NCPA - National Center for Policy Analysis

California Forces Small Winery to Shut Down

December 29, 2014

California is not known for being business-friendly. Indeed, the Small Business and Entrepreneurship Council recently issued its Small Business Policy Index and placed the state in last place, ranking it as having the "least friendly policy environment" for small business and entrepreneurship in all of the United States.

Scott Shackford of Reason Magazine reports on one such example of a small business struggling to survive in the Golden State. In Castro Valley, California, a man named Bill Smyth owns the Westover Winery with his wife. It's a tiny business that is open for just 10 hours each week and takes in only $11,000 in annual profits. For help, Smyth takes volunteers, whom Shackford says were sort of like interns -- many of them were learning to make wine and volunteered at Westover as a learning experience.

Unfortunately, the state did not see it the same way: California prohibits for-profit businesses from using volunteer labor, and the state charged Mr. Smyth $115,000 for the violation -- an amount it would take his business 10 years to amass in profits.

As a result, Smyth is now closing his small business at the end of this year. Shackford reports that small wineries often use volunteers, but, in response to Smyth's experience, have sent them home.

Source: Scott Shackford, "Wine Workers," Reason Magazine, January 2015.


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