One area that keeps many restaurant franchisees awake at night is that of on-the-job injuries and their attendant expense. In addition to the injury to the employee, there’s the specter of lost productivity and increased workers’ compensation rates, among other costs.
Increased workers’ comp rates are a valid concern, but there’s more to an effective risk management program than an insurance policy. An integrated program of affordable workers’ compensation insurance and an ongoing risk management program will stabilize, and perhaps even lower, rates and protect workers.
Workplace safety and risk management
The stakes are high, both in terms of worker safety and cost to employers. The national Occupational Safety and Health Administration (OSHA) says: “It has been estimated that employers pay almost $1 billion per week for direct workers’ compensation costs alone. The costs of workplace injuries and illnesses include direct and indirect costs. Direct costs include workers’ compensation payments, medical expenses and costs for legal services. Examples of indirect costs include training replacement employees, accident investigation and implementation of corrective measures, lost productivity, repairs of damaged equipment and property, and costs associated with lower employee morale and absenteeism.”
Particularly in a high incidence industry like restaurants, these issues cannot be ignored. The first steps to lower injury rates – and, by extension, lower workers’ compensation insurance rates – include identification and resolution of the immediate causes of frequently experienced injuries:
- Whether caused by hand chopping, machine slicing or broken dishware, these are a major cause of injury in restaurants. To avoid cuts and lacerations, knives must be kept sharp, with kitchen staff wearing cut gloves. Guards on slicing and baking machines must be on and functioning.
- Hot grease and hot surfaces are a constant hazard. To reduce their incidence train staff in wearing proper clothing in the kitchen, the best placement of utensils on burners, how to avoid steam and many other guidelines.
- Longer term and repetitive motion injuries:Including carpal tunnel syndrome and lower back pain, these develop over time and are often caused by poorly designed equipment and/or work areas, according to OSHA. Minimizing them can be accomplished through proper techniques and equipment as well as providing ways to cushion hard floors for employees who stand for long periods of time.
- Slips and falls:These may be caused by wet and slippery floors, made more dangerous by poor lighting or rushing. Solutions include slip-resistant footwear, better housekeeping, immediate cleaning of floors after spills and posting warning signs, removal of clutter and improvement of lighting.
- Improper lifting: Carrying heavy supplies or reaching for them on high shelves may lead to painful injuries, which can be avoided by training staff in proper lifting techniques.
These should all be part of a comprehensive safety program that is constantly communicated, trained, coached and reinforced, beginning with new employee orientation. Conduct periodic safety refresher sessions for all employees and encourage employees to discuss how to manage near misses and hazardous conditions.
Workers’ compensation insurance
Although restaurant owners may consider workers’ compensation insurance primarily as an expense, it’s the sole remedy for staff injuries or incidents that occur in a restaurant. Even a small restaurant owner can be liable for medical bills and lost wages if an employee is injured while working. Without the safety net provided by workers’ comp insurance, the cost of paying for an employee’s workplace injury can be devastating.
Here are a few ways to get more cost-effective coverage:
- Who should be covered:Everyone, including the owner, should be covered, or else owners won’t receive the medical and indemnity benefits the policy provides. If the restaurant had to run without the owner, it might incur significant losses.
- Level of coverage on each employee: Employees may wear a number of hats, so coverage should be specified for each applicable class code, along with the percentage of time the employee spends in each role. Misclassification can result in an unexpected audit bill.
- How rates are determined: Rates are based on such factors as the size of the operation and eligibility for discounts based on a documented safety program or drug free workplace. The most important factor, though, is the loss history and ability to qualify for an experience modifier.
- Ways to save on premiums: A combination of safety training and audits, creation of a safe work environment and enforcement of safety rules, along with a wise selection of carriers, can make a difference in premium costs.
Studies by insurance carriers indicate that an investment in proactive workplace safety processes can yield a return on investment of $6.15 for every $1 spent. Add that to lower workers’ compensation rates based on a better safety record, and that’s an investment most restaurant owners would gladly make.
Haley Crum Blanton, CSP, is Executive Vice President of FrankCrum, a national professional employer organization (PEO) and President, FrankCrum Staffing. A certified staffing professional, she earned a bachelor’s degree in Business Management at Eckerd College and is working toward a law degree at Stetson University College of Law. She is a member of the National Association of Professional Women. She can be reached at firstname.lastname@example.org.