LITTLE ROCK (KATV) - A popular children's consignment business is being investigated for not complying with labor laws. Rhea Lana's Children's Consignment events started in Conway 15-years ago. It has now grown to 22 states. This year, the Federal Department of Labor concluded they are not following the fair labor standards.
If you have ever been to a Rhea Lana event, you know volunteers are the backbone to its success. Legally, you cannot volunteer for a for-profit business. Here is twist, those volunteers are profiting. So is someone wrong or is this an antiquated law?
Rhea Lana Riner started the consignment events after growing frustrated with the choices for kids clothing at garage sales and trying to figure out how to profit off her kids gently used items.
Rhea Lana is now a household name. She says, "It's just a way of life that helps families save a lot of money."
In 2012 the business model was put under a microscope. Denise Oxley is with the Arkansas Department of Labor. She explains, "At that time, they were utilizing two types of volunteer workers. One I call consigners, folks bringing you their clothes to the event to sell and working the event. We agreed those are not employees. The other type was volunteer workers that agreed to volunteer solely for the privilege of getting to shop early at the event."
The investigation closed with a favorable ruling that all volunteers are consigners who work the events.
It's now the U.S. Department of Labor that has come out stating volunteers are employees. That means the business would have to pay the federal minimum wage of $7.25 an hour to hundreds of volunteers.
Rhea Lana Riner says, "Volunteers are not there to make minimum wage, they are there to get this wonderful value for their family."
She gives a comparison, "With this logic, Build-a-Bear Workshop employs child labor by letting young customers assemble their own teddy bears."
Riner continues, "It threatens our whole business model. We currently are able to give back 70% to our consigners. So the more the government begins to over regulate, that puts more burden on a small business that then we have to pass down and ultimately effect families."
The investigation is focused on Rhea Lana's events in Central Arkansas.
While the investigation is open and Riner continues to defend the business model, it is business as usual.
You can contact your congressman to voice your opinion.