In the legal realm, hotels have been thrown some difficult challenges in California.  Aside from an increase in minimum wage (not to be taken lightly, and the jury is out on its impact), California has enacted two significant laws that have received a lot of media attention: The Consumer Right to Privacy Act of 2018 and AB5.

The Consumer Right to Privacy Act is aggressive in protecting Californians’ right to privacy by giving consumers much more control of their personal information and loads the burden of compliance on both owners and operators to comply with a complex set of laws to achieve that goal.  AB5 on the other hand codifies and intensifies the standard of classifying an individual as an independent contractor and will have far reaching impacts on employer costs with respect to Social Security and Medicare taxes, unemployment and disability insurance, workers’ compensation costs and coverage, sick leave, minimum wage, overtime, and rest breaks and meal periods.

Finally, at the Federal level, the IRS Release of the final Opportunity Zone regulations – consisting of 350 pages of explanations of what was changed and what remained unchanged from the proposed regulations released in October 2018 and May 2019, and almost 200 pages of regulations and examples – contains mostly good news for real estate investors with a significant caveat: the rules are still complex and the jury is out on the law’s long term impact.

Cybersecurity:

Hotel Managers and Owners Be Warned – You are Responsible for Your Hotel’s Data Security:https://hotellaw.jmbm.com/ftc-warns-hotel-data-security.html=

CCPA: Loyalty Programs, Data Retention and the Brave New World of Privacy:https://hotellaw.jmbm.com/the-california-consumer-privacy-act-what-hoteliers-need-to-know-now.html

Labor:

Hotel Lawyer: Labor & Employment New Year Round-Up: What to Expect in 2020:https://hotellaw.jmbm.com/hotel-lawyer-labor-employment-new-year-round-up-what-to-expect-in-2020.html

California limits use of independent contractors, creating significant liabilities and penalties for California employers: https://hotellaw.jmbm.com/hotel-lawyer-california-limits-use-of-independent-contractors-creating-significant-liabilities-and-penalties-for-california-hotel-and-restaurant-employers.html

Opportunity Zone:

How the Final IRS Opportunity Zone Regulations Impact Real Estate Investment and Development in Qualified Opportunity Zones: https://www.investmentlawblog.com/2020/01/14/how-the-final-irs-opportunity-zone-regulations-impact-real-estate-investment-and-development-in-qualified-opportunity-zones/

How the Latest IRS Opportunity Zone Regulations Help Real Estate Developers Qualify for Opportunity Zone Tax Benefits: https://www.investmentlawblog.com/2019/06/13/how-the-latest-irs-opportunity-zone-regulations-help-real-estate-developers-qualify-for-opportunity-zone-tax-benefits/

 

By Guy Maisnik

JMBM – Partner – Global Hospitality Group

(310) 201-3588 (office)

(213) 280-9972 (cell)