If you are an exotic dancer dancing in an establishment that: (1) requires you to follow rules about appearance and scheduling; (2) requires you to pay house fees; and (3) pays you only in tips, then it is very likely that you are a victim of wage theft and should be classified as an employee, not an independent contractor.
When nightlife establishments misclassify exotic dancers as independent contractors rather than employees, they are likely engaging in wage theft and denying dancers the protections of wage laws. The difference between independent contractors and employees is significant because employees are entitled to minimum and overtime wages, as well as other benefits, under both federal and state laws. Independent contractors, on the other hand, must rely solely on customer tips and have no safety net if business is slow.
Recent cases, involving clubs like the Diamond Club New York City, demonstrate that strip clubs cannot evade wage laws simply by labeling dancers as “independent contractors.”
In the Diamond Club case, Sky Marlene Camacho, argued that she was an employee under federal and state law, and therefore entitled to minimum wage. As a dancer, Camacho was paid only in tips, was not prohibited from dancing at other clubs, made her own schedule, did not attend any meetings, and had to pay nightly “house fees” to the club through a “House Mom.” The club, on the other hand, argued that she was an independent contractor who controlled her own work.
Courts that have addressed whether exotic dancers are employees under federal law have generally found an employment relationship and required nightclubs to pay dancers back pay for unpaid minimum and overtime wages. When faced with this issue, courts look at the relationship between the dancer and the club as a whole and apply the “economic reality” test factors: (1) the degree of control exercised by the employer over the workers; (2) the worker’s opportunity for profit or loss and their investment in the business; (3) the degree of skill and independent initiative required to perfume the work; (4) the permanence or duration of the working relationship; and (5) the extent to which the work is an integral part of the employer’s business. Additional factors may be considered as well if they are relevant to whether workers are in business for themselves or are economically dependent on the employer for work. However, no one factor is determinative, and courts engage in a holistic analysis.
For example, in the Diamond Club case, the judge refused to dismiss Camacho’s claims and found that a jury could determine she was indeed an employee. The judge found:
- Control: Camacho set her own schedule and could work at other clubs. But House Mom still had rules about makeup, shoes, pasties, stage appearances, and penalties for lateness. A jury could see this as significant control.
- Investment: The club invested in the venue, staff, and advertising. Camacho’s expenses for outfits and makeup were minor in comparison. Courts usually find that this factor favors employee status.
- Skill: While dancers need talent and confidence, courts consistently rule that exotic dancing does not require “specialized skills” in the legal sense. “Hustling” for clients is not the same as running your own business.
- Permanence: Dancers can move from club to club, so this factor favors independent contractor status. Still, courts give this factor “modest weight” since many regular employees (e.g., waiters) also change jobs frequently.
- Integral to Business: Exotic dancing is the heart of a strip club. Without dancers, the club would not exist. This strongly supports employee status.
Some notable settlements concerning adult dancers claims for wage theft are: an $8 million settlement for dancers at the Penthouse Executive Club in New York, a $10.8 million settlement for dancers at Rick’s Cabaret in New York, and a $13 million settlement for dancers at Spearmint Rhino in Southern California. These amounts underscore that cheating adult dangers of their pay may result in severe financial penalties.
As employees, exotic dancers are entitled to receive a minimum wage rate for regular hours and an overtime wage rate of 1.5 times their regular rate for hours worked over forty. If you believe your club is misclassifying you or have questions about your rights as a worker, contact the attorneys of Pechman Law Group at 212-583-9500.
