A restaurant holds no contractor license, so in Arizona the owner rules carry most of the weight. A working LLC member or shareholder below 50% ownership typically counts as an employee for workers comp, one at 50% or more comes in only when the carrier agrees, by endorsement, to a written election, and an employee can reject coverage only in writing before an injury.
Three questions decide whose pay belongs on an Arizona restaurant's workers compensation policy: which owners count as employees, whether any employee has rejected coverage, and whether outside labor is treated as yours.
| Rule | What It Means for a Restaurant | Source |
|---|---|---|
| Working members and shareholders under 50% | A member or shareholder below that line who works in the kitchen or on the floor is treated as an employee. | Arizona Revised Statutes 23-901 |
| Owners at 50% or more | Deemed an employee only if the carrier accepts a written election by endorsement, at the carrier's discretion. | Arizona Revised Statutes 23-901 |
| Working partners and sole proprietors | Brought onto the policy the same way, through a written election the carrier accepts. A covered owner is assigned a wage of at least $600 a month. | Arizona Revised Statutes 23-901 |
| Employee rejection | An employee may reject coverage by written notice given before an injury. The section doesn't address owners or officers. | Arizona Revised Statutes 23-906 |
| Outside labor in your business | Contractors and their workers doing work that is part of the restaurant's business, under your supervision or control, may be treated as your employees. | Arizona Revised Statutes 23-902 |
None of these rules turns on a license. The ROC licenses contractors, so its classes touch a restaurant only when you hire one, and a remodel is typically not part of a restaurant's own trade; the contractor's side is on the Arizona tenant improvement workers comp page. Name every working owner and ownership share on the application, and settle with the carrier before the policy starts whether an owner at or above the line will be included. Arizona's other rules, side by side, are on Arizona workers comp for contractors and restaurants.
Arizona restaurants are classified in NCCI's system. Because no official Arizona list is open to the public, we leave Arizona codes off this site, and the carrier picks the classification from how the restaurant runs and what each person does. A California restaurant code has no standing on an Arizona policy. The workers comp class code lookup explains which states publish their lists.
Where Your Current Codes Are Listed
An existing Arizona policy's declarations page shows the classifications in use. We don't assign, suggest or confirm a code.
Illustrative scenario
Illustrative only. Three members own a Tempe bistro through an LLC. One holds a majority stake and runs the kitchen; the other two hold smaller stakes and manage the dining room and the bar. Under Arizona's owner rule, the two minority members who work there are treated as employees, so their pay belongs in the estimate. The majority member joins the policy only through an endorsement, if she elects it in writing and the carrier agrees. Move the bistro to Nevada and the test changes: Nevada sets no ownership percentage, and an LLC manager drawing no pay may opt out in writing to the company and its insurer.
Assuming Every Partner Stays Off the Policy
Some owners assume LLC members are off workers comp by default. In Arizona, a member who owns less than 50% and works shifts is treated as an employee. Leaving that member's pay out of the estimate can lead to an audit bill once the auditor sees who is on the schedule.
Workers comp answers for injuries to your staff. A guest who trips on a patio step, a claim tied to alcohol service or a crash in a delivery car typically belongs under liquor liability, general liability or commercial auto. The restaurant workers compensation hub compares formats across all three states, and Nevada restaurant industrial insurance shows how the neighboring state handles tips and the payroll limit.
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It depends on the share and the work. A member or shareholder who owns less than 50% and works in the restaurant is treated as an employee. At 50% or more, the partner joins the policy only by a written election that the carrier accepts through an endorsement. Working partners in a partnership come in the same way. Confirm each partner's status with the carrier.
Arizona lets an employee reject coverage, but only by written notice given before an injury, never after one. The section speaks to employees and doesn't address owners or officers. If a server raises it, ask the carrier what the server would give up, and keep the signed notice with your payroll records.
Possibly. Arizona can count a contractor's crew as your employees if you direct or control the work and it is part of running your business. Whether hood cleaning is part of running a restaurant depends on the facts of the arrangement. Collect the company's certificate before it starts.
NCCI has proposed a statewide average decrease of 0.2% for policies from January 1, 2027, and it stays a proposal until the state acts. An average across every classification doesn't say how one restaurant's premium will move; payroll, staffing format and claims matter more.
No. The ROC licenses contractors, and in any case an ROC class isn't the same thing as a workers comp classification. The restaurant's classification comes from how it operates and the carrier's determination. The ROC matters when you hire a contractor for a remodel, and that contractor carries its own coverage questions.
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Arizona restaurant workers comp, from owner elections to outside crews at audit.
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