those that pay annually instead of monthly.
Once you're covered, make sure your employees know what to do if they get hurt. Post the required notices in your break room. Have a clear process for reporting injuries immediately. Quick reporting helps injured workers get medical care faster and can actually help control your claims costs.
Workers' compensation protects your business and your team. It covers medical bills, lost wages, and rehabilitation costs when employees get hurt on the job. Without it, you're personally liable for those expenses—and they can add up fast. A single serious injury could cost tens of thousands of dollars out of pocket. For about $20 per employee per month, workers' comp is one of the smartest investments you can make in your salon or spa business.
