Strippers of America, Get Your W-4s Ready. You’re Employees Now
OK, I’ll admit, that title is a broad generalization (or perhaps a generalization about broads. HI-YO!!), but it got your attention, didn’t it? But for those of you who dance eroticallyor aspire to dance erotically at the Club Onyx in Atlanta, it’s also true.
In Clincyv. Garaldi South Enterprises, et. al., a federal court recently forced the club to pay $1.5 million — presumably all in crumpled singles — to strippers after the court concluded that the club improperly classified the dancers as independent contractors, rather than employees. More from Lawrence Sorohan, an attorney with Fisher & Phillips LLP:
The case was brought by a group of dancer/entertainers who sued their employer alleging that they had been misidentified as independent contractors rather than employees for purposes of the FLSA. Rather than pay wages as would be due employees, the defendants required the strippers to pay a fee to the club for the privilege of dancing as non-employees. The decision potentially placed millions of dollars at stake.
As is typically the case with employee/independent contractor determinations, the court examined a number of factors, including the following:
1) the nature and degree of the alleged employer’s control over the work;
2) the alleged employee’s opportunity for profit or loss depending on her managerial skill;
3) the alleged employee’s investment in equipment required for the task, or her employment of workers;
4) whether the services required a special skill;
5) the degree of permanency and duration of the working relationship; and
6) the extent to which the services rendered are integral to the alleged employer’s business.
Sorohan goes on to explain other considerations given by the court:
The court also considered factors ranging from whether the club recruited dancers (it did not) to the interview process (dancers underwent a “body check” for tattoos or stretch marks). It noted the application process, involving a two-dance audition evaluated by club management. If successful in the audition, the entertainer needed to obtain an individual entertainment license, specific to the Club Onyx and issued by the City of Atlanta. The court also exhaustively examined the rules of the club as well as the claim that patrons actually paid the dancers rather than the club paying them.
After analyzing all the facts and circumstances, the court sided with the dancers, agreeing that they were in fact employees:
Ultimately, the Clincy court determined an employee-employer relationship existed given the club’s control over the work, the entertainer’s opportunity for profit and loss, the entertainer’s relative investment and lack of specialized skill, and the integral nature of nude entertainment to the club’s business.
To be fair, I find it a big condescending that the judge felt the need to question the “skill” required to be a stripper. I’ve seen some dancers do things with a ping-pong ball thatrequire thedexterity and muscle control of an Olympic athlete.
The lesson, of course, is that employers really, really like to call their employees “independent contractors” to alleviate the burden of withholding income taxes and paying the employer’s share of payroll taxes. But if there is truly an employer-employee relationship and the employer runs afoul of the Department of Labor, the penalties are likely to be severe.
Lastly, congratulations to the good women of Club Onyx, who can now go on to finish those law degrees they’ve all been working so hard towards.
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