Legal Requirements for the Hospitality Industry
Every business is subject to a wide range of laws and regulations, though some businesses have greater legal burdens than others.
Surprisingly, some of the most stringent laws affect the hospitality industry: hotels, restaurants, nightclubs and bars. Not understanding these laws can be a costly mistake for business owners and premise operators!
Since hospitality businesses play host to visitors and guests, they are particularly vulnerable to premises liability and personal injury lawsuits. Most states have specific safety standards for public facilities.
Hotels have been held liable for guests tripping over extension cords; guests injured by paintings and mirrors falling off the walls; guests tripping over luggage left in a hallway; and guests slipping on wet floors when warnings were not posted.
Guests in lodging facilities also have certain “expectations of privacy” that the management must understand and respect.
Also, any business that prepares and serves food must understand cleanliness and food safety regulations, which can be extremely detailed. Restaurant ordinances may even regulate the temperature of water in dishwashers!
And there are additional risks when alcohol is served, including potential liability and damages for the actions of people who consume alcohol on the premises. And of course, businesses can be held liable for serving alcohol to minors, or to intoxicated people.
Hospitality businesses may also be subject to special labor laws. On the plus side, hotels and restaurants are granted more leeway in scheduling legally required breaks. However, they are responsible for establishing and managing legal tip-pooling rules, ensuring that employees are not subject to sexual harassment in the course of their duties, and making sure that underage employees are not serving alcohol.
Premise operators even need to understand copyright laws. Playing music or showing a video can be a copyright violation (and subject to heavy fines and penalties) unless the proper licenses are obtained.
Hotels, restaurants and bars may also be subject to special state and local taxes; it’s important that the business accounting system be set up to properly track (and pay) these taxes, and that employees enter receipts into the proper taxable categories.
In fact, because the business itself is ultimately liable, good training programs are required to make sure all employees understand how hospitality laws affect their jobs.
Anyone who is considering starting a hospitality business should consult with a qualified Human Resources consultant, attorney, and accountant.
But even after the business is running, it’s important to keep up with changes in the laws with , newsletters, and occasional advice from an attorney.