The most litigated issue under the Fair Labor Standards Act (FLSA) is whether an employee is an independent contractor or not. In this article, I would like to briefly discuss the issue of whether or not dancers should be classified as independent contractors.
In the 1980's, Alan Markovitz, now owner of the world famous Flight Club and The Penthouse Club near Detroit, owned a strip club called Tycoons. The girls charged for private dances and they earned that money and were also paid an hourly wage. He did away with the hourly wage and charged the girls a small daily fee as private contractors who were given an opportunity to dance at the club. The girls initially revolted and went on strike but they eventually caved in when they saw how much money everyone could make. With that change, Markovitz revolutionzed the entire strip club industry.
For twenty years dancers enjoyed the fruit of this system. It seemed to be a win-win scenario for both club owners and dancers. However, in recent years, the argument over whether strippers should legally be considered employees or independent contractors has been fueled by several highly-publicized cases of strippers suing clubs over unpaid wages and stage fees/tip outs.
There have been several court cases involving the issue of strippers being mis-classified as independent contractors. In deciding whether the dancers are employees or independent contractors, the courts typically use an "economic reality" test, which contains the following factors:
Does the club exercise significant control over the dancers (for hours and scheduling)? Does the club dictate how long they were required to dance versus be on a break? Does the club require dancers to comply with various rules that were enforced with fines for violations?
In case after case, the courts have typically ruled with the dancers and have found the clubs to have mis-classified the dancers under the rules of FLSA. But nothing seems to change. Despite all the cases filed (spurred on my greedy lawyers in hopes of a windfall class-action case?) and either wins or settlements that favor the dancers - the result is that clubs operated under the existing paradigm.
Are the clubs in the wrong? Probably. Are some dancers un-happy? Probably? Do the MAJORITY of dancers want to be classified as employees? Probabably not. It's an interesting debate. Though the clubs likely are guilty of mis-classification of the dancers, the system currently in place seems to be working for all. Though things could change in the future.

