2. 24
Legal and Ethical Considerations

3. Objectives
List the seven categories of laws that affect hospitality businesses.
Describe two ways that government regulations are enforced.
List the four areas in which liability issues arise.
List the four common law rights of guests.
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4. Objectives
Evaluate seven questions that can help you make ethical decisions.
Judge a good work ethic.
Determine guidelines that will help you have a good work ethic.

5. Laws and Regulations Laws are society’s rules for proper behavior
A regulation is a specific rule that is developed based on a law
Some laws include establishment of a government agency
Regulations are often organized into a code
An ordinance is a regulation made by a local government
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6. Laws and Regulations Laws affecting hospitality include
hiring and employment laws
worker safety laws
food safety laws
building and zoning laws
environmental protection laws
smoking ordinances
liquor laws

7. Hiring and Employment Laws
Equal opportunity laws require employers to treat everyone equally during the hiring process
Workers’ rights laws protect employees
Tax laws require the payment of income tax, Social Security tax, and unemployment tax, which are collected through payroll deductions

8. Equal Opportunity Major equal opportunity laws:
Civil Rights Act of 1964 and 1991
Age Discrimination Employment Act of 1967
Older Workers Benefit Protection Act of 1990
Immigration Reform and Control Act of 1986
Americans with Disabilities Act of 1990

9. Workers’ Rights Major workers’ rights laws:
Fair Labor Standards Act of 1938
workers’ compensation laws
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10. Taxes Major employment tax laws:
Internal Revenue Code (for federal income tax; some states and municipalities also collect income tax)
Federal Insurance Contributions Act (Social Security)
Federal Unemployment Tax Act

11. Worker Safety Laws
The main federal law is the Occupational Safety and Health Act
Many states have passed additional occupational safety and health laws

12. Food Safety Laws
The main federal law is the Food, Drug, and Cosmetic Act
The Food and Drug Administration (FDA) enforces most of the laws related to food, drugs, and cosmetics
The United States Department of Agriculture (USDA) monitors the safety of meat, poultry, and some egg products

13. Zoning and Building Laws
Zoning is the process of designating specific geographic areas for specific uses
Zoning laws list geographic areas and state the permitted uses for each area
Typically, areas are zoned for natural, residential, commercial, or industrial use
Building codes are rules and regulations designed to make buildings safe

14. Environmental Protection
The Environmental Protection Agency (EPA) is the main federal agency that makes and enforces environmental regulations
The EPA enforces the National Environmental Policy Act of 1969 and other laws that protect human health and safeguard the environment

15. Smoking Ordinances
Smoking is usually regulated by ordinances (local regulations)
The ordinances limit the places where smoking is allowed
Many smoking regulations affect hospitality businesses

16. Liquor Laws
Every state has a liquor authority or commission that regulates the sale and consumption of alcohol
The National Minimum Drinking Age Act of 1984 established a federal minimum age of 21 for buying and possessing alcohol

17. Enforcing Government Regulations
Local, state, and federal agencies and departments enforce regulations through
licenses and permits—documents that give the holder permission to do something, such as sell alcohol
inspections—formal visits to make sure regulations are being followed

18. Liability Issues
Common law, which is based on custom and precedent, allows guests certain rights such as
decent and humane treatment
no abusive or insulting treatment by employees
total use of a room
the right to be protected from personal injury
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19. Liability Issues
Liability means responsibility to pay for damages or loss
There are three areas in which liability issues arise:
guest injuries
property damage or theft
guest privacy

20. Ethical Issues
Ethics consist of principles of conduct that govern the behavior of an individual or group
Ethical behavior is doing the right thing even when under pressure to do the wrong thing
Unethical behavior is doing the wrong thing

21. Guidelines for Ethical Behavior
In business, there are eight qualities that form the basis for ethical behavior:
Honesty
Integrity
Trustworthiness
Loyalty
Fairness
Concern and respect for others
Commitment to excellence
Accountability

22. Code of Ethics
A code of ethics is a written list of rules for ethical behavior
Most businesses focus their code of ethics on customers and employees

23. Ethical Decision Making
Ask yourself these seven questions:
Is it legal?
Does it hurt anyone?
Is it fair?
Am I being honest?
Can I live with myself?
Would I publicize my decision?
What if everyone did it?

24. Ethics in Hospitality
Three reasons why the hospitality industry should be concerned with ethics:
Many unethical actions are also illegal
Most people want to act ethically
Teamwork demands integrity and honesty

25. Truth-in-Menu Laws
Many states have laws that require accuracy in menus
The FDA requires that any health claims on menus meet FDA standards

26. Sexual Harassment
Sexual harassment is unwelcome behavior of a sexual nature that creates an intimidating, hostile, or offensive work environment
It is illegal and unethical
Most businesses have written policies that specify what behavior is unacceptable
Any act of sexual harassment should be reported to the manager, who is required to investigate

27. Discrimination
Discrimination is showing prejudice in the treatment of a person because of his or her race, religion, age, national origin, or gender
Such discrimination is unethical and illegal
Most businesses have policies that prohibit discrimination

28. Technology Issues Unethical uses of technology include
using a guest’s credit card to make unauthorized charges (also illegal)
using security cameras improperly
using a company’s computer system for nonbusiness reasons

29. Work Ethic
A good work ethic is an attitude that combines hard work, good performance, and dependable results
Guidelines for a good work ethic:
Act in a professional manner
Keep your personal life private
Do not steal (including embezzlement)
Do not waste resources

30. Chapter 24 Review What is the difference between laws and regulations?
Laws are society’s rules for proper behavior. Regulations are specific rules based on law.
Equal opportunity, workers’ rights, and _____ laws affect hiring and employment.
tax
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31. Chapter 24 Review How are government regulations enforced?
through licenses, permits, and inspections
Name three areas in which liability issues arise.
guest injuries
property damage or theft
guest privacy
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32. Chapter 24 Review
Give three reasons hospitality businesses should be concerned with ethics.
Many unethical actions are also illegal. Most people want to act ethically. Teamwork demands honesty and integrity.
What is a good work ethic?
an attitude that combines hard work, good performance, and dependable results