U.S. Department of Labor Investigates Consignment Business

Sixteen years ago, entrepreneur Rhea Lana Riner came up with a bright idea. Why not create events where moms on a budget could buy and sell second hand childrens’ toys and clothing. They could then use the money to buy needed things for their own kids.

Riner hosted the first events out of her home. Today she helps organize 66 events in twenty-two states including franchises all run from her central website. The events provide an opportunity for moms to buy items at a reduced price and sell their own second hand childrens’ items for extra money. Some moms even volunteer at the events for extra perks like first pick of consignment merchandise.

It seemed like a win-win for moms and Riner herself, who has seen her business grow tremendously…until the government got involved.

The U.S. Department of Labor Steps In

A local television station recently reported that the U.S. Department of Labor is investigating use of volunteers at three of Riner’s locations.

Officials apparently believe use of volunteers at some of the events may violate the Fair Labor Standards Act and that the moms volunteering should be paid as employees.

In a prepared statement released recently, Riner explains:

If the Department of Labor moves forward with this, it would hurt moms everywhere. In this economy, as people are trying to make ends meet and become financially stable again, consigning is a great way to shop that allows moms on a budget to provide for their families.

What This Means

If the Department of Labor classifies volunteers at Riner’s events as employees, other activities and businesses could also be at risk. Implications for even collectively run yard sales and some family businesses are uncertain.

Riner has set up a petition at Change.org and has collected more than 13,000 signatures and counting of support. Watch the video below for more about the service Riner’s events provide.

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