independent contractor or employee

Strippers & Exotic Dancers: Independent Contractors or Employees?

Answering the issue of whether strippers and exotic dancers are independent contractors or employees, in a case entitled Thompson v. House, Inc., the United States District Court for the District of Columbia ruled that exotic dancers in a Washington, DC gentleman’s club were employees and not independent contractors. The judge ruled that the gentleman's club did control the activities of the dancers sufficiently to evidence an employee/employer relationship.

The dancers were paid by the hour, earned $30-50 per hour and usually worked four shifts of ten hours per week.  The club also maintained a number of work rules and forced the dancers to pay the club and the disc jockey.  The dancers were also penalized for calling in sick or being tardy.  These are all evidence of “control,” which cuts against independent contractor status.

There have been a number of similar lawsuits under the FLSA and virtually all of them have resulted in findings of employee status for the strippers.   If you believe that you are being improperly classified as an independent contractor, please contact us.  We can help.

Independent Contractor vs. Employee -- Exotic Dancers Recover $1.55M in Misclassification Case

Independent Contractor vs. Employee Exotic Dancers Recover $1.55M in Misclassification Case

Clincy v. Galardi South Enterprises, Inc. was brought by a group of exotic dancer/entertainers who alleged that they had been misclassified as independent contractors rather than employees. The Defendants required that the dancers pay a fee to the club for the privilege of dancing as an independent contractor.

The trial court explored the question of whether the dancers were employees or independent contractors under the FLSA and ruled that the dancers were employees rather than independent contractors.  Prior to the trial on the second issue, the defendants settled the action. They agreed to pay a $1.55 million settlement to the class of strippers.

Ultimately the employee versus independent contractor issue is a complicated one.  Courts often rule based on a variety of factors including (1) the nature and degree of control over the work, (2) the employee's opportunity for profit or loss depending on her skill, (3) who pays for equipment, (4) whether the services require special skill, (5) the permanency and duration of the working relationship, and (6) the extent to which the services are integral to the business.

In this case, none of the plaintiffs were paid any direct wages by the club in which they worked.  Instead, they paid defendants for the right to perform in their club.  The plaintiffs’ each were required to sign independent contractor agreements as a prerequisite to beginning work for the defendants.  Defendants claimed that the dancers were independent contractors because they were paid directly by customers and did not receive paychecks.  They also claimed that the club did not profit from the dancers and that the dancers did not necessarily drive the club’s business.  However, based on evidence that the defendants set the prices for tableside dances and the amount of gross receipts dancers were required to turn over in the form of “house fees” and disc jockey fees, as well as the fact that the defendants set specific schedules for the dancers, created rules of conduct (subject to discipline), check-in and check-out procedures and otherwise controlled the method and manner in which plaintiffs worked, the court held that the defendants were plaintiffs’ employers under the FLSA.

The take home point is this – just because your employer calls you an independent contractor, that does not necessarily make you and independent contractor.  This is true even if your employer makes you sign an “independent contractor” agreement.  If you think you may have been misclassified as an independent contractor, contact us for a free initial consultation.

Click Clincy v. Galardi South Enterprises, Inc. to read the entire opinion.

 

 

Independent Contractor or Employee?

Independent Contractor or Employee? Far too often, employers erroneously misclassify individuals as independent contractors or employees.  In an attempt to save money, many businesses use independent contractors to serve functions typically served by employees. Classifying someone as an independent contractor often means the business does not have to pay minimum wage or overtime to the individual.

In determining whether someone is an independent contractor or an employee the U.S. Department of Labor uses what is known as the "Economic Realities Test," which contains the following factors:

  • the degree to which the person's work is controlled by the organization;
  • the individual's investment in facilities and equipment, if any;
  • the individual's opportunities for profit or loss, if any;
  • the amount of any initiative, judgment, or foresight the person uses in open-market competition;
  • the permanency of the relationship; and
  • whether and to what extent the individual's work is an integral part of the organization's business or activities.

If you have any questions about your classification as an independent contractor, please contact us for a free initial consultation.