COVID-19 Impact on Restaurant Workers’ Comp Claims

Topics: Workers' Compensation

Summary: The past two years have been a roller coaster ride for restaurant owners and their employees. From adjusting their business models to surviving shutdowns to higher food costs and labor shortages, restaurants have been through it all. Find out how COVID-19 impacted workers’ compensation claims in the restaurant industry with findings from the AmTrust 2022 Restaurant Risk Report.

COVID-19 Impact on Restaurant Workers' Compensation Claims

The restaurant industry is still recovering from the COVID-19 pandemic while now also dealing with labor shortages and higher food costs. The National Restaurant Association forecasts the food industry will make $898 billion in sales in 2022. Total industry employment is projected to be 14.9 million, a million less than before the pandemic. Restaurant owners see staff recruitment, retention and higher food costs as their biggest challenges.

Restaurant Staff Injuries and Workers’ Compensation Claims

According to the Bureau of Labor Statistics, private industry employers, including the restaurant industry, reported 2.6 million nonfatal workplace injuries and illnesses in 2021, a 1.8% decrease from 2020. Private industry employers reported 365,200 nonfatal illnesses in 2021, down from 544,600 in 2020, a drop of 32.9%.

According to a recent report, most industries returned to or exceeded pre-pandemic workers’ compensation claim volumes in 2021, except for the food service and accommodation sectors, which reported claims lower than 2019 levels.

COVID-19 Impact on Restaurant Workers’ Comp Claims

Labor shortages and staff turnover continue to be an issue for restaurants. Newer workers are hired for the busy months to supplement the tenured staff. However, these new employees might not receive adequate training, potentially leading to more workplace injuries. Not surprisingly, the less tenured workers file the most workers’ compensation claims.

COVID-19 brought new challenges to the restaurant industry, but the traditional risks of cuts, strains, falls, burns and scrapes have not changed. In our 2022 Restaurant Risk Report, AmTrust examined over ten years of restaurant workers’ compensation claims to help employers understand the trends, including the impact of the pandemic.

Factoring in the number of active payroll employees in 2020 and 2021, reported injuries were down 25% during 2020 and remained below pre-pandemic numbers in 2021 at -5%.

Not surprisingly, our report also found that injuries were at the lowest during Q2 2020 due to COVID-19 restaurant closures. Since Q2 2021, as vaccines became more widely available and health safety restrictions were lifted, restaurants reopened to their “normal” operations, but they faced a new challenge of staffing shortages. Looking at the data, we see an increase in reported injuries because of these shortages, turnover and new hires. The 2021 data shows a similar pattern to pre-pandemic injury peaks, with higher injuries reported in the summer months and a drop-off during the winter months.

Another side effect of the COVID-19 pandemic is increased mental health issues. Mental stress claims have skyrocketed post-shutdowns, with 2021 being the highest on record.

COVID-19 Impact on the Restaurant Industry

Throughout the pandemic, tens of thousands of restaurants closed their doors permanently. Those who stayed open adjusted by switching to takeout and delivery, and when they began hosting customers onsite again, restaurant owners modified their indoor seating by removing excess tables or bar stools to allow for more space. Many also upgraded their ventilation systems to include UV filtration and created outdoor dining experiences.

Restaurant staff must focus more on continuous cleaning and sanitizing in the dining and kitchen areas. Standard restaurant safety tips should be followed to protect restaurant employees. As the roles and responsibilities of the staff shift to focus on different options, such as delivery services, it’s essential to ensure that everyone is trained in the latest safety protocols.

Motor Vehicle Delivery Safety for Deliveries

Restaurants that switched to offering delivery services during the COVID-19 shutdowns faced an entirely new and different risk and found they needed to focus on making sure delivery drivers follow safe driving requirements. Restaurants should develop a safe driving policy requiring their drivers to take safety training before being allowed to make deliveries. Restaurant management should review Motor Vehicle Records (MVRs) for all drivers, especially in cases where other staff members cover for drivers during peak times.

Before COVID-19, the impact of motor vehicle accidents was already a growing concern as motor vehicle accidents account for some of the more costly workers’ compensation claims for restaurant classes. Today, the claims costs for accidents involving delivery services continue to climb.

AmTrust Helps Our Restaurant Insureds

Protecting a restaurant’s most valuable asset – its employees – is of utmost importance. Promoting restaurant workplace safety to help reduce employee injuries and expensive claims is one way to help keep your staff healthy and productive and keep your workers’ compensation premiums down. For a more in-depth look at the latest workers’ compensation claims data for the restaurant industry, download a copy of the AmTrust 2022 Restaurant Risk Report.

AmTrust is an industry leader in workers’ compensation insurance for small to mid-sized businesses. Our coverage, combined with our comprehensive workplace safety training resources, can help protect your restaurant from risk. For more information about our small business insurance solutions, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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