Dancers as Independent Contractors: Good or Bad?

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Fat, drunk and stupid is no way to go through life
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.

23 comments

  • canny
    13 years ago
    The way dancers talk about clubs and the way clubs talk about and to dancers is the same way I talk about my employer and the way my employer talks about and to me. The clubs are misclassifying dancers because they can get away with it. As it is now some clubs fire dancers for all of the reasons that you listed and some don't. Some clubs have revenue splits for dances and some don't. The only thing that could potentially be new is sharing tips between all of the employees instead of each dancer keeping her tips, although with the dancers being required to tip out the bouncers, DJ's, house mom's, etc. they're already splitting their tips with other employees.

    There would be a few huge changes if dancers were classified as employees.

    Because dancers would not have to pay house fees, dancers would not risk going in to work and leaving with less money than they had when they went in because it was a slow night. Waitresses always earn something every day they go in to work while dancers are gambling every day they go into work because on a slow night a dancer will pay out more than she earns.

    Because the owners wouldn't be able to charge the dancers house fees as independent contractors any more, the owners would make up for the lost money by keeping more of what customers pay for dances. Every club is different, but the end result would be the good dancers who rake in a ton of money would earn less and the poor dancers would earn more because they don't do that many dances.

    Dancers would be eligible for unemployment compensation, and the UI system is stacked in favor of the unemployed. Even if you're fired from your job with cause, such as for using drugs or stealing from your employer, in many cases the employee wins the UI hearing and the employer has to pay UI to the former employee.

    Dancers would be covered by workman's comp insurance. Ask the dancers on here how many times they've gotten bruised or wrenched something at work while they were on stage and then had to work for the next week with a limp or take a couple of days off because they couldn't work and you'll see what a huge deal this is. They'd be able to go to the doctor and it would be covered under workman's comp too and despite what you may hear about workman's comp being abused, if you want to recover 100%, workman's comp does not skimp one penny on your medical care because $100,000 in medical care is a lot less expensive than 20 years of being on workman's comp.

    Finally, dancers would pay taxes on a significant amount of their income. Since they're tip based employees they wouldn't be reporting everything or paying taxes on everything that they earn, but they would be paying a significant amount of money in taxes which they aren't paying now.

    It doesn't matter if it's better or worse for dancers to be employees as opposed to independent contractors. What matters is what the law says, and the way the laws are written most dancers should be classified as employees. If that ends up happening, there will be some pretty significant changes in the work conditions for dancers, some good and some bad.
  • inno123
    13 years ago
    In California all dancers must by law be treated as statutory employees. It has not destroyed the industry as some might have predicted. Three systems appear to be common:

    1. The Deja-Vu style stripper pole where you feed the money into the machine and it times things like a high tech parking meter.

    2. Pay the security guy at the entrance of the lap dance area or the barkeep. This tends to have a problem if you want to buy more dances. The dancer has to run back to the front with your money.

    3. Pay the barkeep at the end of the dances. I am not sure what would happen if afterward you had enjoyed more dances than you had money to pay. I would have to imagine it involved and unfriendly exit expedited by the bouncer.

    In all three systems any tips given would appear to be entirely the dancers. I could imagine in an extras club the dancer might have to spiff the security to be sure they looked the other way.

    Still having seen how it works OK I would have to recommend that club owners classify dancers as employees. The lawsuits are almost always lost and the penalties for misclassification are substantial

  • shadowcat
    13 years ago
    I can't disagree with anything that has been said.

    I have just one point to make. It seems to me that in every suit that has been filed, it is after the dancers no longer work at the club. They seem to be just looking for a cash cow.
  • umissedaspot
    13 years ago
    Under normal job circumstances, retaining IC status would obviously be bad for workers. However, a strip club is not a normal business, and trying to make it into one would be bad for everyone. I'd rather keep paying dancers directly, and probably the only dancers who want to regulate that are the ugly ones.
  • Stiletto25
    13 years ago
    I don't know how I feel about the issue in general. Both sides have their positives. It really depends on what kind of dancer you are and how you manage yourself in deciding which way would be better for you. I like being an independent contractor because I rarely show up to work on time and I prefer to decide my own breaks and my own schedule. I also think clubs are shady places and I will often give them a fake address, social security number, and I will spell my name wrong when they ask for these things. That would screw me up if I were an employee.

    On the other hand, many clubs treat dancers as employees without paying them a wage. They call you an independent contractor but then they spring all these rules on you and want you to pay them.

    Its best to find a place you enjoy and a manager you enjoy. Only work when they are working, kiss their ass, slip them some money and go about your business the way you like. Plus if a manager likes you and you do a good job on your shifts, they usually make sure you leave with money. Most of them don't like to see you fail. I've seen managers really checked out because they hate their job and are getting too much pressure from the higher- uppers. They really want to help the dancers but they can't. Sometimes the type of girl who chooses to dance is rather stubborn, high, and an all around dimwit. They don't make money and the manager has to sit there and watch the disaster unfold. She can't tip out or pay house. If the manager likes her, she won't have to pay the whole house. She'll be cut a deal so she doesn't go home empty handed.

    A employee system could help the above scenario and give managers easier firing power over girls who don't cut it but they would often be firing half their staff. Like I said, only half the girls who dance could hold a normal job anyway.
  • Tiredtraveler
    13 years ago
    The next step will the government not allowing cash so they can regulate what you spend you will have swipe a credit card to enter the same as a hotel. The change to "employee" will swap one kind of abuse for another. You won't be able to get rid of a girl because she balloons to 500 lbs, is over 60 or clubs will be forced, under discrimination laws, to hire trannys if they apply. Beware of wolves in sheep's clothing. Every do-gooder has a hidden adgenda. The current system self regulates. Abusive managers loose the best dancers hence loose customers and eventually are replaced. The worst dancers do not get dances and make no money so they leave and look for other employment. If the dancers unionize then the average dancer will look like Larry the Cable Guy.
    In my experience dancers do not stay very long. I used to go to a club regularly for a couple of months then stopped for a while and when I went back, most all new girls I asked a girl that I recognized what gives and she told me that most of the girls either only dance for a short while or move from club to club to find better tippers. She also said that club regulars stay at the club that they are comfortable in but gradually stop getting dances from the same girls and want "fresh meat". She was only staying because she had a several big tipping regulars that would not follow her if she left. While the current system may be abusive to the dancers if they put up with it the other system would be abusive to the customers and the dancers. Customers would play more for less and the dancers would get less period.
  • canny
    13 years ago
    @Stiletto, don't the clubs require you to show them a state issued ID before you start working there so that they don't get charged with hiring underage girls to work as strippers?
  • Stiletto25
    13 years ago
    @che- some do and of course you'd give them that. Sometimes they also make you have a entertainers license. None of my id's have a correct address. I can still lie about the social security. Between you and me :)., only one of my id's has my correct name
  • Stiletto25
    13 years ago
    Oops that was @canny
  • inno123
    13 years ago
    @Tiredtraveller: You can cool the conspiracy theories. As I said in California they are required to be statutory employees and none of the issues you raise have occurred. Also the entire entertainment industry is employees and they have no problem with letting go with substandard entertainers.
  • Club_Goer_Seattle
    13 years ago
    @Tiredtraveler: You made an excellent point when you said, "The current system self regulates," and then gave several examples.

    My observation has been that strip club owners will get away with as much as they can. In this isssue, they will treat dancers as independant contractors when it's to there economic advantage to do so, but also treat them as employees when it's to their benefit.

    In Las Vegas, at Sapphire, this issue has been brewing for several years. Counter lawsuits between the owner and several dancers have been pending for a long time. For some very interesting reading, I recommend a relevant article on the Sapphire situation:

    http://www.lasvegassun.com/news/2010/oct…

    If you're not up to reading the entire article, within it is a website for a "dancers' rights" attorney. On the front screen of his website he lists some items as to what dancers are legally entitled to as part of their jobs. See:

    exoticdancerrights.com
  • Tiredtraveler
    13 years ago
    Yeh but throwing out conspiracy theories is fun and provokes thoughtful discussion. The problem is that no matter which way things go you will have government involvement which means regulation. Most strippers are so screwed up to begin with they will be taken advantage of no matter what. Another question: will workman's comp have to cover STD's from on site extras given? Can you imagine OSHA designed stripper heels?LOL or an OSHA rated condom?? It would be so thick it would make even my dick look big. Maybe the threat of the lawsuit will make the club owners clean up their act. No club wants government scrutiny. The DejaVU clubs are watched because of Larry Flints antics and most are expensive and boring.
  • Tiredtraveler
    13 years ago
    Club_goer I read the article and while there are valid points on both sides I think that the best girls would make alot less and the crappy ones would make more and the customers would be the ones to suffer.

    inn123: No offense I have been in clubs in Cali and found many over priced and with attitude. I have been in clubs where all fees are paid in advance to the attendent and feel no urge to tip afterwards. This is an interesting discussion that my opinion does not matter. While I go to clubs I do not frquent the same clubs with any regularity and one of my pet peeves is when the young regulars get all the attention of the dancers even when they are spending no money.
  • georgmicrodong
    13 years ago
    @Stiletto: "None of my id's have a correct address. I can still lie about the social security. Between you and me :)., only one of my id's has my correct name."

    My gods, is there no end to this woman's intriguing depths? :)
  • LeeH
    13 years ago
    All I know is that the law that prevents the bartender/co-manager from showing me her tits SUCKS !!!!
  • farmerart
    13 years ago
    @Stiletto25:

    Like georg says, you are becoming more and more intriguing the more you reveal here on tuscl. Do you have that 'tease' goin' just as well in the clubs?

    Like you I play around with my name. For me it started because of security worries in my business which is filled with spies, thieves, cheats, liars, and crooks. I also used numbered companies and lawyer cut-outs. Now that I have a buck or two, this life-long obsession with ID security is serving me very well.
  • jackslash
    13 years ago
    Have you verified that Alan Markovitz was the first club owner to go to the independent contractor system? I know that Alan claims he invented this system, but he also claims he invented the pimp mustache.
  • JuiceBox69
    13 years ago
    Uuuuuuhhhhhhh
  • she_is_covfefe
    13 years ago
    I prefer to be an IC as long as a club treat me as such. I know a club that is very strict about schedules, the way dancers dress, and how they should interact with their customers; if I had stayed in that club for over six months, I would had taken them to court to fight for employee rights.
  • TonyMontana
    13 years ago
    If you want to be a club employee, welcome to taxes.
  • she_is_covfefe
    13 years ago
    ^You also have to pay taxes as an IC, but instead of paying taxes, I got lots of money back. Hahhahahaha!!!!
  • 10inches
    13 years ago
    the problem really comes down to how greedy the club owners have become. some of the dancers that I have talked with say that the club fees have gotten way out of hand. tip outs to the club, house mama, dj, security and wait staff total almost a $100 a shift in some clubs. add the late fee or leave early fee and it can get totally ridiculous. the clubs are making tons of money off the girls yet won't take any of the financial risks involved in a slow night.
  • jackslash
    12 years ago
    Our nation's only unionized strip club is closing. The dancers are part owners and earn an hourly wage, but this has not worked out for them. One dancer said that recently she "has earned about $11 an hour."

    http://www.baycitizen.org/labor/story/na…
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