LITTLE ROCK – Congressman Tim Griffin (AR-02) issued the following statement after introducing the Children’s Consignment Event Recognition Act (H.R. 3173):
“President Obama’s Department of Labor is attempting to apply decades-old regulations to new and innovative companies like Rhea Lana’s in Conway, and thousands of moms who are able to find high-quality, affordable clothing for their children are the ones most likely to suffer from it. It’s not fair to them, and my legislation would exempt children’s consignment events from these costly, unnecessary and burdensome regulations so that our economy can continue to grow naturally, from the bottom up.”
Rhea Lana Riner, CEO and Founder of Rhea Lana’s Franchise Systems, Inc. praised the legislation:
“I’m grateful to have Representative Griffin stand up for the rights of moms to use their personal time to benefit their families. The entire Arkansas delegation has been incredibly supportive of this important effort.”
The Children’s Consignment Event Recognition Act would exempt children’s consignment events from regulations under the Fair Labor Standards Act (FLSA) and support the continuation of these events that supply thousands of families with low-cost children’s clothing.
Earlier this year, Rhea Lana Riner informed Rep. Griffin that the U.S. Department of Labor (DOL) was auditing her business. Mrs. Riner operates Rhea Lana’s, Inc. whose franchises hold periodic children’s consignment events in more than sixty locations around the nation. At the center of the audit was the issue of whether the consignors at Rhea Lana’s events should be considered employees under the FLSA.
The consignors sign up to volunteer their services to sell their items at the Rhea Lana’s events, in exchange for which they receive early shopping privileges and 70 percent of their total sales. This business model allows consignors to set up and operate these consignment events and to serve brief shifts. This facilitates the sale of low-cost children’s clothing to families.
DOL has allowed for exemptions from FLSA for volunteers who receive minimal compensation for their services. Unfortunately, following their investigation, DOL concluded that these consignors are FLSA-covered employees, requiring substantial alteration to Rhea Lana’s business model and affecting thousands of families that rely on Rhea Lana’s consignment events for affordable children’s clothes.
H.R. 3173 would ensure that these consignors are exempt from FLSA and our nation’s consignment events are permitted to carry on without unnecessary and burdensome government regulations. Reps. Crawford, Womack and Cotton have cosponsored the legislation.