A Massaschusetts court this week ruled that a strip club had violated state wage laws when it improperly classified its exotic dancers as independent contractors. Instead, they should have been treated as W-2 employees. (Although to be fair, the IRS hates it when you get glitter on your tax returns.)
The Boston Globe reported that Massachusetts superior court Judge Frances McIntyre granted summary judgment on liability in favor of the clothing-challenged professionals (look: how many different ways can you say "stripper"?) working at King Arthur's Lounge in Chelsea, near Boston. The case, which the judge certified as a class action (oh, there's gotta be a pun there somewhere), now proceeds to trial to determine the damages, which could run into the thousands of dollars per ecdysiast (helpful Wikipedia definition included in a somewhat NSFW entry).
The Globe explained how it all worked:
King Arthur’s Lounge, a club that has been the scene of more than one notorious crime, did not pay the strippers any salaries, required each to pony up $35 to perform each night, and kept $10 of every $30 that each made for “private dancing’’ in secluded booths, according to a state judge who granted a stripper’s motion for summary judgment on the issue of liability.
Apparently, the performers were allowed to keep the singles that patrons tucked in their garters, or whatever, while they performed on the open stage. But they had to turn over a third of their "private dancing" (read: lap dance) tips to management.
The club argued that the dancers were independent contractors because of the independent discretion they exercised. Writes the Globe:
In arguing that the strippers were independent contractors, King Arthur’s said that Chaves got to pick her own music, costumes, partners, and routines. The club also said it never gave her written rules to follow or documentation that she was an employee.
Uh ... no written rules means you're not an employee? As if.
This case was a loser from the start. Most of the time, when an employer tries to pass an employee off as an independent contractor, it is violating the law. This is especially so in Massachusetts, where a statute says that an employee whose trade is the same as the business's cannot be an independent contractor. To get around this, the club argued that it was in the alcohol business, and that strippers were just something extra. You know, like darts.
The judge basically called that ridiculous:
A court would need to be blind to human instinct to decide that live nude entertainment was equivalent to the wallpaper of routinely televised matches, games, tournaments, and sports talk in such a place. The dancing is an integral part of King Arthur’s business.
As we've said here before (see "How to lose a wage-and-hour case"), you can't win a wage case if you mess up an employee's pay. There's no defense if you got it wrong. Our advice to employers: make sure you get the pay right. Or be prepared to settle if you don't.
And bring plenty of singles.