Thursday, June 20, 2013

Conway consignment business, Rhea Lana's, targeted over wage law compliance

Posted By on Thu, Jun 20, 2013 at 6:33 AM

UNDER SCRUTINY: This is part of webpage for Rhea Lanas, a consignment sale business being scrutinized for use of volunteer labor.
  • UNDER SCRUTINY: This is part of webpage for Rhea Lana's, a consignment sale business being scrutinized for use of volunteer labor.

Fox 16 reports on a federal Labor Department investigation of a children's consignment sale business, Rhea Lana's, over its practice of using volunteer workers to set up sales. In return, they get first crack at merchandise.

Fox 16 notes that the business, headed by Rhea Lana Riner of Conway, had entered a consent agreement earlier with the state Labor Department not to use volunteer workers. Riner contends the volunteer workers are legal and says they are an important part of her "business model." She operates in 22 states.

Yes, free labor is undeniably a good business model.

Riner got space in the USA Today opinion columns to defend herself yesterday. The notion of a requiring a minimum wage for labor in behalf of a profit-making business such as hers is outmoded, she argued.

A big part of our success are the hundreds of parents — both consignors and shoppers — who voluntarily work brief shifts to help set up before the sale starts. In exchange, these parents get to shop first with more choices and better merchandise.

In January, though, the Department of Labor noticed all this cooperation going on. Months later, investigators concluded that volunteers are "employees" under the Fair Labor Standards Act.

This means paying the federal minimum wage of $7.25 per hour, filling out IRS paperwork and complying with who-knows-what other rules. And all for a pop-up business that lasts days.

Think about that for a second. I've offered regular parents the same opportunities that eBay gives independent resellers. When I do it in the real world to recycle used clothes, the Department of Labor says no way. That's bunk. My volunteers are not employees or independent contractors. They're customers.

By this dreadful logic, Build-a-Bear Workshop employs child labor when it lets its young customers assemble their own teddy bears.

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