Business Penalties for Breaking Alcohol Service Laws

Business Penalties for Breaking Alcohol Service Laws

4 Min Read

Employers face serious repercussions if their business breaks alcohol service laws.

Owners and managers of licensed establishments have a responsibility to follow the alcohol service laws in their area, and there are clear consequences if those laws are broken.

Each state has the right to regulate the sale and service of alcohol, and towns and counties may also have their own alcohol service regulations. Owners of licensed establishments need to be aware of the laws related to alcohol service in their specific state and region. Some laws apply across the country: no matter what state you’re in, the minimum drinking age is 21, and the legal limit for driving is .08% BAC.

The laws exist to help you keep customers safe — which should be the top priority of any business that sells alcoholic beverages to the public.

Alcohol service laws to follow

If your business sells or serves alcohol, you need to:

  • have the correct licenses and permits to sell or serve alcohol in your area
  • employ staff that have their Alcohol Server / Seller Training, as required by your state
  • ensure any employee who pours or serves alcohol are of the age requirement to do so in your state
  • conduct business within set hours of operation
  • prevent serving alcohol to minors
  • refuse or stop service to visibly intoxicated people

If any of these stipulations are not met, legal consequences will follow.

It’s important to note that some laws — for example, around cannabis consumption, drinking on the job, self-provided alcohol and drink specials — vary depending on the state where your business is located. Owners of licensed businesses should know and follow all of the alcohol service laws in their area.

Role of the liquor authority

The liquor authority and the local law enforcement agency both have a role to play in ensuring rules are followed. Liquor authority agents will visit licensed premises to conduct inspections of all physical areas of the establishment and address any issues around alcohol service. They can conduct these audits or inspections any time during business hours and can do so without probable cause or a warrant.

Inspections are aimed at ensuring the employer and employees are following laws around alcohol service. The local law enforcement will inform the liquor authority if an alcohol-related incident has occurred, so that liquor authority agents can inspect and take action to suspend the establishment’s license if required.

Owners and managers who break alcohol service laws can face fines, lawsuits and even be charged with a crime. There are three crime classifications related to laws around alcohol service.

  • Infraction: An infraction, sometimes called a violation, is the least severe crime classification. These are usually punished by fines rather than jail time. Drinking in public is an example of an infraction.
  • Misdemeanor: A misdemeanor could result in a fine or county jail time. Failing to check ID and serving a minor would count as a misdemeanor.
  • Felony: A felony is a serious crime that is punishable by a state prison term longer than one year. A DUI (driving under the influence) charge is classified as a felony.

Three types of liabilities

Licensed business owners and employees can be held liable if they serve alcohol irresponsibly. These are the three types of liabilities that can apply to them:

  • Criminal: If you commit a criminal act, for example, serving alcohol to someone under 21 years old, you can be held criminally liable, and may face fines, probation or even jai time.
  • Civil: Civil liability aims to compensate people who were hurt by negligence — which in this case means serving alcohol irresponsibly. For example, serving alcohol to an obviously intoxicated person. They could drive drunk, injure someone, and you can be sued in court and forced to pay damages for serving them.
  • Administrative: This type of liability punishes those who don’t follow alcohol laws by revoking the server’s right to sell alcohol, suspending or revoking the employer’s liquor license, or fining the server or the establishment. Vicarious liability falls under this category. This means the employer can be held responsible for the actions of a server who broke alcohol laws.

Providing alcohol service comes with big responsibilities and serious legal consequences if laws are not followed. While this may seem intimidating, businesses can work to avoid legal problems by always prioritizing operating within the law and keeping customers safe. Make sure you and all employees are aware of the laws that apply to your operation, follow them, and success will follow!

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