Family-owned consignment business owners often think they’re under the radar. All can be well and good until that business success runs sideways with Uncle Sam. Ask Rhea Riner, who’s been fighting U.S. Dept of Labor laws since 2013 for the ability to keep part of her successful business model. What did she do that’s so wrong? As she explains it, “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.” (See https://www.forbes.com/sites/realspin/2017/02/24/arkansas-mom-takes-on-department-of-labor/#19ea575d4c3b. )
Think about it. The parents receive the benefit and are happy with it. It’s probable that the deal Ms. Riner offers them is a better financial deal than the $7.25/hr the federal government thinks they deserve. Of course, that’s depending upon how well they shop.
Fast forward to 2017, and Rhea Riner has taken her case before the U.S. House Education & Workforce Committee’s Subcommittee on Workforce Protections.
“What does this have to do with me?”, you might ask. “I’ve two part-time employees and one full-time.” That’s true, and you probably don’t have the time or funds to take on Washington after paying the fines for that great compensation idea which your employees may love and Washington may hate. What do these “great” compensation ideas look like?
Maybe you have a handful of helpers that you’re paying with a 1099 that really don’t work anywhere else but for you. You’re happy because the paperwork is simpler. They’re happy because they don’t have money taken out. The government? Not so happy because they’re missing out on payroll taxes.
Maybe you allow an employee to “float” hours from one week to the next “as long as you work 80 hours in 2 weeks”. The employee’s ecstatic because that flexible schedule allows him to share the childcare with the spouse. You’re happy because you’ve saved overtime pay. The government? Not so happy because they’re missing out on payroll taxes.
Possibly you have a self-rewards bonus that just happens to coincide with an overtime workweek.
You’ve spent a lot of time building up your business. Doesn’t it make sense to protect your future success by choosing the right business partners?
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