IMPORTANCE OF

KNOWLEDGE OF
LAWS IN THE
HOSPITALITY
INDUSTRY
• A working knowledge of laws governing the hospitality
industry isn't just a nice bonus piece of knowledge.
Employees, managers and other staff members have to
know enough about the law to avoid breaking it
because failing to follow state laws can result in fines,
lawsuits and negative publicity.
• A restaurant guest is unhappy with the quality of service
provided during his meal. He complains to the manager and
angrily demands his money back, but his meal has been
eaten.
• Is the guest legally entitled to a refund?
• A hotel guest maintains that she left money on her bedside
table and it was gone when she returned to her room after
going out for lunch.
• Is the hotel required to replace the funds?
• A resort employee is arrested by the local police for driving
under the influence of alcohol. He is employed by the hotel
as a van driver, but was not on duty at the time of the arrest.
• Should the hotel suspend his employment?
• A hotel food and beverage director is presented with a
bottle of rare and expensive wine as a Christmas gift from her
linen vendor (supplier).
• Can she legally accept the gift without threatening her
employment status?
• A food server is given a tip personally by her customer.
• Can she have the tip all by herself?
 KEEPING CUSTOMERS
SAFE
• Food safety laws play a major role in the hospitality
industry, and knowledge about how to clean and store
food can keep your customers safe and help your
business avoid lawsuits and fines. Other safety laws
include the Hotel and Motel Fire Safety Act, which
maintains a list of hotels that meet minimum fire safety
guidelines. If your hotel follows these guidelines, federal
employees can stay at your business, increasing your
customer base, and customers can rest easy knowing
that your hotel is invested in keeping them safe in the
event of a fire.
 PROTECTING YOUR
REPUTATION
• Knowledge of hospitality laws protects your business's
reputation. For example, hotels have to provide access
to disabled patrons, and if your business fails to comply,
you could face lawsuits, protests and negative
publicity. Similarly, discriminating against people on the
basis of sex, race, religion, disability status or age can
draw unwanted negative attention. Staff members
should understand what constitutes discrimination and
should be aware of their legal obligation to respect
diverse workers.
 HONORING AGREEMENTS
AND FAIR MARKETING
• Workers in the hospitality industry may be members of
unions, and some unions have specific agreements
with employers governing wages, working conditions
and benefits. Your staff needs to honor these
agreements, as well as any contracts you've signed
with customers, vendors and contractors. Similarly,
hotels must adopt fair and honest marketing practices.
Deceptive marketing is illegal. For example, if you
advertise one price, then an employee refuses to offer
that price to a patron, you could be sued for
deceptive marketing.
 PROPER RECORD-
KEEPING
• Hospitality businesses have to maintain a variety of
records, including tip sheets indicating the tips
employees receive at tip-out, employment agreements
and payroll tax paperwork. Employees who know and
understand the law can keep more accurate records
and will be less likely to throw away important
documentation. Without proper record-keeping, your
business could get into trouble with a variety of
governmental agencies, over or underpay employees
and lose important tax deductions.