Small Business Exemption Employment Laws
It is important to understand that both federal and state laws apply to restaurants and lodging establishments. For smaller businesses, which are defined differently under federal employment laws (e.g., generally employers with under $500,000 in gross annual sales under wage and hour laws; or employers with less than 15 employees under nondiscrimination laws, etc.), generally only state laws apply. This is called the small business exemption. However, any person who works on or otherwise handles goods that are moving in interstate commerce is individually subject to the minimum wage and overtime protection of the FLSA. For example, a waitress or cashier who handles a credit card transaction would likely be subject to the Act.
In most cases, when two laws apply, the one most beneficial to the employee is the one to follow. Therefore, with the exception of certain areas (e.g., pension benefits), even if an establishment falls under federal guidelines, the state law should be followed in most cases if it benefits the employee more. Throughout this publication we will give information on both state and federal laws.
Americans with Disabilities Act and ADA Amendments Act Employment Laws
Title I of the Americans with Disabilities Act of 1990 ("ADA"), which was amended by the ADA Amendments Act of 2008 ("Amendments Act"), makes it unlawful to discriminate in employment against a qualified individual with a disability. The ADA applies to an employer who is "engaged in an industry affecting commerce who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year," including part time and temporary employees. The term "qualified individual" means an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position" at issue. A "disability" is defined under the ADA as:
• A physical or mental impairment or any mental or psychological disorder, condition or disfigurement that substantially limits an individual in one or more major life activities (the Amendments Act greatly expanded the type of activity that may be considered a major life activity);
• A record of having such an impairment; or
• Being regarded as having such impairment.
Under the ADA, employers are required to make a "reasonable accommodation" to the needs of a qualified individual with a disability, unless this poses an "undue hardship."
Employers struggle with the ADA in a number of ways. First, there are questions about what constitutes the "essential functions" of the job. Second, the term "disability" includes a wide range of physical, mental, and emotional conditions that affect a "major life activity," as noted above. Not all disabled individuals have readily recognized impairments, such as paralysis or blindness. Pursuant to the Amendments Act, the new ADA instructs courts and employers to adopt a broad standard when determining whether an individual is considered disabled. Also, the new ADA requires employers to ignore mitigating measures, such as medications, prosthetics, mobility devices, etc., when considering whether an employee or prospective employee is sufficiently disabled to receive ADA protection.
Third, employers often have a difficult time determining what constitutes “reasonable accommodation” to assist a disabled employee to perform her job. In general, an accommodation is any change in the work environment or in the way things are usually done that enables an individual with a disability to enjoy equal employment opportunities and benefits. For example, while prep cooks tend to work on their feet, it might be considered reasonable accommodation to set up a work station that allows someone with a circulatory disorder in her legs to be seated for a large percentage of her shifts.
Finally, employers wonder about the limits of the ADA’s “undue hardship” provision, which takes into account the burden placed on the employer in accommodating a disabled individual. The employer’s obligation to accommodate a disabled person within reason does not require changes or modifications that would impose an “undue hardship,” which means an action requiring “significant difficulty or expense,” or which would require the fundamental alteration of the business. Among the factors considered in determining whether an undue hardship exists is the cost of the accommodation, the effect on the business’s resources, and the size and type of business.
A detailed job description, outlining all essential functions and requirements of the job, is an important first step to avoiding complicated or uncomfortable hiring decisions. If the applicant honestly must be able to lift 50 pounds, be available on weekends, or possess a valid driver’s license, such should be clearly stated in the employment job description. It may be valuable for an attorney to review your policies and procedures related to the disabled employees and job candidates in light of the Amendments Act.
The ADA permits employers to maintain substance abuse policies and to conduct testing for illegal drug use. Alcohol is not listed as one of the drugs that can be tested for under the law. The ADA protects alcoholics from discrimination, and an employer may not refuse to hire an individual with a disability (such as alcoholism), unless the reason for rejection is justified by business necessity. Current drug abusers, unlike alcoholics, are not protected by the ADA. There are, however, some protections provided to persons who have successfully rehabilitated or are participating in rehabilitation programs and are no longer engaging in drug use. That said, employers may apply and enforce restrictive policy relating to alcohol use in the workplace to employees who are alcoholic, of course, as long as they apply evenly to all employees.
The Equal Employment Opportunities Commission (“EEOC”) is responsible for enforcing the ADA employment rules, and issued new regulations in 2011 interpreting the expansion of the law under the ADA Amendments Act of 2008. There are significant financial penalties for violations. There also are tax credits available for hiring certain workers with disabilities. For more information, contact the EEOC at 1801 L St. NW, Washington, DC 20507; call 800-669-3362 or 202-663-4691; or visit www.ada.gov or www.eeoc.gov. A helpful overview of disability discrimination law is available on the EEOC website at http://www.eeoc.gov/laws/types/disability.cfm
Breaks and Rest Periods Employment Laws
Neither federal law nor North Carolina law require mandatory rest breaks or meal breaks for employees 16 years old or older. It is entirely up to an employer to set his or her own rules concerning employee breaks during working hours, as well as to determine whether employees are permitted to smoke on the premises. Generally, if an employer does give breaks, the break must be at least 30 minutes for the employer to be able to deduct time from an employee’s pay. Breaks of less than 30 minutes, such as a 15 minute rest break, have to be paid by the employer.
An employer does not have to let his or her employees leave the premises even if the employee is completely relieved of duty during the 30 minute break. The employer is not required to provide a break room.
Child Labor Laws Employment Laws
You may employ minors (those under age 18) as part of your business, but in doing so, you are subject to strict federal and state child labor laws designed to protect the health, safety and well being of minors in the workforce. Federal child labor laws are enforced by the U.S. Department of Labor. The Department may assess a penalty of $11,000 for each employee found to be the subject of a violation. Willful child labor violators also may face criminal prosecution. Under current law, a second conviction may result in imprisonment. Employers should insist upon reliable documentation of the age of anyone who might be a minor.
Minors between the ages of 14 and 15 may work in any non-agricultural occupation not deemed hazardous by the Secretary of Labor or detrimental by the Commissioner of Labor and that does not interfere with their schooling, health or well-being. Permitted and prohibited occupations are listed in the state’s "Child Labor in Non-Agricultural Occupations in North Carolina" fact sheet here.
Kitchen work and work involved in preparing and serving food and beverages is permitted, as is cleaning vegetables and fruits, wrapping, sealing, labeling, weighing, pricing or stocking goods when performed in areas separate from work in freezers and meat coolers. Minors 14 or 15 years old may not engage in setting up, adjusting, cleaning or repairing power food slicers, grinders, choppers, cutters or bakery mixers or work in freezers or meat coolers. Fourteen and 15 year olds may be employed in food preparation, but they may not perform any baking activities and may only perform cooking that involves the use of (1) electric or gas grills that do not entail cooking over an open flame, and (2) deep fat fryers that are equipped with and utilize devices that automatically lower and raise the baskets into and out of the oil or grease.
Minors between the ages of 14 and 15 may be employed:
• Outside of school hours;
• Not more than three hours a day on school days;
• Not more than eight hours a day on non-school days;
• Not more than 18 hours in any school week;
• Not more than 40 hours in any non-school week; and
• Only between the hours of 7 a.m. and 7 p.m. except from June 1 through Labor Day, during which time their work may end no later than 9 p.m.
Minors who are 16, but have not yet turned 18 are permitted to work in any non-agricultural occupation that the Secretary of Labor has not deemed hazardous or the Commissioner of Labor has not deemed detrimental. There are no federal limits on the number of hours that a minor over the age of 16 may work, but there are limits under state law (see below). Work that has been deemed hazardous includes operation of power driven bakery machines, meat grinders and meat slicers. Hazardous and detrimental occupations for all youths under 18 are listed in the state’s “Child Labor in Non-Agricultural Occupations in North Carolina” fact sheet.
North Carolina’s regulations are substantially similar to the above federal laws. One major difference is that during the school year, no one under age 18 who is enrolled in school in grade 12 or lower may be employed between 11 p.m. and 5 a.m. when there is school the next day. This restriction does not apply to 16 or 17 year olds if the employer receives written permission from the youths’ parent or guardian and school principal, or if the youth has dropped out of school even if they are attending a community college for their GED.
North Carolina laws state only that no youth under the age of 16 may be employed for more than five consecutive hours without a 30 minute rest period. The North Carolina law on breaks for those under 16 generally applies only to enterprises that have gross sales or receipts of less than $500,000 a year and to private non-profit organizations.
North Carolina law also requires that youths under age 18 may only be employed after obtaining a youth employment certificate unless specifically exempted. The state Commissioner of Labor prescribes regulations for youths and employers concerning the issuance, maintenance and revocation of certificates. While county directors of social services and their designees may issue certificates directly, the preferred method is to issue the certificates electronically through the North Carolina Department of Labor’s website at www.nclabor.com. On that page, in the “Quick Clicks” column click on “Youth Work Permit.” For more information about obtaining a youth employment certificate go to the state Department of Labor website at www.nclabor.com or call the Wage and Hour Bureau at either 919-807-2796 (Raleigh) or (NC only) at 800-NCLABOR (625-2267).
The N.C. Department of Labor’s regulations covering youth employment are substantially similar to federal law except for the regulation of establishments that hold an on-premises Alcoholic Beverage Commission (“ABC”) permit, which federal child labor laws do not regulate. The North Carolina regulations state that no establishment that holds an ABC permit for the consumption of alcohol on-premises may employ a youth under age 16 for any purpose, unless the youth is at least 14 years old and the following conditions are met:
• The person obtains the written consent of a parent or guardian of the youth; and
• The youth is employed to work on the outside grounds of the premises for a purpose that does not involve the preparation, serving, dispensing or sale of alcoholic beverages.
Such establishments also may not employ a youth under age 18 to prepare, serve, dispense or sell any alcoholic beverages, including mixed beverages. To sell means to offer, to accept the order for, to exchange or deliver for money or its equivalent, or to handle payment. Under the state youth employment provisions, a youth under the age of 18 but at least 16 years of age may serve as a hostess but cannot serve as a cashier if the duties included accepting payment for alcoholic beverages. A youth under the age of 18 years but at least 16 years of age may clean up or “bus” tables that require them to remove containers with alcoholic beverages or vessels that contain alcoholic beverages, but they may not bring those containers or vessels to the table. They may not serve such containers, only remove them.
There is a parental exemption that allows youth under age 16 who are employed by their parents to work on the premises as long as another person at least 21 years old is in charge of and present at the licensed premises. Such youths are still prohibited from preparing, serving, dispensing or selling alcoholic beverages.
For more information call the Wage and Hour Division in either Charlotte at 704-344-6302 or Raleigh at 919-790-2741. Or call 866-4-USWAGE (487-9243). Additional information is available from the North Carolina Department of Labor at here and from the U.S. Department of Labor at http://www.dol.gov/dol/topic/youthlabor/
Deductions from Wages Employment Laws
The North Carolina Wage and Hour Act requires an employer to obtain written authorization from his or her employees before deducting or withholding any portion of an employee’s wages, except when required or empowered to withhold under state or federal law (e.g., taxes, certain garnishments or other amounts empowered by law, from an employee’s wages). Even if the employee were to grant authorization, there are certain withholdings that would not be permitted by law. For example, an employer cannot allow an employee to pay any portion of a workers’ compensation premium or to pay for costs for a drug test performed by the employer or at the employer’s request.
If the deduction is for the benefit of the employer, the employer can only make deductions from wages in the first 40 hours in a workweek down to the minimum wage (the minimum wage always must be paid), regardless of how many hours an employee works in a workweek. The employer cannot deduct from overtime wages at all. The wage deduction amount limit does not apply if the deduction is for something that is to the benefit of the employee such as, but not limited to, insurance, parking fee, credit union loan and voluntary participation in the United Way; but the employer still must get the employee’s written authorization prior to deducting such amounts for the employee’s benefit.
If the employer requires an employee to wear a uniform, the cost and maintenance of the uniform is considered to be for the benefit of the business. Therefore, if the employer requires the employee to pay for the uniform or cleaning of the uniform (even rental uniforms), the employer can only deduct down to the minimum wage of $7.25 per hour for the first 40 hours in a workweek for uniforms. The employer cannot by deducting such costs reduce the employee’s wage below minimum wage. This is true whether a payroll deduction is being made or the employee is paying out-of-pocket. (See "Uniforms")
An employer may retain from employee tips an amount up to or equal to the pro rata portion of the fee charged by the credit card issuing company which is attributable to the tips. However, in no event may the amount deducted from the employee’s tips exceed the pro rata portion of the amount charged by the credit card company. If an employer wanted to make any further deductions from an employee’s check, they would have to have written authorization from the employee. (See "Authorization for Withholding from Wages.")
Please note that the federal Fair Labor Standards Act ("FLSA") may differ as to what may be deducted from an employee’s wages. If you have questions concerning the federal wage and hour laws on deductions from wages, contact the U.S. Department of Labor’s Wage and Hour Division office in either Charlotte at 704-344-6302 or Raleigh 919-790-2741. Additional information is available from the North Carolina Department of Labor at http://www.nclabor.com/wh/fact%20sheets/deductions.htm and from the U.S. Department of Labor at http://www.dol.gov/whd/
Federal Health Care Reform Legislation Health Laws
Major changes are underway in the way health insurance is bought, sold and provided by employers in the United States. The 2010 health care law, the Patient Protection and Affordable Care Act (PPACA), as amended, reorganizes the commercial health insurance market. Among other major changes, the law requires many employers to provide employment-based health insurance coverage or pay a potentially substantial penalty.
Up-to-date information on health care reform is available as follows:
National Restaurant Association http://www.restaurant.org/healthcare
American Hotel & Lodging Association https://www.ahla.com/health-care
Foodborne Illness Reporting Health Laws
All restaurants, or other food or drink establishments, shall report all outbreaks or suspected outbreaks of foodborne illness in its customers or employees and all suspected cases of foodborne disease or foodborne condition in food handlers at the establishment by telephone to the local health department within 24 hours of discovering the illness or disease. For additional assistance on how to handle and report incidents of foodborne illnesses, including filing written reports, contact your local health department or the North Carolina Department of Health and Human Services.
NC Food Code Health Laws
North Carolina adopted the FDA Food Code in July of 2012 and began the enforcement of the code on September 1, 2012. The food code applies to every food service establishment in the state. NCRLA members were instrumental in helping to adopt and implement the FDA version of the food code. This process promotes consistency in rules and interpretations across the country and across county lines in NC. You may review the state food protection rules here.
You also may contact the NCRLA office for more information on rules regarding restaurants and lodging as well as ServSafe Food Protection Manager classes and on-line exams. ServSafe also provides a training course for line-level staff. ServSafe Food Handlers is a shortened, economical answer to training your entire kitchen staff on the basics of food safety. As part of the new food code, be sure you have one person in charge on every shift certified with the ServSafe Food Protection Manager certification.
Access the North Carolina Food Code Manual here: http://ehs.ncpublichealth.com/faf/docs/foodprot/NC-FoodCodeManual-2009-FINAL.pdf
NC Food Code Manual & Companion Docs Health Laws
Access the manual here: http://ehs.ncpublichealth.com/faf/docs/foodprot/NC-FoodCodeManual-2009-FINAL.pdf
NC Food Code Annexes Health Laws
View more info here: http://ehs.ncpublichealth.com/faf/food/foodcodeannex.htm
Forms, Permit Applications and Required Signage documents Health Laws
View info here: http://ehs.ncpublichealth.com/forms.htm
Drinking Age ABC Laws
Under North Carolina law, individuals must be 21 years old to purchase, attempt to purchase, possess or consume alcoholic beverages. Serving alcohol to an underage person is illegal and could result in a criminal penalty and possible revocation of an ABC permit. It is also illegal to sell alcoholic beverages to anyone who appears intoxicated.
The seller also may face a lawsuit under North Carolina law if an underage drinker who purchases alcohol at the seller’s establishment injures a third party. Furthermore, the seller may be subject to common law liability, which is unlimited, if a person of legal age who purchases alcohol at your establishment injures a third party. North Carolina law is statutory for minors, but based on common law for those of legal age. The liability limit for minors is $500,000.
Identification ABC Laws
Accepted forms of identification, which show a person’s age and provide a physical description of the person named on the card are:
• A driver’s license;
• A special identification card;
• A military identification card; or
• A passport.
The seller also may produce evidence of other facts that indicate reasonably at the time of sale that the purchaser was at least the required age. If it can be proved that the underage purchaser produced identification bearing a physical description of the person named on the card reasonably describing the purchaser and showing the purchaser to the required age for the purchase, the seller may use this fact as a defense to civil and criminal liability.
A new section of the law provides an additional defense to a person selling alcoholic beverages to a person less than 21 years of age. This defense is available if the buyer previously registered an accepted form of identification with the seller and the buyer used a biometric identification system (e.g., a fingerprint) to show his age.
Serving Alcoholic Beverages ABC Laws
No person under 21 may mix or dispense alcoholic beverages containing spirituous liquor. A person under 21, but not younger than 18, may dispense, serve and sell beer or wine while working as a waiter or waitress as part of his or her job and in accordance with North Carolina’s youth employment laws. However, their duties cannot include accepting payment for alcoholic beverages.
A youth under the age of 18 years but at least 16 years of age may clean up or "bus" tables that require them to remove containers with alcoholic beverages or vessels that contain alcoholic beverages, but they may not bring or serve those containers or vessels to a table. No youth under the age of 16 may be employed for any reason in a restaurant that holds an on-premises ABC permit even if they only work in the kitchen, as the entire restaurant is considered the "premises."
Hours and Days of Sale ABC Laws
No sale of malt beverages, unfortified wine, fortified wine, or mixed beverages may be made between the hours of 2 a.m. and 7 a.m., and no consumption of any of those alcoholic beverages between the hours of 2:30 a.m. and 7 a.m., is allowed in any place that has been issued an ABC permit. On Sundays, cities and municipalities may now adopt an ordinance to allow the sale of alcoholic beverages on any licensed premise at 10:00 a.m.
A city may adopt an ordinance prohibiting within the city the retail sale of malt beverages, unfortified wine, and fortified wine during any or all of the hours from noon on Sunday until 7 a.m. the following Monday. A county may adopt an ordinance prohibiting, in the parts of the county outside any city, the retail sale of malt beverages, unfortified wine and fortified wine during any or all of the hours from noon on Sunday until 7 a.m. the following Monday. Neither a city nor a county, however, may prohibit those sales in establishments having brownbagging or mixed beverages permits.
Permits ABC Laws
Sellers must obtain an ABC permit in order to sell any alcoholic beverage. (Keep in mind that some counties and cities do not allow some or any ABC permits.) To be eligible to receive and to hold an ABC permit, a person shall:
• Be at least 21 years old, unless the person is a manager of a business selling only malt beverages and unfortified wine, in which case the person shall be at least 19 years old;
• Be a resident of North Carolina unless he or she is an officer, director or stockholder of a corporate applicant or permittee and is not a manager or otherwise responsible for the day-to-day operation of the business; or he or she has executed a power of attorney designating a qualified resident of this state to serve as attorney in fact for the purposes of receiving service of process and managing the business for which permits are sought; or he or she is applying for a nonresident permit;
• Not have been convicted of a felony within three years, and, if convicted of a felony before then, shall have had his or her citizenship restored;
• Not have been convicted of an alcoholic beverage offense within two years;
• Not have been convicted of a misdemeanor controlled substance offense within two years; and
• Not have had an alcoholic beverage permit revoked within three years.
Before issuing a permit, the ABC Commission shall be satisfied that the applicant is a suitable person to hold an ABC permit and that the location is a suitable place to hold the permit for which he or she has applied. To be a suitable place, the establishment shall comply with all applicable building and fire codes. Other factors the Commission shall consider in determining whether the applicant and the business location are suitable are:
• The reputation, character and criminal record of the applicant;
• The number of places already holding ABC permits within the neighborhood;
• Parking facilities and traffic conditions in the neighborhood;
• Types of businesses already in the neighborhood;
• Whether the establishment is located within 50 feet of a church, public school, or church school;
• Zoning laws;
• Past violations at the location;
• Drug activity;
• Fighting, disorderly conduct and dangerous activities;
• The recommendations of the local governing body; and
• Any other evidence that would tend to show whether the applicant would comply with the ABC laws, and whether operation of his or her business at that location would be detrimental to the neighborhood.
An application for an ABC permit shall be on a form prescribed by the Commission and shall be notarized. Each person required to qualify shall sign and swear to the application and shall submit a full set of fingerprints with the application.
An application for an ABC permit shall be accompanied by payment of the following non-refundable application fees:
• On-premises malt beverage permit - $400
• On-premises unfortified wine permit - $400
• On-premises fortified wine permit - $400
• Brownbagging permit - $400, unless the application is for a restaurant seating less than 50, in which case the fee shall be $200
• Special occasion permit - $400
• Limited special occasion permit - $50
• Mixed beverages permit - $1,000
• Culinary permit - $200
• Wine importer permit - $300
• Any special one time permit - $50
• Mixed beverages catering permit - $200
• Brew on-premises permit - $400
• Wine producer permit - $300
• Wine tasting permit - $100
NOTE: The definition of malt beverage has changed as the maximum alcohol content for malt beverages has been raised from 6 percent to 15 percent (this excludes fortified and unfortified wine).
If there is a change in management, sellers must submit an application for substitution of a manager to the Commission within 30 days after he or she begins employment, and pay a non-refundable fee of $10.
Once issued a permit, sellers may not knowingly employ any person in the sale or distribution of alcoholic beverages who has been:
• Convicted of a felony within three years;
• Convicted of a felony more than three years previously and has not had their citizenship restored;
• Convicted of an alcoholic beverage offense within two years; or
• Convicted of a misdemeanor controlled substances offense within two years.
An ABC permit may not be transferred from one person to another or from one location to another. Each ABC permit held by an establishment shall be posted in a prominent place on the premises.
A revision to the statute no longer requires substantial evidence in order for the Commission to suspend or revoke a permit because the business is no longer suitable. Additionally, the law now requires the Commission to revoke a permit if there is a finding of two or more of the listed violations at a location within a 12 month period. The listed violations are gambling, disorderly conduct, prostitution, controlled substances, or felony criminal counterfeit trademark laws.
Training Requirement ABC Laws
Effective January 1, 2008, all applicants applying for temporary ABC permits will be required to provide proof of Responsible Alcohol Seller/Server training prior to obtaining a temporary ABC permit. If the applicant is representing a corporate chain, the corporation will be required to provide this proof of training for the manager. If the applicant is an individual, the applicant will be required to provide proof of training. Acceptable proof of training may be in the form of a certificate of training, transcript or other document provided by the course provider or corporate permittee. In the event the course provider did not issue a document reflecting completion of training, the applicant may have the course provider sign a form provided by the ABC Commission attesting to completion of this training.
Alcohol Beverage Control Commission Special Requirements for Hotels Innkeeper Laws
Brownbagging, On-Premise Fortified Wine, Mixed Beverages, or Modified Plan Permits. To qualify as a hotel for a brownbagging or a mixed beverages, or a malt beverage permit in areas approving on-premise malt beverages, an establishment shall have on or closely associated with its premises a full service restaurant providing at least 36 seats. The restaurant may or may not be owned by the same person who owns the hotel.
Locations Where Sales Permitted. Brownbagging by patrons, consumption of alcoholic beverages and sales of mixed beverages are allowed at any time during lawful hours in the restaurant and in any lounge or other place that is customarily open to the general public and that is associated with the restaurant. These lounges and other places need not be directly connected to the restaurant as long as the services of the restaurant are available to the lounge at all times that alcoholic beverages are being served. Sales and consumption of mixed beverages are allowed in banquet rooms, convention rooms, suites and similar places not usually open to the general public only during scheduled events and only to persons attending those events. Portable bars may be used for the sale or mixing of mixed beverages in those rooms.
Managers’ Receptions. Hotels operating lodging, restaurant and lounge facilities under one set of ABC permits may offer lodging guests up to two alcoholic beverages per guest per day in the price of the room package under the following conditions:
• The reception or social hour is held on the licensed premises of the hotel;
• The hotel issues a voucher or other proof of guest registration for the beverages that can be used by the guest to obtain the beverage of his or her choice;
• Nonalcoholic beverages shall also be offered to lodging guests during the function; and
• The hotel must account for the beverages by an internal accounting procedure to insure that the price of each beverage included in the room rate package is the same price as is being charged other patrons in the lounge or restaurant for the same beverage. This procedure must be acceptable to the ABC Commission’s Audit Division.
Guest Room Cabinet Permits and Application Requirements. Applications for a guest room cabinet permit will be accepted only from hotels with mixed beverages permits, or from hotels simultaneously applying for mixed beverages permits, in the following counties: Buncombe, Cumberland, Durham, Forsyth, Gaston, Guilford, Mecklenburg, Moore and Wake (see GS 18B-1001(13)). In addition to the general requirements for permit applications, a hotel applying for a guest room cabinet permit shall submit the following items along with the completed application form and appropriate fee:
• List of lodging rooms by room number in which cabinets will be placed;
• Total number of lodging rooms and total number of rooms set aside that will not have a cabinet;
• Description of cabinets to be installed by the hotel. A manufacturer’s brochure describing the cabinet will be sufficient, or the permittee may submit photographs and a written description of the lock used on the cabinet; and
• Written policies developed by the permittee regarding the procedures that will be implemented by the hotel to insure no one under 21 is able to obtain a key to the cabinet; control inventory; insure price lists for items sold from cabinets are easily readable; dispose of all opened alcoholic beverage containers sold from cabinets after guest has checked out; and maintain adequate numbers of ice and soft drink vending machines elsewhere on the premises.
Careless or Negligent Setting of Fires Innkeeper Laws
Any person who in any fashion or manner negligently or carelessly sets fire to any bedding, furniture, draperies, house or household furnishings or other equipment or appurtenances in or to any hotel or other building of like occupancy shall be guilty of a Class 1 misdemeanor.
Contracts Innkeeper Laws
A written statement setting forth the time period during which a guest may occupy an assigned room, signed or initialed by the guest, shall be deemed a valid contract, and at the expiration of such time period the lodger may be restrained from entering and any property of the guest may be removed by the innkeeper without liability, except for damages to or loss of such property attributable to its removal.
Defrauding Innkeeper or Campground Owner Innkeeper Laws
No person shall, with intent to defraud, obtain food, lodging, or other accommodations at a hotel, inn, boardinghouse, eating house, or campground. Whoever violates this law shall be guilty of a Class 2 misdemeanor. Obtaining such lodging, food, or other accommodation by false pretense, or by false or fictitious show of pretense of baggage or other property, or absconding without paying or offering to pay therefore, or surreptitiously removing or attempting to remove such baggage, shall be prima facie evidence of such fraudulent intent, but this rule shall not apply where there has been an agreement in writing for delay in such payment.
Liability for Loss of Baggage Innkeeper Laws
Innkeepers shall not be liable for loss, damage or destruction of the baggage or property of their guests except in case such loss, damage, or destruction results from the failure of the innkeeper to exercise ordinary, proper and reasonable care in the custody of such baggage and property; and in case of such loss, damage or destruction resulting from the negligence and want of care of the said innkeeper, he shall be liable to the owner of the baggage and property to an amount not exceeding $100. Any guest may, however, at any time before a loss, damage or destruction of his property, notify the innkeeper in writing that his property exceeds $100 in value, and shall, upon demand of the innkeeper, furnish him a list or schedule of the property with its value, in which case the innkeeper shall be liable for the loss, damage or destruction of the property because of any negligence on his part. Proof of the loss of any such baggage, except in case of damage or destruction by fire, shall be prima facie evidence of the negligence of the hotel or innkeeper.
Safekeeping of Valuables Innkeeper Laws
It is the duty of innkeepers, upon the request of any guest, to receive from the guest and safely keep money, jewelry and valuables to an amount not exceeding $500; and no innkeeper shall be required to receive and take care of any money, jewelry or other valuables of a greater amount than $500, provided, the receipt given by the innkeeper to the guest shall have plainly printed upon it a copy of this rule. No innkeeper shall be liable for the loss, damage or destruction of any money or jewels not so deposited.
Americans with Disabilities Act Title III Other Industry-Related Laws
Title III of the Americans with Disabilities Act ("ADA") is designed to protect the rights of disabled people to access public accommodations, transportation, communications and employment. (Title I of the ADA prohibits covered employers from discriminating against a "qualified individual with a disability" in regard to job applications, hiring, advancement, discharge, compensation, and training, or other terms, conditions, or privileges of employment. See above.)
For your guests, the ADA requires that you:
• Not impose eligibility criteria that could limit the opportunities of people with disabilities to fully enjoy the facilities and services provided, unless it can be shown these criteria are necessary for providing these services;
• Make reasonable modifications to policies and practices to accommodate individuals with disabilities, unless doing so would fundamentally alter the nature of the accommodations or services provided;
• Provide "auxiliary aids and services" to make sure people with disabilities have equal access to goods and services, unless it can be shown that this is an undue burden or fundamentally alters the nature of the services provided; and
• Remove architectural and communications barriers in existing facilities wherever this is readily achievable (i.e., easily accomplished without much difficulty or expense). If barrier removal is not readily achievable, the operator must consider any readily achievable alternative ways of making services or accommodations available.
Under Title III of the ADA, there are different standards for "new construction" and "alterations" made to an existing facility. New construction refers to a facility that is first occupied after January 26, 1993. For new construction, companies are required to design and construct facilities that are "readily accessible to and usable by individuals with disabilities, except where an entity can demonstrate that it is structurally impracticable to meet the requirements in accordance with standards set forth…under" Title III of the ADA.
However, a number of cases involving alleged accessibility violations involve facilities that predate the ADA’s effective date. Many owners are under the misconception that if their restaurant’s building predates the ADA, they are grandfathered in. In fact, the ADA applies to such facilities when they are altered. To affect the ADA’s purposes involving increased accessibility, the definition of an "alteration" is rather broad. Specifically, an "alteration" refers to a "facility or part thereof that is altered by, on behalf of, or for the use of an establishment in a manner that affects or could affect the usability of the facility or part thereof." For more information on accommodating guests in restaurants and hotels, go to the ADA website at http://www.ada.gov/t3hilght.htm In addition, a checklist for new lodging facilities is available at http://www.ada.gov/hsurvey.htm
Americans with Disabilities Act Title III New Architectural Standards Other Industry-Related Laws
In a ceremony marking the twentieth anniversary of the ADA, on July 26, 2010, President Barack Obama announced that the Justice Department (DOJ) had published new accessibility standards, known as the 2010 ADA Standards of Accessible Design (2010 Standards). The 2010 Standards, which incorporate significant changes to the requirements for accessible facilities, are the first major revision to Title III of the ADA since the 1991 ADAAG were published. In addition, the 2010 Standards adopted the Access Boards 2004 Guidelines, finally giving them legal effect. One of the major goals of the new standards is to minimize compliance burdens on entities subject to building regulations imposed by different levels of government by harmonizing federal design standards with private sector model codes that are adopted by most states. The 2010 Standards of the ADA Title III became effective March 15, 2011 and full compliance with them was required to be accomplished by March 15, 2012. Any company that builds or alters a facility after this date is required to comply with the 2010 Standards in order to make its built environment accessible to individuals with disabilities and free of architectural barriers. A general "safe harbor" rule applies to elements in covered facilities that were built or altered in compliance with the 1991 ADAAG; those elements would not be required to be brought into compliance with the 2010 Standards until the elements were subject to planned alteration.
The 2010 Standards detail the technical rules for building accessibility and service to disabled customers. Many architectural barriers are somewhat obvious, such as: a parking space with no access aisle to allow deployment of a van’s wheelchair lift; steps without additional ramp access at a facility’s entrance or within its serving or selling space; aisles too narrow to accommodate mobility devices; counters that are too high; or restrooms that are simply too small to use with a mobility device.
Such architectural barriers are only required to be remedied if "readily achievable;" that is, when it is easily accomplishable without much difficulty or expense, considering the size and resources of a business. The DOJ has instructed that determining the nature and costs of barrier removal on a business’s resources must include consideration of any parent corporation’s resources as well. Furthermore, courts typically consider accessibility features to be readily achievable in new construction, unless for some reason the feature would be structurally impossible.
The 2010 Standards contain some regulations specific to the food and restaurant industry. For example, there must be an accessible route for people with disabilities to all dining areas, including raised or sunken dining areas and outdoor dining areas, as well as to food service lines, service counters, condiment and beverage bars, and public restrooms. This entails that tables in dining areas will need to be arranged far enough apart so that a person using a wheelchair or other mobility device can maneuver between tables when patrons are sitting at them.
The 2010 Standards also contain several requirements for dining surfaces at restaurants. Specifically, at least five percent of all dining surfaces – including bars, tables, lunch counters, booths, etc. - must be accessible to persons with disabilities. To be "accessible," the height must be between 28 to 34 inches and the clearance underneath must provide 27-inch-high knee space that is at least 19 inches deep and 30 inches wide.
A relatively easy standard to comply with is ensuring there are sufficient handicap parking spaces for customers with disabilities in a restaurant’s parking area. The 2010 Standards have increased the required number of accessible spaces, as indicated below, and one of every six spaces must be van-accessible.
Americans with Disabilities Act Title III Service Animals Provisions Other Industry-Related Laws
The most significant change in the ADA Title III regulations on service animals is a limitation on the species that restaurants and other public accommodations are required to admit. Today, the only species that the Americans with Disabilities Act requires restaurants to admit to assist patrons with disabilities are dogs and miniature horses. The Justice Department determined that "limiting the number and types of species recognized as service animals will provide greater predictability for public accommodations as well as added assurance of access for individuals with disabilities who use … service animals." Therefore, "[o]ther species of animals, whether wild or domestic, trained or untrained," are no longer required by the ADA to be admitted into public accommodations.
A restaurant is required to "modify policies, practices, or procedures to permit the use of a [dog otherwise meeting the definition of a] service animal by an individual with a disability." There are no limitations on the size or weight of dogs that may be used. Neither are there any limitations on breeds of dogs that may be used as service animals. The DOJ stated that it did "not believe that it [was] either appropriate or consistent with the ADA to defer to local laws that prohibit certain breeds of dogs based on local concerns that these breeds may have a history of unprovoked aggression or attacks."
The new ADA regulations include a separate section with a more limited allowance for people with disabilities to use miniature horses instead of "service animals" (dogs). Restaurants and other public accommodations are allowed greater discretion to determine "whether reasonable modifications in policies, practices, or procedures can be made to allow a miniature horse into a specific facility…." Specifically, a restaurant may consider "[t]he type, size, and weight of the miniature horse and whether the facility can accommodate these features," as well as "[w]hether the miniature horse’s presence in a specific facility compromises legitimate safety requirements that are necessary for safe operation." However, the presumption is that "[a] public accommodation shall make reasonable modifications in its policies, practices or procedures to permit the use of a miniature horse by an individual with a disability if the miniature horse has been individually trained to do work or perform tasks for the benefit of the individual with a disability."
The new regulations also specify that a service animal must be "individually trained to do work or perform tasks. Examples of work or tasks include, but are not limited to, assisting individuals who are blind or have low vision with navigation and other tasks, alerting individuals who are deaf or hard of hearing of the presence of people or sounds, providing nonviolent protection or rescue work, pulling a wheelchair, assisting an individual during a seizure, alerting individuals to the presence of allergens, retrieving items such as medicine or the telephone, providing physical support and assistance with balance and stability to individuals with mobility devices, and helping persons with psychiatric and neurological disabilities by preventing or interrupting impulsive or destructive behaviors."
However, if an animal has not been trained to "do work or perform tasks," the ADA does not require a restaurant or other public accommodation to admit it. The definition of "service animal" states that "the provision of emotional support, well-being, comfort, or companionship do not constitute work or tasks for the purposes of this definition."
Up-to-date information on ADA requirements relating to service animals is available at http://www.ada.gov/qasrvc.htm and at http://www.ada.gov/service_animals_2010.htm
Americans with Disabilities Act Title III Swimming Pools Other Industry-Related Laws
The effective date of the 2010 Standards generally is March 15, 2012. This is the compliance date for pools that are newly constructed or altered on or after this date. A physical change to a swimming pool which affects or could affect the usability of the pool is considered to be an "alteration."
The DOJ has stated that changes to the mechanical and electrical systems, such as filtration and chlorination systems, are not alterations. Beyond that, the law is vague on what would comprise an alteration, only noting "a physical change to a swimming pool which affects or could affect the usability of the pool is considered to be an alteration".
This might include installing a slide or diving board, increasing or reducing the size of the pool deck, changing path of travel from the entrance of the facility to the pool or changing the locations to dressing rooms and restrooms. In other words, anything that affects how anyone would use the pool and its accommodations; however, you should consult with an attorney who works in this realm, or a representative from the DOJ, if you are unsure.
Recognizing the extent of these concerns in determining appropriate compliance when faced with such an immediate compliance date, the DOJ extended the compliance date for existing pools to January 31, 2013. The DOJ has made it clear that this extension applies only to existing pools and has no effect on the March 15, 2012 compliance date in place for new construction and alterations of swimming pools and spas.
Diving into the New Guidelines
The 2010 Standards apply differently to facilities that existed before and after the effective date of these standards. A general summary of what is required follows. (For more comprehensive information, including technical specifications outlined in Section 1009, consult the 2010 Standards at http://www.ada.gov/regs2010/2010ADAStandards/2010ADAStandards_prt.pdf.)
Newly constructed or altered pools. The 2010 Standards require that newly constructed or altered swimming pools have an accessible way for people with disabilities to enter and exit the pool. In this regard, the 2010 Standards set minimum scoping and technical requirements for accessible means of entry and exit, depending on the size of the pool.
Specifically, Section 242 provides that large pools (pools with 300 or more linear feet of pool wall) must have two accessible means of entry, one of which must be a pool lift or sloped entry. The other accessible means of entry include a transfer wall, transfer system, or pool stairs.
Small pools (pools with less than 300 linear feet of pool wall) must provide at least one accessible means of entry, which must either be a pool lift or a sloped entry. In advisory language, the DOJ recommends but does not require that, where more than one means of access is provided into the water, the means must be different and placed in different locations in the pool to serve the varying needs of individuals with disabilities.
The 2010 Standards also provide details about what features an accessible means of entry should include. Specifically, Section 1009 addresses pool lift requirements such as the location, size of the seat, lifting capacity, clear floor space, operation, and submerged depth, as well as the requirements for sloped entry, transfer wall, transfer system, and pool stairs.
The DOJ has interpreted the 2010 Standards as requiring fixed (attached to the deck or apron in some way) pool lifts when pool lifts are used as an accessible means of entry. In addition, in new construction or altered pools, each pool must provide its own accessible entry and exit. For example, sharing pool lifts between two pools is not permitted.
When pools are altered, the alterations must comply with the 2010 Standards to the maximum extent feasible. Full compliance for an alteration is not required only where an entity (e.g. business, organization) can demonstrate that it is "structurally impracticable" to meet the requirements. Full compliance will be considered structurally impracticable only in those rare circumstances when the unique characteristics of the terrain prevent the incorporation of accessibility features.
Existing pools: removal of accessibility barriers to extent readily achievable. Title III of the ADA imposes an ongoing obligation on businesses to remove accessibility barriers in existing facilities only when it is "readily achievable" to do so. "Readily achievable" means providing access is easily accomplishable and able to be carried out for the facility without much difficulty or expense. In lay terms, this translates to "cheap and easy to do."
To determine whether it is readily achievable to provide an accessible means of entry into an existing pool, the DOJ applies a flexible, case-by-case analysis, with the goal of ensuring that ADA requirements are not unduly burdensome, including to small businesses. The readily achievable analysis is based on the following factors:
• The nature and cost of the needed action;
• Overall resources of the site(s) involved, the number of persons employed at the site, the effect on expenses and resources, legitimate safety requirements that are necessary for safe operation (including crime prevention measures), or the impact otherwise of the action upon the operation of the site;
• The geographic separateness and relationship of the site(s) to any parent corporation or entity;
• If applicable, the overall financial resources of any parent corporation or entity, the overall size of the parent corporation or entity with respect to the number of its employees, and the number, type, and location of its facilities; and
• If applicable, the type of operation(s) of any parent corporation or entity, including the composition, structure, and functions of the workforce of the parent corporation or entity.
For an existing pool, it may be readily achievable to remove barriers by installing a fixed pool lift that complies with the 2010 Standards. If installation of a fixed pool lift is not readily achievable, the entity may then consider alternatives, such as the use of a non-fixed pool lift that complies with the 2010 Standards.
The DOJ has recently stated that it will exercise its "prosecutorial discretion" to not enforce the fixed pool lift requirement against a business that already purchased a compliant non-fixed pool lift prior to March 15, 2012, as long as the lift is ready for use next to the pool whenever the facilities are open.
Another provision of the 2010 Standards permits an entity to deviate from the technical requirements for access when meeting those requirements is technically infeasible. This term is defined as change that affects a load bearing wall or element, or exists because of unique site constraints. For example, a pool in an existing dive shop with walls two feet from the pool edge do not provide adequate space for an accessible route, certainly for a pool lift. If those walls are load bearing, the change need not be made.
Similarly, if a facility cannot afford a lift, the ADA does not require closure of the facility. In fact, nowhere in the regulation or the statute, or the administrative or court decisions, has a facility been required to close.
In such circumstances, the DOJ recommends that businesses develop a plan to provide access into the pool when it becomes readily achievable in the future, in accordance with the businesses’ ongoing obligation to provide accessible features when it becomes readily achievable to do so.
Likewise, if a place of public accommodation determines that its facilities have barriers that should be removed pursuant to the ADA, but it is not readily achievable to undertake all of the modifications immediately, the DOJ recommends that the place of public accommodation develop an implementation plan designed to achieve compliance with the ADA’s barrier removal requirements over time.
The DOJ has stated that such a plan, if appropriately designed and diligently executed, may well serve as evidence of a good faith effort to comply with the ADA’s barrier removal requirements.
Unfortunately, there are no "one size fits all" answers that apply to every facility. Like tax law, the application of these laws requires analysis of individual business circumstances. Unlike tax law, advisors with experience in this area are fewer and farther between, and include mostly attorneys who specialize in representing businesses in ADA claims. [Editor’s note: Perhaps it behooves industry representation organizations, such as DEMA, to provide ready resources to help its members apply these laws to their businesses, and communicate with government authorities regarding specific compliance.]
All pools. Accessible pool features must be maintained in operable, working condition so that persons with disabilities have access to the pool whenever the pool is open to others. For example, a non-fixed pool lift may be stored when the pool is closed but it must be at poolside and fully operational during all open pool hours. In addition, ongoing staff training is essential to ensure that accessible equipment (particularly pool lifts) and pool facilities are available whenever a pool is open. Staff training should include instruction on what accessible features are available, how to operate and maintain them, and any necessary safety considerations.
The ADA does not invalidate or limit the procedures of any state or local law that provides greater or equal protection for the rights of persons with disabilities.
The 2010 Standards also contain several provisions relating to dressing rooms and toilet facilities.
Dressing rooms and lockers. When dressing or locker rooms, or lockers, are provided and are clustered together, five percent, or at least one, must be accessible to persons with disabilities. To be accessible, a level turning space must be provided within the dressing room, providing a space of either 60 inches diameter minimum (circular space) or 60 inches square minimum (T-shaped space) with arms and base 36 inches wide minimum. Clear floor space must be at least 30 inches by 48 inches. Doors may swing into the turning space, but not the clear floor space. For coat hooks provided within an accessible dressing room, the unobstructed high forward or high side reach can be no greater than 48 (and no lower than 15) inches from the floor. Shelves in accessible dressing rooms must be between 40 and 48 inches above the floor.
For lockers, at least one, or five percent of the type of locker, must be accessible. Requirements are similar to those for dressing areas: hooks and shelves not higher than 48" above finished floor (abbreviated "a.f.f.", the height a measured from the top of the flooring material, e.g., tile, not the subfloor) and no lower than 15" a.f.f. Operating mechanisms for the locker must not require tight pinching, twisting, or grasping. A good smart practice is to mark the locker with a disabled access icon.
Serving accessible lockers and dressing areas, accessible benches must be provided with a clear floor space positioned to allow persons using wheelchairs or other mobility devices to approach parallel to the short end of a bench seat.
Benches must have seats that are between 20 and 24 inches in depth and at least 42 inches in length. The seat height should be between 17 and 19 inches above the floor. If the bench is not affixed to a wall, it must have back support that is at least 42 inches in length and extends from a point no greater than 2 inches above the seat to a point at least 18 inches above the bench.
Benches must be strong enough to withstand a vertical or horizontal force of 250 pounds applied at any one point on the seat, fastener, mounting device, or supporting structure. If benches are used in wet areas, the surface must be slip-resistant and designed not to accumulate water.
Toilet facilities. Where multiple single-user toilet rooms are clustered in a single location, no more than 50 percent at each cluster are required to be accessible to persons with disabilities. To be accessible, a toilet facility must comply with the required spacing for turning space and clear floor space as described above for dressing rooms. Grab bars must be located on one side wall and the rear wall. The center line of the toilet must be between 16 and 18 inches from the side wall.
Facilities to which Title III of the Americans with Disabilities Act (ADA) applies may be able to take advantage of federal tax incentives. In an effort to encourage compliance with the ADA, Section 44 of the I.R.S. Code allows for a tax credit for small businesses and Section 190 allows for a deduction for all businesses.
The tax credit under Section 44 is available to businesses with total revenues of $1,000,000 or less in the previous tax year, or 30 or fewer full-time employees. The credit can cover 50 percent of the eligible access expenditures in one year up to $10,250, with a maximum credit of $5,000. This credit can be used to offset the cost of undertaking barrier removal and alterations to improve accessibility. The tax deduction under Section 190 is available to all businesses, every year, with a maximum deduction of $15,000 per year. A business may claim this deduction for expenses incurred in barrier removal and alterations.
Up-to-date information on ADA swimming pool requirements can be found at http://www.ada.gov/qa_existingpools_titleIII.htm and at http://www.ada.gov/pools_2010.htm
Bad Checks Other Industry-Related Laws
Writing a worthless check is a misdemeanor if the amount of the check is $2,000 or less and a felony if it is more than $2,000. If the writer of the check fails to pay the business within 30 days after he or she has made a written demand for the money, the writer of the check may be liable for the amount of the check, the service charges and process fees and for additional damages of three times the amount of the check not to exceed $500 and not less than $100 under North Carolina law. The processing fee permitted under North Carolina law is $25 provided there is a conspicuously posted sign in the immediate vicinity of the cash register (or other place where the check is received) stating the amount of the fee that would be charged on a returned check. Owners or managers are required to send two written demands to the writer of the check by certified mail to his or her last known address before initiating any action to recover the damages described above.
The initial written demand should contain the following information:
• The date the check was written;
• The amount of the check, the bank on which it was drawn and the account number;
• The reason the check was dishonored by the bank;
• The total amount due to rectify the matter, which includes the face value of the check, the $25 processing fee authorized under North Carolina law and any bank service fee; and
• Notice that if the total amount is not paid within 30 days, the business may file civil action to seek damages of three times the amount of the check, with a minimum of $100 and maximum damages of $500.
If after this first notice the writer of the bad check has failed to pay as demanded, the business must send a second notice reiterating the information in the first notice. After 30 days, if the writer of the bad check has failed to pay, owners or managers may file an action to recover the amount demanded including reasonable attorneys’ fees and court costs.
Business Meal Deductibility Other Industry-Related Laws
A 1993 federal law reduced the deductibility for business meals and entertainment from 80 percent to 50 percent. In 1997, Congress made revisions to the law that gradually increase the deductibility for workers subject to federal hours of service limitations, such as truck drivers and airline crews, from 50 percent to 80 percent over the next 10 years. Items that are 50 percent deductible include:
• Travel meals (truckers and salespeople who eat meals away from home);
• Business meals;
• Catered meals (including meals catered at a person’s home or place of business);
• Employer provided meals to employees (employers other than restaurateurs);
• Cover charges at nightclubs if used for entertainment purposes;
• Amounts paid to rent a room for a reception; and
• Parking at an event, which is an entertainment deduction.
Items that are fully deductible (100 percent):
• Company picnics or holiday parties;
• Holiday turkeys (or similar gifts);
• Samples or promotional items;
• Restaurant or catering food costs associated with selling to bona fide paying customers;
• Employer provided meals in which the employee pays fair market price (employer is not restaurateur or caterer);
• Meals provided to restaurant or catering employees by the employer on the premises;
• Meals and entertainment provided by employer as wages or compensation to employee.