Exotic Dancers Sue for Appropriate Employment Status
Women claim they were misclassified as independent contractors
In today’s so-called gig economy, a large percentage of workers are finding themselves classified as independent contractors.
The trouble is that many of these people act as employees, but aren’t entitled to any of the perks that go along with that classification, such as benefits, employer-withheld taxes, or overtime.
So what happens when misclassified workers fight back and demand proper employment status? A recent court case provides some insight.
Entertainers, not employees
The owners of Jackson Street Entertainment, a company that operated a chain of “gentlemen’s clubs,” didn’t actually employ any of the exotic dancers that drew patrons to the business.
Rather, it hired all of its entertainers as independent contractors. The women were required to sign contracts that stated that they were leasing club space while performing. They were also required to pay an entrance fee before each shift.
The women’s compensation consisted entirely of tips. They did not receive an hourly wage.
Six of the women decided to band together and sue the company. They alleged that they were misclassified as independent contractors. They pointed out that the clubs held the dancers accountable to certain rules and fired women who did not comply. The women asserted that the club also determined their schedules and fees.
The company contested the lawsuit. It argued that the women were properly classified because they were allowed to work at other clubs, to make their own schedules, and to decide how and when they performed.
The company lost. The court ruled that the women had been improperly classified under the Fair Labor Standards Act. The club owners were ordered to pay $265,000 in back pay and damages.
(For more information, see McFeeley v. Jackson Street Entertainment.)
How to determine status
If you suspect that you’ve been misclassified as an independent contractor, it’s important to know that the U.S. Department of Labor (DOL) has a framework for determining who is an employee and who is an independent contractor.
The DOL uses the following six questions as a basis for examining individual employment relationships. Ask yourself:
- Is your work integral to the company’s business? That is, is the work you do part of a process or service that the company provides to others?
- Do you manage people or processes? If so, do your decisions affect the company’s potential profits or losses?
- Do you have an investment in the facilities or equipment needed to do the job? Do you have to invest in equipment or tools to complete work for the company? Do you bear some risk for a loss?
- Do you exercise independent business judgment? Are you economically dependent on the company, or do you freelance for other businesses?
- How permanent is your relationship with the company? Are you permanently or indefinitely working for a company, or is your work project-based?
- Who controls the conditions of the relationship? Who determines pay, how the work is performed, whether or not you can hire others, or whether you can work for other companies simultaneously?
Get help from an experienced attorney
Obviously, questions about misclassification are specific to each situation. That’s why it’s a good idea to speak to an attorney if you have concerns about your employment status.
Call or email us today to discuss your unique situation.