Observed Reality
Restaurants often see back premiums after audits even when headcount stays flat.
Why That Happens
Tip-heavy payroll gets reclassified into higher-rate codes, and audit corrections flow straight to premium.
Tradeoffs
More precise coding reduces volatility but requires cleaner time tracking and documentation.
Price Levers
- Class code accuracy and splits between kitchen and front-of-house.
- Payroll documentation quality at audit.
- Carrier appetite for tip-heavy operations.
Deeper context
For the longer view, see Workers Comp Audits: How Class Codes Back-Bill You and Payroll Volatility: How It Moves Workers Comp More Than You Expect.
Decision Rule
If tip credit or split codes are in play, document payroll now and challenge bad audit assumptions.
Minnesota note: claim patterns and contractor timelines vary by county, so Twin Cities experience isn’t always a perfect proxy for outstate Minnesota.