Page 111

with bottling could lead to a violation of the FLSA. While we may appreciate the social or other community benefits of fine spirits, it is obviously difficult to argue that our test subject is volunteering as part of a public service, humanitarian or religious exercise. The labor is being performed without the expectation of cash compensation — but by providing her with a discount on her purchases and the aforementioned hearty lunch the distillery is actually providing our pseudo-volunteer with a form of compensation. And since she’s almost certainly being solicited to help with bottling for the sole purpose of avoiding the need to hire employees to perform the task, her work is exactly the kind of labor that would otherwise be performed by employees and does in fact displace employees. For those keeping score, this means our dutiful laborer has failed each of the three required prongs for being considered a volunteer under the FLSA and if our distillery engages her on this basis it is breaking federal law and probably other state and local laws as well. Recognizing this, some distilleries seek to claim that our laborer is actually more appropriately classified as an intern. Unfortunately, this claim too likely fails — as internships are also quite closely regulated. Under the FLSA, an individual can provide services without compensation if she is an intern. But an internship or training program will only qualify for this exclusion from the requirement to pay minimum wage if the specific facts and circumstances of the program meet all of the six following criteria:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment; 2. The internship experience is for the benefit of the intern; 3. The intern does not displace regular employees, but works under the close supervision of existing staff; 4. The employer that provides the training derives no immediate advantage from the activities of the intern and on occasions its operations may actually be impeded; 5. The intern is not necessarily entitled to a job at the conclusion of the internship; and 6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. Turning back to our distillery and laborer, let us again examine each of these criteria. Under DOL guidelines, the more an internship is structured around a classroom or academic experience, the more likely it is that the internship will satisfy the first criterion. Suppose, therefore, that our distillery agreed to provide an internship to a would-be distiller who wanted to learn how to separate a distillation run into heads, hearts and tails, the internship involved a heavy dose of instruction in chemistry and was being offered in conjunction with the intern’s enrollment in a university or community college course relating to distilling and for which she was to receive WWW.ARTISANSPIRITMAG.COM  

academic credit. Under these circumstances, it seems quite likely that our internship meets the first of these criteria. But in the context of the bottling party these aren’t really our circumstances. Instead, our intern is probably going to be given a quick course in how to operate some bottling equipment — or possibly how to apply a label on that bottle — and sent on her way at the end of the day. There’s nothing particularly educational or academic about that interaction; our internship likely fails the first criterion. Similarly, it is hard to see how our internship meets the second criterion. Our intern is not the primary beneficiary of her labors — the distillery is. Under DOL guidelines, the fact that the intern may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the protections of the FLSA (i.e., getting paid and any overtime requirements) if the employer is benefiting from the intern’s work. In our situation, the intern can perhaps say that she has a new skill — but how often is she really going to benefit from her newfound ability to operate a bottlefilling apparatus? By contrast, how beneficial was her work to the employer? The relative benefit of the internship appears heavily weighted in favor of the employer. Our internship has failed the second criterion as well. We considered the third criterion when we tried to characterize the bottling party as a volunteer experience. The laborer is intended to perform work that would otherwise be performed by employees. An excellent argument can be made that this is not the sole purpose of the bottling party (a secondary purpose is to obviously create community around the distillery’s brand and deputize new brand evangelists). But this secondary purpose does not change the fact that our intern’s work will — by design — displace employees. So, as with our inability to satisfy this criterion in the context of a volunteer classification, we similarly do not satisfy it in the context of an internship. With respect to our fourth criterion, I can report that many distilleries have told me that having bottling parties does — in fact — impede their operations. Sometimes it impedes them quite severely, as when the helping hands manage to drop full bottles on the floor, apply labels incorrectly or generally cause a ruckus. But this is only half of the criterion — and probably not even the important half. The bigger question is whether the employer actually derives a meaningful benefit from the intern’s work. And unless the distiller has been unfortunate enough to organize the world’s worst bottling party — where everything that can go wrong does in fact go wrong and at the end of the day the distillery is in a shambles, nothing has been bottled and the floor is now wet with spilled spirit, the distillery has probably received some meaningful benefit from the efforts of the intern. If the distillery has received a quantifiable economic benefit from the activities of the intern, we’ve just failed the fourth criterion. With respect to the fifth criterion, we have probably (finally) reached some good news. The intern is almost certainly aware that she is not likely to receive a job offer at the end of this engagement. Assuming that is true, then we will have met our obligation for calling the bottling party an internship. But note that there is a trap

111

Artisan Spirit: Winter 2017  

The magazine for craft distillers and their fans.

Artisan Spirit: Winter 2017  

The magazine for craft distillers and their fans.