Been there, done it all, and can really identify with your situation.
On one hand, could it be worse? Yup, ever work in a Union shop?
Look, my neighbor has a chihuahua, damn thing yaps every time the nieghbor's fridge starts up, or the mailman farts halfway across the street.
I have threee options: One is to ignore the dog, two is to get rid of the dog, or three is to move out of the neighborhood.
There have always been S.o.s's (sacks of, uh..shaving cream) in the workforce and there will always be s.o.s.'s in the labour force. Can't avoid them.
4 years ago I gave up and sold a succesfull catering business mainly becasue of the reasons you listed above. Over here, everybody knows the labour codes and worker's comp codes and try to milk as much as they can. I almost brained one "delivery driver" when he claimed he wanted to file a claim for a "skin rash" It was the imprint of the stacking plastic bread trays (which we used to transport party trays and platters) on his fore-arm. He figured it was his right to milk me and the system, and I figured it was poloroid time, took a picture and asked him to come back for another photo 15 minutes later. He took off and left me before the imprint faded. If I had had another cup of coffee that day I would, in all likely hood, beat him over the head with the said bread tray. So I guess everything worked out O.K.
So, I guess you could say I had a "Paradigim shift" after that incident. I am a cook, and will live and die as a cook, and have no other options (or want to) work in any other trade or business.Still have a few more miles on the odometer before I go to the junkyard, so I sold the whole schpeil, had a holiday, and started up again.
But his time I am relying only on me, myself, and I--and my wife/partner of 15 years. No other employees other than my kids from time to time. I have managed to attract several culinary schools, and have 2 week work experiences with thier students. This is mainly 1 on 1, they learn a lot, and I can relax as I don't have to pay them, nag them, or worry about labour codes, Workers comp codes, or showing up drunk/stoned. Two weeks is perfect, if they work out, I get some good work out of them, if they stink, I don't loose much. I still get Christmas cards from some of them.
My business now is basically a Mom & Pop. Don't earn as much as I used to, don't have nearly as many headaches as I used to.
Probably one of the best decisions I ever made.