Government Agencies that Impact the Hospitality Industry Federal Regulatory and Administrative Agencies Hospitality Law State Regulatory and Administrative Agencies Local Regulatory and Administrative Agencies Regulatory Interaction and Oversight Impacting Government Agencies that Travel and Tourism Impact the Hospitality Managing Conflicting Regulations Industry Responding to an Inquiry Monitoring Regulatory Change Federal Regulatory andIn This Chapter, You Will Learn: Administrative Agencies1. How federal governmental agencies are involved in regulating the hospitality industry. Internal Revenue Service (IRS)2. How to analyze the various roles of state governmental Occupational Safety and Health Administration agencies that regulate the hospitality industry.3. How to identify local governmental agencies involved in (OSHA)-prevent work-related injuries, illnesses, regulating the hospitality industry. and deaths4. To recognize those national and international Environmental Protection Agency (EPA) agencies and departments charged with monitoring Food and Drug Administration (FDA) and regulating the travel industry.5. How to properly respond to an official inquiry or Equal Employment Opportunity Commission complaint from a regulatory entity. (EEOC) Bureau of Alcohol, Tobacco, and Firearms (ATF) Federal Regulatory and State Regulatory and Administrative Agencies Administrative Agencies Employment Security Agency-apply for benefits of unemployment Department of Labor (DOL) Alcohol Beverage Commission (ABC) Wage and Hours Treasury Department/Controller Pensions and Welfare Benefits Attorney General (want to know what they really do?) -serves as legal counsel to all boards and agencies of state government, issues Plant Closings and Layoffs legal opinions when requested by the Governor, heads of state agencies and other officials and agencies as provided by state Employee Polygraph Protection Act (1988)-generally statutes, sits as an ex-officio member of state committees and commissions, and defends challenges to state laws and suits against prevents employers from using lie detector tests, both state agencies and individual employees of the State. either for pre-employment screening or during the Public Health Department course of employment, with certain exemptions Department of Transportation Family and Medical Leave Act Department of Justice (DOJ)
State Regulatory and State Regulatory and Administrative Agencies Administrative Agencies Legalese: Legalese: Unemployment Compensation - A benefit paid to an employee who involuntarily Dram Shop Acts - Legislation, passed in a loses his or her employment without variety of forms and in many states, just cause. that imposes liability for the acts of Workers’ Compensation - A benefit paid to others on those who serve alcohol an employee who suffers a work- negligently, recklessly, or illegally. related injury or illness. Appears from the facts presented that Trixie’s organization was well trained and followed through on their responsibilities. Nevertheless, there are two concerns: Trixie StepsThe fact that a minor was served. The courts recognize that a server of alcohol can only do so much It appears that Trixie has contacted her attorney to prevent the use of fraudulent identification to procure alcoholic beverages for minors. Next step- Contact her insurance company This particular situation demonstrates excellent procedures that can aware of the claim, and begin to request be used to demonstrate diligence by the server to insure that statements from her employees regarding the minors are not served via fraudulent identification. It is unlikely that liability will arise due to the fact that the minor was served incident. alcohol. The other issue that will need to be defended is the decision to Finally, it might be a good idea to implement a serve three glasses of wine in 90 minutes. policy that is used by some restaurants and Most people become somewhat impaired when they consume two clubs that when a patron orders a third drink alcoholic beverages within a one to two hour period. The question would be – prior to that drink being served to them or any were the patrons demonstrating any physical signs of intoxication other drink during the evening that a manager during the time they were served? If so, and if the attorney for the must visit with them for a few minutes to injured patron can demonstrate that the alcohol played a role in the accident, then the bar may have some concerns. determine if service is still appropriate Local Regulatory and Regulatory Interaction and Oversight Administrative Agencies Impacting Travel & Tourism Health and Sanitation U.S. Government Agencies regulating the travel industry: Building and Zoning Federal Trade Commission (FTC) Courts and Garnishment Centers for Disease Control (CDC) Historical Preservation Department of Commerce (DOC) Department of the Interior (DOI) Fire Department Department of State Law Enforcement Department of Homeland Security (DHS) Tax Assessor/Collector Treasury Department Department of Transportation (DOT) Tourism Policy Council (TPC)
Analyze the Situation Analyze the Situation What is the likely cause of the man’s illness? An elderly couple from Canada, traveling in 1. 2. Based upon what you know about reasonable care for guests, what Central/South America, goes on a shopping action would you expect your management team to take relative to the man’s illness? trip to a local produce market where they buy 3. What would your position be if your hotel was later sued by the couple, claiming you had failed to warn them of local health risks? and consume some locally grown fruit. Upon This situation illustrates a very common situation that many travelers face when returning, that evening to the international visiting overseas countries. Given the information provided, the fruit would be the likely culprit, but it hotel in the area, which you manage, the would depend on other food and beverages consumed during the recent past. husband falls ill and his wife calls your front The first and main action to be expected from the hotel’s management team would be to respond with a sense of urgency; provide a list of local desk seeking assistance. physicians; and if requested, summon emergency assistance immediately; If you happen to find yourself in the situation where you are being sued on the basis of not had given warning on local health risks, you will hopefully be able to demonstrate (via documents and customary verbal information provided by staff) that caution, if necessary, was encouraged to all your guests. Cruises and Legionaires DiseaseRegulatory Interaction and Oversight Impacting Travel & Tourism Responding to an Inquiry 1. Upon notification of a complaint or violation, International Organizations document the date and time that all paperwork World Tourism Organization (WTO) was received; and be sure to check all correspondence for required deadlines. International Civil Aviation Organization 2. Assess the severity of the complaint. (ICAO) Determine if legal consultation is necessary. World Health Organization (WHO) 3. Develop a plan of action. Monitoring Regulatory Change www.HospitalityLawyer.com Hotel/Motel Management Hospitality Law Restaurant Business Hospitality Law Motel Security & Safety Management Hospitality Litigation News Hospitality Lodging and Lodging Law Business Nations Restaurant News Structures
Hospitality Business Structures In This Chapter, You Will Learn: The Importance of Business Structure 1. The importance of selecting the proper organizational and operational structures for a Common Hospitality Organizational hospitality business. Structures 2. The various organizational business structures Common Hospitality Operatiing Structures used in the hospitality industry. 3. The most common operational business The Agency Relationship structures used in the hospitality industry. 4. The responsibilities and obligations created by an agency relationship. The Importance of Business The Importance of Business Structure Structure Legalese: Ease of formation and maintenance Liability Operational Structure – The relationship Taxation between a business’s ownership and its Terminating or selling the business management Organizational Structure – The legal entity that owns a business Common Hospitality Common Hospitality Organizational Structures Organizational Structures Sole proprietorship Legalese: Sole Proprietorship -A business sole organization in which one person owns and, General partnership often, operates the business. General Partnership - A business organization in which two or more owners agree Limited Liability partnership (LLP) to share the profits of the business, but are also jointly and severally liable for its debts. Limited Liability Partnership (LLP)-In an LLP one partner is not responsible or C corporation liable for another partners misconduct or negligence. This is an important difference from that of a limited partnership. In an LLP, all partners have a form of limited S corporation liability for each individuals protection within the partnership, similar to that of the shareholders of a corporation Limited Partner -The entity in a limited partnership relationship who is liable only Limited liability company (LLC) to the extent of his or her investment. Limited partners have no right to manage the partnership. General Partner - The entity in a limited partnership relationship who makes the management decisions and can be held responsible for all debts and legal claims against the business.
Common Hospitality Common Hospitality Operating Organizational Structures StructuresLegalese: Owner-OperatorCorporation -A group of individuals granted a charter, legally recognizing them as a separate entity with rights and liabilities distinct from those of its Franchise members.S Corporation - A type of business entity that offers liability protection to its Management Contracts/License owners, and is exempt from corporate taxation on its profits (A C Corp is taxed on it’s profits). Some restrictions limit the circumstances under which Agreements it can be formed.Limited Liability Company (LLC) - A type of business organization that REIT Condo Hotels protects the owners from liability for debts incurred by the business, without the need for some of the formal incorporation requirements. The federal government does not tax the profits of LLC’s; however, some states do while others do not.Dividend - A portion of profits received by a shareholder, usually in relation to his or her ownership of a corporation. Common Hospitality Operating Common Hospitality Operating Structures Structures Legalese: Legalese: Franchise - A contract between a parent company (franchisor) and Owner-Operator – A type of operating an operating company (franchisee) to allow the franchisee to run a structure in which the owners of a business with the brand name of the parent company, as long as the terms of the contract concerning methods of operation are business are directly responsible for its followed. day-to-day operation. Also known, in Franchisee – The person or business that has purchased and/or received a franchise some cases, as an “independent.” Franchisor – The person or business that has sold and/or granted a franchiseWow! Watch this! Oh, remember it really is business and not just a sandwich! Common Hospitality Operating Common Hospitality Operating Structures Structures Legalese: Legalese: Example , ARAMARK License - Legal permission to do a certain Management Company – An entity that, thing or operate in a certain way. for a fee, assumes responsibility for the License Agreement - A legal document day-to-day operation of a business. that details the specifics of a license. Management Contract – The legal Licensor - One who grants a license. agreement that defines the responsibilities Licensee - One who is granted a license. of a business owner and the management company chosen to operate the owner’s businessThe nightmares of licenses?
Common Hospitality Operating Common Hospitality Operating Structures Structures Legalese: Legalese: Condominium – A multiple-unit complex (i.e., REIT – Short for “real estate investment hotel, apartment house, office building), the trust,” a very special form of business units of which are individually owned with each structures in which the owners of a owner receiving a recordable deed to the business are generally prohibited from individual unit purchased, including the right to operating it sell that unit, and sharing in joint ownership of all common grounds, hallways, and on-site facilities Common Hospitality Operating Common Hospitality Operating Structures Structures Legalese: Legalese: Fractional Ownership – A purchase arrangement in Condo hotel owners’ association (CHOA) – A which a condominium owner purchases the use of his or her unit for a portion (fraction) of a year. The fraction group of condo owners, elected by all of the may be defined in terms of the number of days per year condo owners in a project, to interpret, develop, (i.e., 30, 60, etc.) or very specific days and/or months and implement the policies and procedures (i.e., January 1st through March 31st for example). required to effectively manage their Individual units purchased under such an arrangement condominium complex. are commonly known as “fractionals.” The Agency Relationship Legalese: Agent - A person authorized to act for or to represent another, usually referred to as the principal. Respondeat Superior - Literally; “let the master respond,” a legal theory that holds the employer (master) responsible for the acts of the employee. Fiduciary Responsibility – The requirement that agents act in the best interests of their principals. Independent Contractor - A person or entity that contracts with another to perform a particular task, but whose work is not directed or controlled by the hiring party.