24 Legal and Ethical Considerations

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. continued

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.

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 continued

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

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

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

Workers’ Rights Major workers’ rights laws: Fair Labor Standards Act of 1938 workers’ compensation laws ©bikeriderlondon/Shutterstock.com

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

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

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

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

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

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

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

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

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 continued

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

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

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

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

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?

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

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

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

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

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

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

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 continued

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 continued

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