Department of Labor vs. Me
24th June 2013
The business model that parents thought was an innovation, but that Labor sees as a menace, is simple but effective. You might have heard of it: cooperation.
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.
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.
‘All within the state, nothing outside the state, nothing against the state.’ — Benito Mussolini