
Workers' comp for restaurant groups and franchisees.
Workers' comp, package coverage, liquor liability, EPLI, delivery auto and umbrella for restaurant owners with several locations, shopped as one program.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
More locations, one payroll to get right
California requires every employer to carry workers' comp or be approved by the state to self-insure. With dozens or hundreds of employees across several kitchens, small mistakes in class codes or payroll add up fast.
Since September 1, 2024, California classifies each restaurant by how it serves customers. Full service, fast food or fast casual, bars and caterers each have their own code in place of the old 9079. And when the same owners hold more than half of each entity, the payroll and claims of every location combine into one experience mod.
I put your locations, payroll and claims history together, check the codes and the mod, and shop workers' comp alongside the package, liquor, EPLI, auto and umbrella coverage your franchise agreement and leases ask for.
- Workers' compMedical care and lost wages for employees hurt on the job.
- Package policyProperty and general liability for each location, often on one policy.
- Liquor liabilityClaims tied to serving alcohol.
- EPLIHarassment, discrimination and wrongful termination claims from staff.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Locations: address, concept and opening date for each.
- Ownership: the entities and who owns each one.
- Payroll: annual payroll and headcount, by location if you have it.
- Franchise agreement: the insurance section, plus lease requirements.
- Operations: alcohol sales, delivery and hours.
- History: current policies, experience mod and five years of loss runs.
Tips, meals and overtime: what counts as restaurant payroll
California comp premium is figured on payroll, and Part 3, Section V of the WCIRB Uniform Statistical Reporting Plan sets what goes into that number. Three of its rules matter more in a restaurant than almost anywhere else:
- Tips. Money guests leave or prepay as a tip stays out of comp payroll, as long as it doesn't come from you or someone paying on your behalf.
- Meals. The value of staff meals is left out unless the class wording calls for it, wages are cut to offset the meals, or the meals stand in for wages. WCIRB's payroll table keeps free meals out even when you add their value to wages for tax reporting. Meals staff buy from you through a payroll deduction go in.
- Overtime. Overtime at the regular rate is payroll. The extra above the regular rate comes out only when your payroll records break it out for each employee and total it for each type of work. At time and a half, that extra is one-third of the total overtime pay. Shift differentials for swing or graveyard work are not treated as overtime.
WCIRB also notes that comp payroll isn't necessarily the IRS definition, so a W-2 total is a starting point, not the answer. For a group, I ask for the payroll register by location with tips, meal value and overtime premium in their own columns. Outside California, payroll rules vary by state. The general list of what counts is on the workers' comp page.
Buying a location or changing partners: whose mod follows?
Section IV of WCIRB's Experience Rating Plan, the same section that combines commonly owned entities, also decides what happens when ownership changes, which is where acquisitions surprise people:
- History carries over by default. Past experience drops out only when a material change in ownership comes with a material change in either operations or employees.
- Material ownership change. Only when the owners from before the change end up holding less than half, together. A stake that goes to an immediate family member of a prior owner counts as if the prior owner kept it.
- Operations and employees. An operations change counts only if, within the first 90 days, the work and its hazard change substantially and WCIRB reclassifies it. When the whole business changes hands, an employee change counts only if most of the people doing the work in the first 90 days, and most of their payroll, come from staff who weren't doing it in the 90 days before. A different employee test applies when only part of the business changes hands. Buy a restaurant and keep the crew and the concept, and its experience stays with it.
- Splits and competing combinations. When more than one combination is possible, WCIRB uses the one with the greatest expected losses. If entities stop being combinable after an ownership change that isn't material, the combined history still follows each of them.
- Time limit. A revision under these rules generally has to come during the mod's effective period, or from a written request by you or your insurer within one year after the mod expires.
Before you close on a location, send me the deal structure and the staffing plan. More on the number itself: what an experience mod is.
Restaurant workers' comp, answered
Is workers' comp required for restaurants in California?
Yes. California Labor Code section 3700 requires every employer to be insured for workers' comp or approved by the state to self-insure. That applies even if you have only one employee.
What is the workers' comp class code for a restaurant in California?
Restaurants no longer use code 9079 on policies that start on or after September 1, 2024. It was split into new codes, including 9080 for full-service restaurants, 9083 for fast food or fast casual, 9081(1) for restaurants not described by another code and 9084 for bars that aren't restaurants. Policies that started before that date kept 9079 until they renewed.
Is fast food classified differently from a sit-down restaurant?
Yes. Code 9083 applies when customers order at a counter, drive-through, kiosk or app, pay when they order and seat themselves. Code 9080 applies to restaurants with full table service. Each separate restaurant gets its own code, so a group running both kinds can have more than one.
How does workers' comp work for a franchisee with several locations?
When the same owners hold more than 50% of each entity, California treats them as one risk with one experience mod. That holds even if each location is its own LLC or on its own policy, so claims at one store can affect the cost at all of them.
What is an experience mod for a restaurant?
It compares your claims history to employers of similar size in the same industry. Under 100% generally means better than average, and over 100% worse. If your business qualifies, the mod is mandatory and applies no matter which insurer writes the policy.
What are the most common restaurant injuries?
Burns and scalds, cuts, slips, trips and falls, and strains from lifting and repetitive work are the main restaurant hazards on federal safety lists. Non-slip floors, knife and fryer training, and a clear way to report injuries are what carriers like to see.
What insurance does a franchise agreement usually require?
Many agreements set minimum limits for general liability, workers' comp, auto and umbrella, and require the franchisor to be named as additional insured. Send me the insurance section and I'll match each line.
Are tips included in workers' comp payroll in California?
No. Under WCIRB's Uniform Statistical Reporting Plan, tips guests leave or prepay are excluded from comp payroll as long as the money doesn't come from the employer or someone paying on its behalf. Wages, bonuses and overtime at the regular rate still count.
Do you offer restaurant workers' compensation insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- WCIRB: Classification 9079(1), Restaurants or Taverns, divided into 6 new classifications (September 1, 2024)
- WCIRB: Ownership and experience rating (entities over 50% commonly owned share one experience mod)
- WCIRB: California's experience rating system
- California Labor Code §3700: every employer must secure payment of workers' compensation
- WCIRB: Payroll or Remuneration (Online Guide)
- WCIRB: California Uniform Statistical Reporting Plan, effective September 1, 2026 (PDF)
- WCIRB: California Experience Rating Plan, effective September 1, 2026 (PDF)
- 8 CCR 3396, Heat Illness Prevention in Indoor Places of Employment
- Cal/OSHA: Indoor Heat Illness Prevention
Send your locations and payroll. I'll shop it.
A location list, total payroll and your loss runs are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
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