I see what you did there! LOL!
Posted on 01/09/2014 1:14:57 AM PST by Cincinatus' Wife
Ladies and gentlemen, be careful who you volunteer for — you could be doing them a lot more harm than good. The federal government sometimes takes dim view of such generosity.
Just ask Rhea Lana Riner. She owns a small Arkansas-based business that organizes consignment sales. Since August, the Labor Department has been threatening her with stiff financial penalties, saying her business practices are illegal.
It has even been contacting donors to her events and encouraging them to instigate legal action against her.
Why? Well, the department says Riner cannot legally allow the people who provide items for sale to also volunteer at the events — even if they want to. That violates of the Fair Labor Standards Act. Only paid employees can do that.
Riner is fighting back, and on Monday filed a legal complaint against the department with the U.S. District Court for the District of Columbia. The legal nonprofit group Cause of Action is representing her.
Rhea Lana, Inc., hosts what are essentially big semiannual yard sales. People who donate clothing or other items get 70 percent of the profits from the sales of their items as well as first crack at the other merchandise.
The donors also often volunteer at the events, doing things like hanging clothes or working the cash register. This helps to ensure that their items get sold. That’s also what got Riner in trouble with the feds.
In Aug. 26 letter, the DOL’s Wage and Hour Division said the business was in violation of the FLSA because she wasn’t paying the volunteers. The department said no penalty was being assessed at the time, but that any further "repeated or willful violations" of their ruling would result in fines "not to exceed $1,100 for each such violation."
The department ominously added: "Letters have been sent to the consignors/volunteers informing of their private right under the FLSA to bring an independent suit to recover any back wages due."
Rhea Lana's did agree to pay more than $6,300 in back wages to 39 people Riner concurred were not volunteers but independent contractors, but rejected the department's assertion the others were employees.
The department explained its thinking in the case an Aug. 30 letter to Rep. Tim Griffin, R-Ark.: It only allows volunteerism for “religious, charitable, civic, humanitarian or similar non-profit organizations.” Riner’s for-profit business did not qualify.
The letter to Griffin bluntly stated that it didn't matter what the volunteers themselves thought. It cited a 1945 Supreme Court ruling that found that the FLSA must "be applied even to those who would decline its protections." The court argued in that case that if exceptions were allowed for volunteers then "employers might be able to use superior bargaining power to coerce employees to make such assertions."
Cause of Action lawyer Reed Rubinstein called the department’s interpretation absurd in Riner’s case. He argued the Supreme Court’s ruling was meant to apply to people who were already working for the employer and therefore could be exploited with the threat of firing.
That was not the case with Riner’s consignors. They were not required to volunteer, controlled their own schedules when they did and couldn’t be fired or otherwise disciplined since they didn’t work for her to begin with.
"What power does Rhea Lana have over these people?" Rubinstein asked.
It is not clear if the volunteers themselves believe they have been exploited. According to Cause of Action, no complaints had been made by donors prior to the government’s action. Nor were they aware of any of anyone following up on the department’s invitation to take legal action.
I asked the Labor Department if they could cite any examples volunteers claiming to be exploited. A spokesman declined to answer the Washington Examiner’s inquiries on the matter.
The spokesman said only: "The U.S. Department of Labor is not aware of any complaint filed by Rhea Lana, Inc. against the department. However, we will review any complaints filed against us, and will respond accordingly."
GS is a nonprofit
“He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people and eat out their substance.”
The American Civil Liberties Union has ........O wait..maybe they didn’t.
Bump for later.
AOL had a similar problem with volunteers that hosted various groups.
Something like that isn't going to draw attention unless it turns into running a flea market from a neighbor's garage.
Just ask Rhea Lana Riner. She owns a small Arkansas-based business that organizes consignment sales. Since August, the Labor Department has been threatening her with stiff financial penalties, saying her business practices are illegal.
Everyone hates ROMNEY!!
I see what you did there! LOL!
Say NO to the Nanny Statists!
Riner is fighting back, and on Monday filed a legal complaint against the department with the U.S. District Court for the District of Columbia. The legal nonprofit group Cause of Action is representing her.
Are they going after the nonprofit group Cause of Action if their attorney is volunteering his services probono?
I have a case in Fed Tax Court right now where my client paid health insurance, reimbursed expenses, provide meals in the business, and provided housing on premises of the business (a restaurant) and the IRS is trying to deny the deduction for the insurance and expenses as he was “Not Paid as an Employee.” He worked there as an “unpaid employee.”
Note: He was not paid under the table. He lived on his retirement income and did not want the money, but wanted to keep busy.
I think about stories like this every time someone claims America is still based on free-market capitalism.
A three day shut down of ALL businesses nationwide would do wonders to put these enemies of the state back in their designated spaces - one step above McDonalds.
They are not volunteers, they are partners.
Is it 1776 yet?
Why can’t they organize it as a Flea Market?
Everyone pays a space fee, sets up and runs their own booth. Only the fee goes to the organizer. Everyone else is running their own business. The organizer uses the fee to pay for space, advertising and their services in keeping it organized.
Just like a Craft Fair.
What am I missing about how this is run?
“team members”
“What am I missing about how this is run?”
I think a lot of this whole thing is semantics. The whole thing smells of some disgruntled person, whether it be a competitor or customer, who ran to a governmental agency and “alerted” them to this “violation”. After “demanding” that some action be taken, the agency acted as a weapon of the complainant’s vendetta and issued a ruling.
The agency effectively chose not to take any enforcement action per se.
Sounds about right.
30% to the organizer is fair for the use of the venue, the advertising and organization of the space, plus clean up. The vendors couldn’t do that well on their own as the larger event draws more traffic.
Many flea markets and craft fairs charge a booth fee and a commission. High end antique shows and juried art fairs often charge admission, too.
The organizer can easily change the format.
I really hate all these personal grudge-holders who go running to nanny to report someone. Out here, it is Greenies constantly taking complaints and videos to the DNR. DNR finds most of them egregious and without merit and resents the waste of time. Many of the complainers are out-of-staters here for the catch and release trout fishing. They trespass at will and lecture the landowners.”It’s not fair” to deny them the *right* to traipse across private land, sit on private land, camp on private land, all for free and with all the liability on the landowner. One hippy-dip woman took possession of a rock ledge overlooking the river on our property, set up some sort of hanging totem and a rock cairn and was crying when my husband explained that she had no permission, it was our land and we would be liable if she hurt herself, so she was to leave and take her stuff with her.
For instance my niece belongs to a non-profit org for moms and families of multiples, i.e. twins, triplets, quads, etc. Twice a year they hold a kids clothing and equipment sale that is open to the public for purchases but the volunteers; the members of the non-profit, my niece being one of them, organizes, runs and promotes the sales themselves and any of the profits above the % the club member consigners make (and they don’t allow the general public to consign their stuff, only their members) but mostly from the food and bake sales at the event, goes back to the club to support their stated non-profit activities including but not limited to general education and increased understanding about multiple births, support for families of multiples who are in dire financial need, a scholarship fund for kids from multiple families, support for orgs like the Ronald McDonald House in their support for families with multiple babies in NICU, and that which is not sold is donated by the consigners to women’s shelters or given away for free to members in need. They hold their sales at a local church, renting the space for little or nothing or for nominal donation to the church. No one, even the member consigners are making any great personal profit although some members and the public do get some good “deals”, it is often far below the FMV and below what they could sell these items at a for profit consignment shop. My niece used the money from the stuff she sold, clothes and toys and baby gear that her girls have outgrown to buy other stuff for her triplets, in some cases brand new clothes with the tags still on them for a $1 or $2 a piece.
Her company OTOH rents space at a public retail location and advertises these short term consignment sales, both to bring in consigners from the general public who have only a for profit interest and customers from the general public. They are not “donors” but consigners. Part of her business model is that she promises these consigners better and quicker sales as her company sets up and organizes these large short term sales and promotes to the consigners that they will see bigger profits over what they would get from more traditional brick and mortar for profit consignment shops and she, her company advertizes to the general public that they will find bigger selections and better prices. The consigners use her licensed software system and website to log in their items and bar codes and tag them; the consigners get 70% of the sale but she or one of her franchisees gets the other 30% for their “services”. Part of those “services” is to promote, advertize, run the cash registers, provide security, etc. That’s how she or one of her franchisees makes their money. Rhea Lana Riner also makes money by selling franchises and licensing her branded software. She, if you look at her website, is definitely an entrepreneur, not that that’s a bad thing but she is in the business of making money and her endeavors are not altruistic or charitable.
We rent a large space for a few days, say an unused department store. Parents with clothes and children's items to sell sign up online, enter their items into a computerized tracking system and choose their sale price. Then they bring the clothes and other items to the sale location, label them with preprinted price tags and display the clothes. Parents keep 70%; we keep 30%. It is easier than a garage sale, makes more money for parents, and shoppers efficiently find good deals.
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.
The problem with having “volunteers” working for a for profit company are many fold. The consigners are in essence working for a for profit company with the exchange, the “idea and or promise” of getting to shop first. But if one of these “volunteers” say works 10 hours but only sell $10 worth of merchandise at 70%, they are making way below minimum wage while her company is making a profit without the overhead of paying any wages as would a traditional brick and mortar consignment shop that follows and is subject to DOL and IRS rules regarding employees. And the shoppers who volunteer but don’t consign, they aren’t making anything at all, their only “advantage” is in getting first pick of the best stuff and not even with any added discount.
Look at it this way. Suppose Target hired “volunteers” to work on Black Friday. Say Target got these “volunteers” to stock shelves, assist the paying customers and run the cash registers over the Black Friday weekend, and their only compensation or promise of compensation was to get to shop for the best Black Friday Door Busters deals an hour before the store was open to the general public. If they decided that none of the deals were worth it, they basically worked for nothing, if they “saved” $100 but worked 80 hours for that “discount”, which after the store was open that any of the general public could also get that very same deal, most of us I think would think they had been ripped off.
I have worked in HR/Payroll for over 25 years and believe me when I tell you that I’m not a big fan of the DOL. But OTOH, “some” of these rules do protect workers from employer abuse and employers finding inventive ways of skirting around labor and FLSA laws. Now whether we like these laws or not and whether a person has the right to voluntarily work for no wages but for some other form of compensation, that is another question entirely. But currently, that’s not how the labor laws work.
this is a group yard sale, the organizer takes a share for organizing it, we all volunteer and help out, no one except the organizer takes any income unless from selling our own stuff, so she is her only “employee”
This is an IRS grab against middle income people, imho
stealing “jobs” by using volunteers to sell their own stuff? lol!
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