Conway business owner Rhea Lana Riner, who operates large scale children’s consignment events, says she will fight the U.S. Government’s claim she is in violation of the Fair Labor Standards Act.
Riner, owner of Rhea Lana’s Inc., debuted her fight with the U.S. Department of Labor in a USA Today column published Tuesday.
Rhea Lana’s consignment events are put on in 22 states, including Arkansas, where Riner said she started the business in 1997 out of her living room in Conway.
Her practice of allowing consignors to shop first and early to get the best merchandise in exchange for their work to set up the two-day event in an available venue was subject to a Department of Labor investigation that began in January, she said.
“I’d say we have about 1,200 consignors and probably 200 volunteers,” Riner said. “They partner with us in holding our events. When they use their personal time to work at the event, the incentive is that they can shop early. They find great value in that.”
She likens the events to a large garage sale, but families join together and hold the sale under one roof.
Congressman Tim Griffin submitted a letter in support of Rhea Lana’s practices to the U.S. Department of Labor in February.
Griffin expresses concern in the letter that the investigation and audit was “unnecessarily requesting to interview consignors who assist with the sale of items (including their own) at Rhea Lana’s events, and inaccurately identifying these individuals as employees.”
Griffin wrote that Rhea Lana’s depends on the unpaid volunteers to work the events, and the events provide essential low cost products for individuals and families.
The federal audit requested Rhea Lana’s supply a list of names and contact information of consignors, “presumably to conduct interviews,” Griffin wrote.
“We don’t force them,” Riner said Thursday. “They come when they want…It’s totally their decision if they want to come work with us.”
Ultimately, the Department of Labor found the consignors or volunteers are in fact employees under the Fair Labor Standards Act, she said.
Consignors would need to be paid minimum wage if the findings stand, and Riner’s business model would have to change.
“When the government puts these additional rules on a small business like ours, we eventually have to pass it on to moms and families,” she said.
Riner said her business is still “in the midst of the process” in the federal audit, but it’s “business as usual.”
She declined to comment on possible future litigation, but said, “We are continuing to defend our business model.”
The Arkansas Department of Labor audited Rhea Lana’s two years ago, Riner said, but the business was given a favorable ruling.
Rhea Lana’s is set for a local event at the Conway Expo Center August 25-31.
The business was setting up for an event in Honolulu, Hawaii this weekend.
(Staff writer Courtney Spradlin can be reached by email at email@example.com or by phone at 505-1236. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)