General manager Andreas Hachmeister wrote that the hotel employee in question was put on leave while the hotel tries to reach Ofarim to shed light on what happened.
Ofarim's manager, Yvonne Probst, could not immediately be reached for comment. German news agency dpa quotes his management team as saying that Ofarim, 39, did not want to comment further publicly.
Ofarim is the son of Israeli singer Abi Ofarim, who performed with his first wife, Esther, during the 1950s and 1960s. The couple were known internationally for their renditions of folksongs and chansons.
In his Instagram video, Ofarim says he was standing in line to register at the hotel and noticed that people standing behind him received service ahead of him.
"I was standing there, with my necklace, and one person after the next was pulled out from behind me," Ofarim said.
He said when he eventually got to the front of the line and asked why everybody else was getting preferential treatment, a hotel employee told him he, too, could check in if he put away his Star of David necklace first.
Ofarim, who was close to tears when he talked about his experience on Instagram, did not say what happened next but added: "Really? Germany in 2021."
Later, hundreds of people protested against anti-semitism in front of the Westin hotel in Leipzig, dpa reported. Several people held up a large banner saying "Against any kind of antisemitism. We remember."
Irena Rudolph-Kokot, one of the protest organisers, said "we support Jews in Germany who are way too often exposed" to anti-semitism. Several hotel employees also joined the protest and helped to put up a banner with the flag of Israel in front of the building's entrance, dpa reported.