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Customer or Employee? (or, is Build-A-Bear employing child labor?)

Old 06-24-13, 10:16 AM
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Customer or Employee? (or, is Build-A-Bear employing child labor?)

A woman has a children's clothes consignment business. She operates in 22 states.

Essentially, she rents out space for pop-up-events. Parents of children who have outgrown their clothes can sell at these events. If you're a seller, you name your own price, and there's a 70/30 split between seller and the business.

To help set up these pop-up-events, the business uses volunteers. These volunteers are rewarded with the opportunity to shop before the event officially opens. These events only last a few days. So for people who want the first shot at the best merchandise, volunteering to help set up means you'll have the most choices.

The business says these volunteers are customers. The Department of Labor says these volunteers are employees. As employees, they must be paid at least minimum wage and IRS paperwork must be filled out.

On who's side are you? Do you think these volunteers are customers of the business? Or are they employees/independent contractors?

The business owner says by this logic, "Build-a-Bear Workshop employs child labor when it lets its young customers assemble their own teddy bears."
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Old 06-24-13, 10:58 AM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Her argument is terrible, but I hope it holds up in court. I'd love to get paid minimum wage every time I walk through a salad bar or pump gas.
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Old 06-24-13, 11:29 AM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Great, now the teddy bear assembly union is going to go after Build a Bear... my daughter will be crushed.
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Old 06-24-13, 12:22 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

If they are employees then they are employees who are about to go on a shopping spree buying second hand clothes with their own money. That doesn't sound like an employee.
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Old 06-24-13, 12:53 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Somebody needs to open a Build-A-Real-Doll franchise. I guarantee it would be a smash.
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Old 06-24-13, 01:48 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by Mabuse View Post
If they are employees then they are employees who are about to go on a shopping spree buying second hand clothes with their own money. That doesn't sound like an employee.
Most retailers offer employee discounts. I'm not saying these people are employees, but I don't think your observation resolves the question.

Something about the people in the story seems different to me than Build-a-Bear, but I can't put my finger on what it is. At the same time, something about the people in the story also seems different than a guy with a job at the Gap, and again, I can't put my finger on what it is. Maybe it has something to do with how much control the business exercises over the volunteers? If I volunteer and then don't show up, is it more like failing to show up for my shift at the Gap or is it more like deciding not to go to Build-a-Bear (as a customer)?
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Old 06-24-13, 02:02 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Yeah, sorry, it would be quite easy to sit down and draw up a number of massive distinctions between this woman's business model and a Build-a-Bear business. One easy one is this. At Build-a-Bear, the customers are paying specifically for the experience of building their own teddy bear using provided materials. That is explicitly what they are paying for. In the other example, the volunteers are providing labor gratis in exchange for a perk of having first grab at buying used clothes. In essence, those volunteers are being paid, but not with wages, to provide labor.

The fact that the business in question is for-profit makes a substantial difference as well I suspect. If these clothes were being sold with proceeds going to charity and the volunteers were provided the same perk, I doubt she would have received the same level of DoL scrutiny.

Without knowing more, I think I am inclined to side with the DoL on this one.
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Old 06-24-13, 02:31 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

I wonder how many hours these volunteers work. I'd imagine that it's a couple hours, taking stuff from bulk piles and arranging them by age and gender and inspecting to see that "gently worn" is true and the stuff isn't stained and torn.

Completely making this up, but let's just suppose that a "volunteer" would spend 4 hours sorting and inspecting per event. $7.25 per hour, four hours, take out 15-20% for taxes ... probably about $25. And this probably isn't a recurring gig. I can't imagine this happens more than once per year at a given site.

Perks/pay aren't mutually exclusive, but let's suppose they were. If you gave the "volunteers" a choice:

..... help set up early, get the first crack at buying stuff

-or-

..... help set up early, fill out some paperwork, go through E-verify and submit to a background check, get mailed another W-2 at the beginning of the year, file more paperwork with the IRS, get twenty five measly dollars and go to the back of the line to shop at the same time as everybody else who didn't volunteer

how would most people decide?

If the "exploited" volunteers are complaining, then look into this. Otherwise, this just seems like a huge waste of time.

Last edited by RoyalTea; 06-24-13 at 02:38 PM.
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Old 06-24-13, 02:49 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

and if the "exploited" volunteers were complaining, then there probably wouldn't be any volunteers.

I want to say that this is just a way for the government to make some money, but is it? If she has to pay her "volunteers," wouldn't that be an additional expense that cuts into her profit? Sure, the government would be making more money on taxing this income, but would it be enough to counteract the taxes lost to lower profits to the business?
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Old 06-24-13, 03:14 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Well, I'm guessing somebody complained, otherwise the DOL probably wouldn't have gotten involved.
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Old 06-24-13, 03:18 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by Groucho View Post
Well, I'm guessing somebody complained, otherwise the DOL probably wouldn't have gotten involved.
Probably someone who didn't get the good stuff because they didn't want to go early to help set up.
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Old 06-24-13, 03:23 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

That's probably an accurate theory.
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Old 06-24-13, 03:26 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

And there are illegal immigrants who would pick lettuce for $2 an hour with no breaks and not complain. That doesn't mean that it should be legal.

Not that I would ever really compare back-breaking exploitation of illegal immigrants with this example. I'm simply pointing out that the willingness of someone to engage in an employment activity does not necessarily invalidate legal scrutiny.
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Old 06-24-13, 03:30 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Or maybe nobody complained and this information was ascertained by snooping on emails and cell phone calls.
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Old 06-24-13, 03:39 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

While this is not the most dastardly deed, I've ever heard, it certainly deserves the scrutiny it is receiving.

The situation as set up is basically an exploitative way for the proprietor of these pop-up for profit retail events to avoid having to pay to staff them.

The Build-a-Bear analogy is simply wrong for many reasons including those already mentioned here.

A more appropriate analogy would be if Live Nation staffed concerts with "volunteers" that were not paid a wage, but got to listen to the concert for free by volunteering. Would there be fans of the performing bands more than willing to walk around during the concert hawking merchandise and beer or fans who can't afford or get a ticket that would be willing to man a concession stand just to be there? Sure.

But, that doesn't mean that they aren't working for Live Nation under the law. As someone pointed out, these "volunteers" are being paid. They are being paid in the opportunity to shop before others. Also, with this being a for-profit operation, I am unsure how likely it is that these "volunteers" can claim deductions, fulfill professional/work-related community service requirements, or accrue other benefits normally associated with charity work.

Even if this matter got before the DOL b/c of some disgruntled shopper who missed out on the best Elmo tee-shirt, it deserves the scrutiny it is getting and I would not be surprised or appalled if the DOL determined these volunteers were actually employees. The practice is exploitative.
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Old 06-24-13, 04:02 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

The Live Nation example would affect customer service. If I'm paying money for a concert and I want to head over to the snack bar to buy food and drink, I want the person behind the counter paying attention to me, not half-assing it because they're in love with the song being played. It doesn't sound like there's any customer interaction with the consignment business.

And how many concerts/events does a typical Live Nation venue have per year? 50? 100? 300? Do you think it's worth it for them to train a new set of "volunteers" for each concert, or to properly vet their background to make sure they've got the necessary experience? LiveNation would probably be taking on much more of a risk getting different randos to handle cash transactions for each different concert.
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Old 06-24-13, 04:34 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Businesses won't stop until we're all free labor in some way. I resent the self-help check outs at grocery stores.
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Old 06-24-13, 05:34 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Who wants to volunteer for a for-profit business? Yeah, I read the article and can see the point of it in this case, but it sets a terrible precedent. McDonalds has already been tagged for paying employees in debit cards. I can only imagine how wal-mart would treat "volunteer" employees.
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Old 06-24-13, 06:21 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

This is why money should always change hands. Build a bear is selling the experience of building your own bear. This company ought to charge the people $1 for the experience of helping to set up and getting in line first. I'd think most would still pay $1 if they got the good stuff first.
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Old 06-24-13, 08:46 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by kvrdave View Post
This is why money should always change hands. Build a bear is selling the experience of building your own bear. This company ought to charge the people $1 for the experience of helping to set up and getting in line first. I'd think most would still pay $1 if they got the good stuff first.
I see I'm not the only one here who has read Tom Sawyer.

Anyway, this whole thing is absurd. The government should stay out of it.
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Old 06-24-13, 08:49 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by Pizza View Post
Businesses won't stop until we're all free labor in some way. I resent the self-help check outs at grocery stores.
Beats waiting in line when you've got two items and the lady in front of you has two carts full.
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Old 06-24-13, 10:28 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

How is this any different than college interns working unpaid at a business? Wizard World comic book conventions use volunteers to help run their cons in exchange for free admission into the con while they are not volunteering. Is that any different?
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Old 06-24-13, 10:30 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by grundle View Post
I see I'm not the only one here who has read Tom Sawyer.

Anyway, this whole thing is absurd. The government should stay out of it.
The government protects its own like Apple protects its patents. If they give an inch, they think they have lost. And they can't lose control of their people who might not pay for the right to be beholden to them because it might spread.
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Old 06-24-13, 10:35 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by RoyalTea View Post
The Live Nation example would affect customer service. If I'm paying money for a concert and I want to head over to the snack bar to buy food and drink, I want the person behind the counter paying attention to me, not half-assing it because they're in love with the song being played. It doesn't sound like there's any customer interaction with the consignment business.

And how many concerts/events does a typical Live Nation venue have per year? 50? 100? 300? Do you think it's worth it for them to train a new set of "volunteers" for each concert, or to properly vet their background to make sure they've got the necessary experience? LiveNation would probably be taking on much more of a risk getting different randos to handle cash transactions for each different concert.

This situation affects the customer experience as well. Do you really think people who shop at these pop-ups want to go through picked over stock simply because they didn't volunteer?

This is a very slippery slope. People bitch about Twilight Time letting people buy multiple copies of Christine on Blu-ray. Now imagine if everytime you wanted to purchase something limited or for a discount you had to work for the company selling the product just to be able to get the opportunity to pay full price for it.

This person is merely getting around hiring actual staff and should be investigated accordingly.
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Old 06-24-13, 10:44 PM
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Re: Customer or Employee? (or, is Build-A-Bear employing child labor?)

Originally Posted by movieguru View Post
How is this any different than college interns working unpaid at a business? Wizard World comic book conventions use volunteers to help run their cons in exchange for free admission into the con while they are not volunteering. Is that any different?
I always found the idea of unpaid internships disgusting.
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