Workers’ Comp Rate for Hotel and Hospitality 2024
In 2024, the average workers' comp rate for hotel and hospitality is $1.65 per $100 of payroll, equating to approximately $69 per employee each month. Workers’ comp helps protect your employees and your business by covering work-related injuries or illnesses.
What is the Workers' Comp for Hotel based on?
Your exact workers' comp premium depends on several factors, such as:
Industry Classification
Workers' comp rates vary by industry based on the level of risk involved. The National Council on Compensation Insurance (NCCI) defines every job role and assigns a four-digit class code to use as a reference for each role. Each class code also has a corresponding risk rate that reflects its risk level.
Higher-risk industries like construction tend to have higher workers' comp rates compared to lower-risk industries like office-based jobs.
Most hotel businesses are classified under class code 9052, which covers roles like housekeeping, front desk staff, bellhops, hotel landscapers, and other hotel workers. For more details, check out our Guide to Workers’ Comp Class Codes for Hotels.
Payroll
Your premium is also calculated based on your total payroll. More employees or higher wages mean a higher premium, as more workers increase the potential for accidents or injuries.
Claims History
If your business has a history of frequent claims, your premiums will be higher. On the other hand, a clean claims history may help you benefit from reduced rates over time.
Want to learn more about how your claims history impacts your workers' comp premiums? Check out our detailed guide on Experience Modification Rate (ExMod).
How to Calculate Hotel Workers' Comp Premiums
Here’s a simple formula to calculate your workers' comp premium:
Payroll divided by 100 x rate = Premium
Step 1: Calculate Your Payroll
Determine the total annual payroll for all hotel employees.
If you don't have the annual figures, calculate each employee's hourly rate multiplied by their weekly hours and the number of weeks worked in a year.
Step 2: Find your Rate
Find the workers' comp rate for your state:
- Use the national average: The workers' comp rate for hotel employees (class code 9052) is $1.65 per $100 of payroll.
- Check your existing policy for rate details.
Note: If your hotel has a restaurant, employees who work in the restaurant are classified under class code 9058 with a rate of $1.51 per $100 of payroll.
Example Calculation
Imagine you own a hotel in Louisiana with 20 employees, primarily housekeeping staff, along with a few front desk and landscaping workers. As the hotel owner, you're excluded from workers' comp coverage, but you are required to have a hotel workers’ comp policy in place to ensure that both your business and employees are properly protected.
Here’s how to calculate your premium:
1. Calculate Payroll
We need the annual payroll of each employee.
- All 20 hotel employees are making $24/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $49,920 for each.
2. Find your Workers' Comp Rates
- Your hotel falls under class code 9052 with a Louisiana rate of $1.60.
3. Apply the Formula
Add the entire payroll:
20 full-time hotel employees: 49,920 x 20 = 998,400
Apply the formula:
$998,400 (payroll) divided by 100 x $1.60 (Louisiana hotel rate) = $15,974 estimated annual workers’ comp costs
Keep in mind that this is an estimate and could vary based on additional factors like state regulations and discounts.
Annual Cost of Workers' Comp for 9052 hotels
To give you an idea of what you might pay for workers' comp insurance in different states, here’s an example of average costs per employee for a few states.
Does it matter where you buy a Policy?
Price isn’t the only factor to consider when selecting hotel workers' comp insurance. It’s just as important to evaluate the reliability of the insurance company, how efficiently they handle claims, and the quality of their customer service.
Opt for a company with a strong track record in the hotel industry, ensuring your employees receive prompt support and care in the event of a workplace injury.
What does Workers' Comp Insurance cover?
Workers' comp insurance covers a variety of work-related injuries and illnesses, including:
- Medical Expenses: Covers treatments and recovery costs for work-related injuries or illnesses
- Lost Wages: Compensates employees while they recover from an injury
- Death Benefits: Supports families if an employee dies on the job
- Lawsuit Protection: Shields your business from legal action by injured employees
Tips to lower your Workers' Comp Premium
Want to reduce your hotel workers' comp premiums?
Here are some tips:
Implement Safety Programs
Hotels have a unique challenge with workers' comp because they employ a wide range of workers. Since each job comes with different risks, it’s crucial to create a safety plan that fits the needs of all your employees.
Classify Employees Correctly
Ensure all workers are correctly classified under the right NCCI class code. Misclassifications can lead to higher premiums.
Reduce Claims
Fewer claims mean lower premiums over time, so invest in safety training and procedures to prevent injuries.
Ask About Discounts
Some insurance companies offer discounts for businesses with strong safety records or no claims history.
Find out your Hotel Workers' Comp costs
Curious about how much workers' comp insurance will cost for your hotel? Use our online tool to get a personalized quote and find out how much you could save!
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
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