by David Pihlgren, Hospitality Resource Group

Texas led the nation in EEOC claims against employers in 2017. Half of those claims were against small business employers with 100 employees or less.

While claims are typically brought for age, race, religious, and disability discrimination, or for harassment, the EEOC has seen a 40% spike over the last several years in claims citing employee retaliation as a basis for the suits.

Employment-related claims can be extremely costly. Some cases drag on for years causing major drains on time and resources for small hotels. The EEOC says the average bill for a discrimination case exceeds $235,000.

What puts small hotels at greater risk?

Simply put, small hotels have fewer resources and smaller cash reserves. Employment-related claims tend to be complicated and detail intensive. These are the main factors that put them at risk:

  • Overall lack of extensive record-keeping on employee performance
  • Minimal staff and lack of in-house counsel and/or full human resource department
  • More intimate working environments which can cause personal riffs during layoffs

Many hotels consider Employment Practice Liability Insurance. There are a growing number of affordable options on the market, but hotels should be cautious of high deductibles and out of pocket expenses.

While a $30,000 deductible expense may seem high, it’s better than an employment lawsuit exceeding $250,000, although this might still be a difficult option for small hotels.

There are also services such as PEOs (Professional Employer Organizations) that give small and medium-size hotels access to resources they may not have, such as legal counsel and compliance teams, as well as access to a fully staffed Human Resource Department.

PEOs offer detailed record keeping and counseling of an employee’s performance and can help avoid a claim in the first place.

Legal resources and U/I claim management give small Hotel owners options to navigate their business knowing they are in compliance with all state/federal rules and guidelines regarding their employment practices.

Please contact us with any questions you may have.

David Pihlgren, Hospitality Resource Group


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