More and more these days, Lexington-area residents are getting into distilling their own bourbon at home. Sometimes the drive is so strong people decide to start their own proper distilleries, and they can become hip enough that a lot of people want to work at them. These can be fun places to work, but there are certain state and federal labor and employment laws that both distillery entrepreneurs and their employees need to know.
Here are four important employment law requirements that distillery owners and their employees need to consider:
1. Minimum Wage
Effective July 1, distilleries will be allowed to have on-site bars. This will provide an opportunity for an additional revenue stream, but it also makes it that much more important that bartenders earn at least the minimum wage under state law and the federal Fair Labor Standards Act.
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Although bar staff may perform other functions at a distillery in regular hourly or salaried roles, a different set of regulations will govern them when they work behind the bar. Bartenders are tipped employees and, under Kentucky and federal law, make a minimum of $2.13 an hour, plus tips.
If employees are short on tips that day, their employer is legally required to compensate their loss by boosting their average hourly rate up to a total of $7.25. Also, owners are not allowed to claim individual or pooled tips that belong to tipped employees as revenue for the larger distillery business or as income.
Non-exempt employees — hourly employees in non-managerial roles — are to be paid time-and-a-half for each hour worked in a given week over the 40-hour standard, under the FLSA, which Kentucky’s laws mirror.
The hours for distillery work often run long, due to machinery that runs overnight and requires monitoring to ensure the quality of the product being produced. However, should business functions cause a non-exempt employee to work for a full seven-day period, he or she must be compensated with time-and-a-half pay for work performed on the seventh day.
3. Workers’ Compensation
Last year, an over-pressurized still exploded at the Silver Trail Distillery in Hardin, killing an apprentice. Despite the glamour surrounding the perception of the industry in the media, a normal distillery still carries out the functions of a factory. Factory work remains one of the most statistically dangerous industries in the nation. As such, under Kentucky law, it is legally mandated that distillery owners carry worker’s compensation insurance for their workforce.
The Department of Worker’s Claims is the agency tasked with assessing compensation claims filed by employees, and on its website provides a wealth of information and necessary forms for filing a claim.
Distilling is a century-old industry in Kentucky, with generations carrying on legacy businesses in the family name.
Although the hiring of family and friends is legal, discriminating against those who do not fall under this banner is not. Under the Kentucky Civil Rights Act, it is illegal for an employer to discriminate on the basis of race, color, age, creed, disability, or whether or not a person is a smoker or non-smoker when not performing job functions.
This means, for example, a distillery owner can’t refuse to hire a woman to take on the task of processing heavy, barrel-aged vats of bourbon just because she’s a woman. It is illegal, under state law, to discriminate against an employee based on their gender should they be physically capable of performing the job at hand.
It’s good for both a distillery owner and workers to be aware of these requirements. However, there are [more things to know about regarding pay, discrimination, and other labor and employment issues that we discuss on our employment lawsuit website.