Bill Smyth, owner of Westover Winery in California’s Castro Valley, thought he’d found a mutually beneficial business practice: Bring in some unpaid helpers during grape harvest and crushing season and teach them how to make wine.
The state of California, however, wasn’t keen on Westover’s use of volunteer labor and slapped the small winery with an $115,000 fine. Using volunteer workers at a for-profit business is illegal under state and federal law, and California’s Department of Industrial Relations said Smyth should have been paying them at least minimum wage, giving them wage statements, withholding taxes and paying for workers’ compensation insurance.
The penalty was so steep that Smyth says he plans to close his 30-year-old winery later this year.
"We're a small winery, open only 10 hours a week,” Smyth told the San Jose Mercury News. “We didn't really need any helpers; we were just educating people about wine.”
The news of the hefty fine and winery’s closure sent shockwaves throughout California’s wine region. At least one other vintner told the Mercury News that taking on volunteers was common practice among wineries in the region—though many have quickly stopped the practice since news broke of Westover’s steep penalty.
Small businesses of all kinds need to tread carefully when it comes to taking on free help. Someone may offer to volunteer at a business—but that doesn’t make it legal. The U.S. Department of Labor bans for-profit private sector businesses from using volunteer workers and some states crack down on it.
One organic farmer in San Anselmo, California, Jerome Draper, was fined $1,050 in 2010 ago because family members, such as siblings and nieces and nephews would sometimes help out on his one-acre farm, according to the Marin Independent Journal. (California law allows only “immediate family” to provide unpaid help.)
The Westover Winery situation shows that sometimes an illegal practice can go on for a long time unnoticed or undealt with. But when officials eventually do step in, it can have devastating effects on the business.
“These are not idle things,” Peter Melton, a California state spokesman, told the Mercury News. “People should be paid for their labor. The workers’ compensation violations are very serious. What happens if someone has a catastrophic injury at the winery?”
Read more articles on hiring and firing.