Strippers: Employees or Contractors?

This case is a big deal for many industries including strip clubs. California Supreme Court describes the ABC test for determining valid independent contractor status versus default setting of employee status as:

"Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if
the hiring entity establishes:
(A) That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under
the contract for the performance of such work and in fact;
(B) That the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

C works in the club's favor. A and B do not.

I think all 3 work in some favor to the clubs. With A, the dancer can choose who she dances with and can decide what happens in the dance. Though she likely has to perform on stage, she can perform any routine she wants or barely any routine at all and she wouldn't necessarily have to get naked (too many times I've seen girls not take their clothes off when they aren't getting tipped).

B and C are fine if the club treats itself like a bar that sells beverages and alcohol.

^@Liwet

Agreed that A works in club's regarding floor dances and private dances and what the dancer does or doesn't do in those dances. But I think A works against club in regard to dancer scheduling and fining dancers for not showing up and also in regard to main stage dances where dancer has to get on stage when called.

As for B, you have a point with B working in club's favor with the club pitching itself as a bar that sells alcohol or not and just so happens to have a stable of independent contractor dancers that strip their clothes off, but vulnerability there is that clubs call themselves strip clubs not bars.

As for C, stripping has been conducted for decades an established independent occupation and that works in club's favor but under this court ruling the historical distinction breaks down if the dancer works at only one club and doesn't do bachelor parties on the side or work for multiple clubs.

They are (in general, exemptions may apply under special or specific instances) independent contractors governed by specific work conditions specified by the establishment. Remember (for the most part) they pay ownership for the right to work there (house fees) and split the profits on certain revenues (drink fees, dance fees) and in general are given a gratuity (tips) by customers for services offered.

People will find ways around this test, both for strip clubs and for other industries.

SJG

I don’t agree with the more common acceptance that A works against the clubs, I’ll give you a common example from the construction industry.
Let’s assume that you are a tradesman with many employees, you get a job that you don’t have the manpower to complete at the moment, so you hire another company that has more employees than scheduled work. Your arrangement with them is for a flat fee your sub will provide X employees to the jobsite during specific hours for a flat fee. Your sub assumes the costs associated with those employees and you get the benefit of the work product, you pay your sub the agreed amount and he provides you with a certain amount of finished product, taking his profit from the difference between what you pay for product and his cost to produce that product. It is complicated but just because you must adhere to certain rules doesn’t negate the fact that my sub cannot be classified as an employee.

^@Impala

For sure strippers have historically been independent contractors and you make good point about working conditions and payment of house fees that will be in club's favor. The tip thing won't work in club's favor - by analogy, waitresses get tips for service provided at restaurants and they're definitely employees not contractors, at least in Calif.
What's going to happen in California resulting from this court decision is that labor lawyers are going to gather strippers (especially strippers no longer working at particular club) and file class actions seeking all sorts of damages: overtime wages, wages for unpaid rest breaks and meal breaks, and Labor Code penalties for nonpayment of wages and not providing itemized wage stubs. The hammer in California is that if the stripper wins and is retroactively classified as employee, then club will get nailed for not just the wages but the class action attorneys fees. Wage litigation in California is the new asbestos - this is going to be a big deal.

There are going to be lots of court cases. But I am still confident that would be gig employers will find ways to operate under the new rules.

SJG

There was a class action lawsuit a few years back against Christie's if my memory is correct.

Most of the dancers decided it was not in their best interest to be considered employees ( I don't recall the reasons) and legal action was brought as I recall because a dancer fell on stage and the club would not cover her medical expenses.

^@25

You are correct the construction industry is mostly exempt from this court ruling, and that's primarily because exempt construction subcontractors have licenses allowing them to engage in construction trades, but if one of those licensed subs tries to treat its own non-licensed workers as contractors instead of employees then that sub is going to get nailed for misclassifying those non-licensed people as contractors instead of employees.
Now, if the stripper has a work permit issued by a city or county that requires dancers to have permits, that's going to help the club in the analysis but a permit like that is just a local thing and not a state issued license that will immunize the club from the contractor versus employee distinction.

What actually surprises me is that (especially in California) that stripper (I'm sorry, dancers) haven't unionized.

Here's what's a little scary. FOSTA has shown that people are totally okay with online sectors of the adult industry being shut down via a very broad law.

Labor laws could easily used to do the exact same thing in real world settings.

Maybe so but my point was it is the customer that actually makes the rules just like in the adult industry. A stripper dancing in a club that’s closed will not make any money, and hours are dictated by the flow of commerce, additionally the rules are a mix of good business practices and government regulations so I just don’t find the employee side of the argument very compelling.

^^^That was in reply to DTS

It'll be interesting to see whether clubs can successfully lobby legislators to have state government create an agency that licenses dancers in the industry to immunize clubs prospectively from this court ruling - that would probably fix it but I'm guessing that, especially in light of Fosta-Sesta passing, there won't be a lot of legislators lining up to vote yes on that legislation.

@Impala: "What actually surprises me is that (especially in California) that stripper (I'm sorry, dancers) haven't unionized."

That would be quite a group of cats to herd.

In SF they have a guild, had it for decades now.

Sometimes their guild has parties with the bicycle messengers guild.

SJG

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I would be skeptical regarding strippers having the organizing ability to form a union.

In order for this to become prevalent in the strip club industry - won’t it require a few strippers to bring lawsuits? That will require organization and coordination.

To have an actual union, where the employer is obligated to negotiate with it in good faith, there is a federal certification process it has to go thru. Usually then there will be a strike to get the employer to agree to a contract.

This is not going to happen.

But in SF strippers do have a guild.

It was also a workers guild which had owned the now defunct Lusty Lady, old style behind glass shows.

SJG

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in short... the lawyers win big.

California is the most employee siding in its courts. So it is likely that other states will start to follow. So yes, there is a huge new demand for lawyers.

But on the other hand, the idea is to be getting retroactive fairness for these who have been miscategorized as contractors.

I am confident that contractor status will continue, it just has to be done more carefully.

Historically in San Francisco, they sustained contractor status by having a talent agency, and rotating dancers between clubs.

SJG

In the best of UHM places, the women just do it the way they want.

"(A) That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under
the contract for the performance of such work and in fact; "

And this favors front room makeout session, plus anything else one might want.

:) :) :)

SJG

Sometimes in our underground circuit, they've taken the position that the dancers are not employees or contractors. They are either customers or contest participants.

Does that peek your curiosity, women who are completely free agents?

SJG

I've always thought of strip clubs as being similar to real estate rentals where the stripper is entering into a short term lease to have a place to perform their services. Management has the right to enforce rules, just as a landlord can enforce terms of a lease.

A little off topic, but I'm wondering how this will affect the gig economy in CA when it comes to Uber and Amazon Flex. I'm thinking that those companies will definitely be able to find loop holes around this whole thing. If they don't, it could mean big changes. Especially for Uber.

If Amazon Flex is a delivery company, this new California case applies because that case involves a delivery company that hired delivery drivers as independent contractors. I know nothing about the Uber business model, but as justme62 said with the lawyers winning big you can bet the lawyers will be looking into it on Uber and other gig economy businesses

On the plus side, it gives bitcoin a platform to support its legitimacy.

A simple distinction would be a strip club considering the dancers to be whores who show off on stage (but don’t dance).

-->"What actually surprises me is that (especially in California) that stripper (I'm sorry, dancers) haven't unionized."

Well, I can't resist making a snarky comment about how that would require organization, forethought, etc.

Of course, I also think that this is a case where the girls may well know more than we give them credit for. I've seen the girls have intelligent conversations about how unionizing might well make things worse for them, particularly the high earners. I reckon they're right.

We did have a unionized strip club in SF; although not just union, but the girls themselves bought out and ran the club itself. It was a disaster, and the club seemed to focus on everything but trying to understand what strip club customers want. They were dismal even in comparison to the unspeakably crappy deja vu clubs around them, and that's saying something

In Maryland the girls were ruled to be employees, not contractors, at particular clubs in Baltimore County, if not the City. Club can decide who works when, require a work card, slap on particular work rules (eg pasties, no touching the customer during laps, etc.) and can take bigger chunks than usual out of their tips, and do on.

Roadworrier, same with one of the clubs here that was forced by a lawsuit (I think it ended in a consent decree) to treat the girls as employees. They are able to add a LOT of rules that the other clubs are staying clear of; in addition, costs for management have gone so sky-high (the girls have health insurance, for example) that they had very little room to maneuver as far as prices, which have since driven the club out of business (or rather, a once-glorious club became a shadow of its former self, and eventually had to sell to Deja Vu).

In short:
- It was practically an apocalypse for the girls. Their revenue plummeted, they have a ton of work rules no one else in the city had to deal with... but hey, they had healthcare (which I assume cost them a fortune)
- It was a disaster for customers. The club that IMO was the best strip club ever to exist in the US, became too expensive to be a reasonable choice for most of us, the subsequent drop in stripper revenue resulted in quality plummeting, and in the end, Deja Vu's corporatized McDonalds-of-strip-clubs horrific customer experience was actually the best choice. Sigh.
- It was a disaster for the owners, who had to sell a storied strip club to the evil empire

But the "retired" strippers that start these legal actions couldn't give a fuck.

Contractor status is not going to go away, it just needs to be used more carefully.

But really good things could happen, suppose in the SF clubs, all the girls are turned into freelancers, basically customers. So the men and the women pay an entrance charge, and the men will be paying for booths and back rooms. But the house does not get other money from the women. So it would become more and more like TJ.

The women would just do it whatever way they want, and that is always the best!

SJG

@flagooner that’s called SS (Stripper Security)

Yes, the retired strippers are the one's who file the law suits. This all has been going on since the 1980's.

But consider, a strip club where the women are all freelancers and operate under very few rules other than their own!!

SJG

Right here:
http://www.bayswan.org/eda-sf/

Not actually a union, an alliance

SJG

Not contractors or employees, more like freelancers. All the house gets is maybe a cover charge, as the men pay. And then the men pay the house fee for the VIP rooms. Don't limit the number of women.

The more you do it that way, the more like TJ it becomes. Less light in areas of the front room too.

It will be GFE auditions -> FS -> and sometimes you can just walk a girl right out the front door

SJG

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