“Gentlemen’s Clubs” and Independent Contractors

Should we start 2015 by discussing the topic of who is considered an employee and who is considered an independent contractor? Lest you think this will be pretty dry and boring, wipe that yawn away and let’s talk about strippers. That’s right, as in exotic dancers who perform at so called gentlemen’s clubs.

Would you guess these dancers are employees? After all, they work on employer premises and use employer equipment (stage, sound system). Or would you say they are independent contractors since they provide their own, ahem, uniforms and they have control over their performance (schedule, music).

So which is it?

For now, it depends on which state and jurisdiction you ask.

Until recently, the long-established and unquestioned stripper-club business model has depended on classifying dancers as independent contractors. As such, dancers are not eligible for minimum wage; they’re instead compensated by patron’s tips. There’s also no unemployment insurance or workers’ comp insurance–in spite of the fact that, very high-heel shoes, steep steps, tall stages and poles do not exactly contribute to a safe work environment.

But seriously, over the last few years, that business model has been challenged.

Dancers have been bringing wage and hour lawsuits contending they are employees, and federal and state courts are increasingly finding in their favor.

Late last year, a panel of seven Nevada Supreme Court judges unanimously ruled that the approximately 6,600 performers at Sapphire Gentlemen’s Club in Las Vegas are “employees,” not “independent contractors.” So, I think it can be said that the stripper-club industry is beginning to lose the grip they’ve had on this practice.

And that’s a good thing.

As much fun as it is to talk about exotic dancers, the sad reality is that the majority of workers in this industry are women. And they’re not making a lot of money. And if they get hurt or can’t work for some reason, they’ll find zero health care and unemployment benefits. But when they’re employees, they’ll be covered if they’re injured, they can apply for unemployment, and maybe even have health insurance and benefits.

So, whatever your industry, if you’re also overly dependent on the iffy “independent contractor business model” don’t be surprised to find that status challenged someday soon.

More IRS info here.