Category Archives: Management And Ownership

by | September 4, 2013 · 8:35 am

Hospitality Industry Legal Issues: Restaurants Beginning To Replace “Tipping” With Surcharges Or Higher Menu Prices In Response To “Wage Violation Lawsuits”, Cultural Changes

 “…Front-of-house workers are suing one respected restaurant after another, including Dovetail, last month, accusing them of playing fast and Hospitality Industry Wage Violation Lawsuitsloose with the laws on tips. The charges include sharing tips with workers who aren’t eligible for them and making tipped employees spend too much time on what is called sidework, like folding napkins between meals…One such lawsuit was settled for more than $5 million. Some owners now think they can avoid the suits by eliminating tips…”

“…Another change is cultural. The restaurant business can be seen as a class struggle between the groomed, pressed, articulate charmers working in the dining room and the blistered, stained and profane grunts in the kitchen. The rise of chefs that are also owners has brought a few of the grunts to power. But as the average tip has risen to 20 percent or so from 15 percent, the pay for line cooks, dishwashers and others has stayed low…”

“…The self-interest calculation (for servers) may be different now. Credit card receipts and tougher oversight have virtually killed off unreported tips…”

Sushi Yasuda joins other restaurants that have done away with tips, replacing them with either a surcharge (Atera and Chef’s Table at Brooklyn Fare in New York; Next and Alineain Chicago; Coi and Chez Panisse in the San Francisco Bay Area) or prices that include the cost of service (Per Se in New York and the French Laundry in Healdsburg, Calif.).

These restaurants are numerous enough and important enough to suggest that a tip-reform movement is under way. On the other hand, they are few enough and exceptional enough to suggest that the movement may remain very small, and move very slowly.

Americans have stuck with tipping for years because all parties thought it worked in their favor. Servers, especially in restaurants from the mid- to high-priced, made good money, much of it in cash, and much of that unreported on tax returns. Owners saved on labor costs and taxes. And customers generally believed that tips brought better service.

For more:  http://www.nytimes.com/2013/09/04/dining/leaving-a-tip-a-custom-in-need-of-changing.html?pagewanted=all&_r=0

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Filed under Employment Practices Liability, Guest Issues, Labor Issues, Liability, Management And Ownership, Risk Management

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by | September 3, 2013 · 6:26 am

Hospitality Industry Cybercrime Risks: Criminal Hackers Target Hotels Lacking “Advanced Data Security Safeguards” On Local Credit Card Transactions; “Chip-And-Pin Cards” Coming Soon

“…criminal hackers gravitate to some hotels because, like retail stores and restaurants, hotels do many credit card transactions at a local level, where centralized and highly sophisticated data security safeguards may be lacking…Most hotels are locally owned, though managed by big Cyber Risk Insurance Graphichotel chain companies. For hotel owners, it is expensive to come into full compliance with the tough global data security criteria set by the credit card companies…That includes using complex passwords, being wary of public Wi-Fi, updating antivirus software — and checking credit card statements carefully…”

“…In the United States, credit cards use magnetic strips that are more vulnerable to hacking than the electronic chips embedded in credit cards in Europe and elsewhere. Such cards also require entry of a PIN…these so-called chip-and-PIN cards are headed our way, said Kathy Orner, vice president for information security at Carlson Rezidor, a worldwide hotel company that is among the industry leaders in data security…all of the major credit card issuers plan to start introducing these cards in the United States within two or three years…”

In its 2013 Global Security Report, Trustwave, a data security management firm, says that the top three industries targeted for data breach attacks in 2012, measured by the number of its investigations, were retailing (45 percent), food and beverage (24 percent) and hotels (9 percent). Three years ago, the hotel industry was at the top, but hotels have since made “significant strides” in improving credit card security measures, the report says.

Last year, for example, the Federal Trade Commission sued Wyndham Worldwide, the hotel chain, for what it said was inadequate safeguarding of credit card information that led to three data breaches at hotels in under two years, with “millions of dollars in fraud loss, and the export of hundreds of thousands of consumers’ payment card account information to an Internet domain address registered in Russia.”

The threat is constant, Mr. Roman said. “The best protection is vigilance, and that takes work,” he said.

For more:  http://www.nytimes.com/2013/09/03/business/data-security-begins-with-the-traveler.html

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Filed under Guest Issues, Insurance, Liability, Management And Ownership, Privacy, Risk Management, Technology, Theft

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by | September 2, 2013 · 8:00 am

Hospitality Industry Employment Issues: “Becoming A Resume Lie Detector” From HospitalityLawyer.com

HospitalityLawyer Lodging and the ADA Webinar

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by | September 1, 2013 · 8:12 am

Hospitality Industry Technology Solutions: “Emergency Management Software” For Hotels Provides Fire, Police Departments With Instant Access To “Site And Floor Plans, HAZMAT Details And Utility Shut-Off Locations”

“…By installing (the Emergency Management Software), Doubletree provides Detroit’s first responders instant on-site access to site plans, floor Hotel Emergency Management Softwareplans, hazardous material details, utility shut-off locations, geographical maps, fire hydrants locations, persons with special needs, guests and residents, and other critical information.  The pre-plan data will be on a touch screen computer in the lobby as well as on the mobile data computers in Detroit’s fire department and law enforcement vehicles…”

“Our adoption of this technology is an excellent example of the private sector bracing the public works,” said Shannon Dunavent, general manager of Detroit DoubleTree by Hilton Hotel.  “This new technology will be fully implemented by September 1st, making all critical building information quickly available to first responders.  We are not only making a smart, cost-effective investment in our property and in the safety of our guests and staff, but in the city’s ability to respond to emergencies.”

CommandScope allows building and facility owners, managers and first responders alike to easily add and upload building and site data.  The information is shareable across organizations and city departments, and is updateable in real-time allowing first responders to act with knowledge rather than trial and error.  First responders can save time and lives by immediately execute emergency procedures instead of wasting time locating managers or engineers on site.

For more:  http://www.fireengineering.com/articles/2013/08/commandscope-pre-plan-technology-changing-the-nature-of-first-response.html

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by | August 31, 2013 · 8:15 am

Hospitality Industry Insurance Update: California Restaurant Employee Injured By Co-Worker’s Prank Entitled To Workers’ Compensation Only; Court Dismisses Lawsuit Against Employer

 “…The waiter received workers’ compensation benefits and sued his employer…The court explained that even if the exception extended to an workers compensation insuranceassault by a “managing representative” the waiter did not show that the lead cook was a managing representative. The lead cook did not exercise general discretionary power of direction and control over the restaurant business or even the kitchen. At most, she made decisions regarding the kitchen work in the evenings…The California Court of Appeal dismissed the suit, finding that workers’ compensation held his exclusive remedy…”

A pizza cook at a restaurant heated a pan before placing a pizza on the pan for a waiter to bring to a customer. Because the pizza pans were generally kept cool, the waiter picked up the pan with his bare hand. When he did so, he screamed and dropped the pan. He suffered serious and permanent burn injuries.

The waiter acknowledged that before his burn injury there was substantial horseplay among the restaurant employees. The employees routinely engaged in practical jokes. He claimed that after he burned his hand he saw the lead cook and other employees laughing.

The court rejected the waiter’s argument that exceptions to the exclusivity provision applied. He did not show that the employer committed a physical assault or had any involvement or knowledge of the incident or that the lead cook or pizza cook acted on the employer’s behalf.

The waiter also did not show that the employer or any managers were aware that the lead cook had any responsibility for his burn injuries or that she was involved in an assault toward him. A restaurant manager questioned employees about the incident but only learned that the pizza cook was responsible for placing the hot pan.

For more:  http://www.riskandinsurance.com/story.jsp?storyId=533354776

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by | August 30, 2013 · 1:21 am

Hospitality Industry Pool Safety: “Hotel Swimming Pool Liability Reduction Checklist” From HospitalityLawyer.com

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by | August 29, 2013 · 5:59 am

Hospitality Industry Legal Risks: Ohio Restaurant Operator Sued For “Fair Labor Standards Act” Violations And “Unjust Enrichment”; Employees Forced To “Tip Out” Managers And Others Not Regularly Receiving Tips

“…According to the lawsuit, restaurant employees weren’t allowed to keep all of their tips because they were required to “tip Hospitality Industry Wage Violation Lawsuitsout” managers and other employees who do not regularly and customarily receive tips. That resulted in employees’ being paid less than minimum wage…a tip pool can’t include managers or other workers, such as chefs or dishwashers, who don’t typically receive tips…The lawsuit requests a jury trial for five counts of Fair Labor Standard Act violations and a count of unjust enrichment. It seeks an unspecified amount in damages that (the attorney) said would ultimately prove “substantial.””

A federal lawsuit filed Monday alleges that Jeff Ruby Culinary Entertainment, which runs Jeff Ruby’s Steakhouse and Jeff Ruby’s Carlo & Johnny, forced employees to share tips with managers and other workers in violation of the Fair Labor Standards Act. The practice allegedly stopped about a year ago, but lawyers for three former employees aim to recoup losses from a two-year period beginning in 2010.

Lawyers Sarah Clay Leyshock and Kristen M. Myers – both of the law firm Beckman Weil Shepardson LLC – filed the class-action suit on behalf of the three former employees as well as anyone else who might step forward in the case. Two of the represented employees worked at Carlo & Johnny in Montgomery while the third worked at the Downtown steakhouse, Leyshock said.

“Under the Fair Labor Standard Act, employees are required to retain their own tips. The one exception is that employees can be required to share their tips in a valid tip pool,” Leyshock said. She said invalid tip pools are fairly common, but still illegal.

For more:  http://news.cincinnati.com/article/20130827/NEWS/308270075/Suit-Two-Ruby-eateries-skimmed-tips

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by | August 28, 2013 · 5:47 am

Hospitality Industry Technology Solutions: California Hotel’s Linen Inventory Loss Costs Reduced By 90% Using RFID Tags, Tracking Software

“… By using the technology the hotel has reduced the rate of missing items from 20 to 30 percent of all stock to only about 3 percent. In so doing, Hotel Linen Inventory Technology the system has paid for itself since its installation in December 2011…each tag’s ID is paired with data regarding the linen to which it is attached, including the type of linen and when it was manufactured. That information is then stored on the Linentracker server…By having a better view into specific linens’ locations—onsite, at the laundry facility or missing—the company has been able to reduce the incidence of shrinkage, as well as require less inventory in storage, since it now knows what its existing levels of linens consist of… If the hotel can reduce that quantity by about a sixth, he adds, significant savings result. Moreover, the hotel no longer need pay for laundering services for goods that were never returned…”

Mr. C opened its doors in summer 2011, with 138 rooms, a pool, a fitness center and a restaurant—all of which require linens. The hotel, owned by Italy’s Cipriani family, is the first of what the family expects to be a chain of luxury hotels under the same name, in such cities as Miami and New York. All linens are produced in Italy and are then shipped to the hotel, with a combined value of approximately $100,000.

Each tag’s ID is paired with data regarding the linen to which it is attached, including the type of linen and when it was manufactured. That information is then stored on the Linentracker server, hosted by Jaspersoft and using Fluensee software.  The specialized tags are designed for use in laundry applications. They can sustain up to 550 wash cycles with tunnel washers, the company reports, including the most challenging part of that cycle—the extractor, which creates the most pressure on tags by pressing the linens and their tags against the bottom of the washer as water is forced out of the machine.

The hotel installed three RFID readers, with two installed above the laundry chute through which all soiled linens pass, and the third mounted at the housekeeping station where the linens are received from a third-party laundry service.  When the hotel first opened, Jagger says, workers tracked the linens manually. Every item was sent to an off-site laundry facility, and the washed and folded versions were counted upon being returned. Manually counting each item, however, was an exhaustive chore, and errors could be made. In addition, he notes, there were large discrepancies between the quantity of items that the hotel management thought was still at the laundry site, and what the laundry service provider itself reported…”

For more: http://www.rfidjournal.com/articles/view?10953

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by | August 27, 2013 · 5:56 am

Hospitality Industry Technology Solutions: New Study Shows That Restaurant Employee Theft Can Be “Significantly Reduced” By Surveillance And Sales Transaction Monitoring

“…Knowing they were being monitored, the servers not only pulled back on any unethical practices, but also channeled their efforts into, say, prompting customers to have that dessert or a second beer, raising revenue for the restaurant and tips for themselves… in the restaurant Restaurant Employee Theftindustry, analysts estimate the losses from employee theft at 1 percent of revenue. That does not seem like a lot, but restaurant profit margins are slender, typically 2 to 5 percent. So cutting down on theft can be an important contributor to a restaurant’s financial health…”

And a new research paper, published on Saturday, shows in detail how significant the surveillance effect can be. The paper, “Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity,” is the work of three academics: Lamar Pierce, an associate professor at the Olin Business School at Washington University in St. Louis; Daniel Snow, an associate professor at the Marriott School at Brigham Young University; and Andrew McAfee, a research scientist at the Sloan School of Management at the Massachusetts Institute of Technology.

The researchers measured the impact of software that monitors employee-level theft and sales transactions, before and after the technology was installed, at 392 restaurants in 39 states. The restaurants were in five “casual dining” chains. The paper does not name the five,  but it cites examples of the casual dining category including Applebee’s, Chili’s and Olive Garden.

Employee theft and fraud is a big problem, estimated at up to $200 billion a year across the economy.

For more:  http://bits.blogs.nytimes.com/2013/08/26/how-surveillance-changes-behavior-a-restaurant-workers-case-study/?_r=0

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by | August 26, 2013 · 5:45 am

P3 Hospitality Industry Risk Report: “Hotel Pool Preparation, Maintenance And Checklist” By Petra Risk Solutions’ Risk Manager Joe Fisco, CLSD (Video)

[vimeo http://vimeo.com/52436189]

P3Petra Risk Solutions’ Risk Manager, Joe Fisco, CLSD , offers a P3 Hospitality Risk Update – ‘Hotel Pool Preparation, Maintenance And Checklist’.

P3 (Petra Plus Process) is the Risk Management Division of Petra Risk Solutions – America’s largest independent insurance brokerage devoted exclusively to the hospitality marketplace.

For more information on Petra and P3 visit petrarisksolutions.com or call 800.466.8951.

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