In April of this year, 11 former dancers from San Jose’s Pink Poodle strip club filed a lawsuit alleging that they were misclassified as independent contractors. They claim they should have been classified as employees, and that they were not paid minimum wage or overtime as they should have been. The women also claim they were denied employee benefits, were forced to pay the club so they could dance there, and were threatened with retaliation if they complained.
By classifying a worker as an independent contractor rather than an employee, employers can get away with not paying hourly wages, employment taxes, or benefits. It also means that they do not have to comply with discrimination laws. Classifying strippers as independent contractors means that a workers’ income comes solely from tips, which are largely reduced because of the fees and fines club owners impose.
Because of these issues, cases are becoming increasingly popular in California and throughout the nation. In 2012, the Spearmint Rhino club in California settled a similar lawsuit for $12.9 million. In 2013, dancers from the Penthouse Executive Club settled their unpaid wages lawsuit with the club for $8 million.
The main California legal test for determining whether an individual is an employee or independent contractor is the “Control Test.” Based on the Control Test factors, the Pink Poodle dancers could be found to have been misclassified as independent contractors if they had specific work schedules, specific times and manners for dancing, regulations for attire and set prices for dances.
A federal judge ruled in September 2013 that dancers at Rick’s Cabaret in New York were improperly classified as independent contractors and should be paid minimum wage as employees. The judge said that the list of rules the Cabaret laid down for the dancers could be described as “micromanagement,” and these guidelines “exerted significant control over its dancers’ behavior.” These guidelines included a minimum required heel height, mandates that tattoos be covered, and specific work hours. Should the court find that the Pink Poodle owners exhibited similar control over dancers, the women bringing the suit may be successful in proving the San Jose club violated California labor laws.