Dept of Labor working against business creation

Perhaps Obama's Department of Labor should be renamed Deapartment of Anti-Entrepreneurship.

From Rhea Lana Riner in USA Today:

As a mother of three who has struggled to stick to a family budget, I know the frustration parents feel as they watch children grow out of brand new clothes seemingly overnight. That's why in 1997, I started a kids' clothing consignment business, a little like the ones that are everywhere now but also a little different.

What started as a small family business operating out of our home has grown to 22 states. Now, though, it might all turn out to be illegal, thanks to the bureaucratic thinking of the Department of Labor.

Help a mother out

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.

More...

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.

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