NYC Strippers Aren't Contractors, Judge Rules

A New York judge has ruled that strippers at the upscale Manhattan club Rick's Cabaret are entitled to at least minimum wage because they're employees, not independent contractors.

The ruling jibes with a growing trend of U.S. courts recognizing exotic dancers as employees who are entitled to a host of labor law protections.

So why did the judge classify the dancers in this case as employees rather than contractors?

Independent Contractors

Like many strip clubs facing similar lawsuits, Rick's Cabaret contended that its strippers were independent contractors.

Independent contractors have more control and autonomy over their work than employees. They have the right to decide when, where, and how their work should be completed.

Because of that professional freedom, they're not entitled to minimum wage, overtime pay, or other benefits that employees enjoy.

The Test: Contractor v. Employee

Under federal law, the classification of a worker depends on the degree of control the employer has over the worker and the degree of independence the worker exercises.

In this case, Judge Paul Engelmayer found that the club exercised so much control over the dancers that the women were actually employees subject to the club's rules.

This is largely because Rick's Cabaret ordered that dancers not chew gum, dictated what outfits they wore, when they came to work and which bathrooms they used on the premises, reports Reuters.

In addition, the more skillful and essential the worker is, the more likely she is an employee.

Here, Judge Engelmayer noted that the dancers were the "main attraction" and key to the club's success, reports The Associated Press. Such characteristics are indicative of employees, not contractors.

As a result, even though some dancers were raking in as much as $1,000 a night from customers, they were still entitled to at least $7.25 per hour in minimum wage from their employer.

A Not-So-Exotic Trend

The judge's exotic dancer ruling is akin to decisions made by courts in Kansas, Georgia, Minnesota, and Washington, D.C., which have ruled that exotic dancers are employees who are entitled to receive minimum wage, overtime and other wage protections, reports Reuters.

The bottom-line lesson for businesses: If your "contractors" don't make independent decisions about their work, there's a very strong possibility that they are misclassified employees.

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Related Resources:

• Strippers Are Protected by Labor Laws, Judge Says (The New York Times)
• Strip Club Employment Suit Settles for $13M (FindLaw's Free Enterprise)
• IRS Cracking Down on 'Independent Contractors' (FindLaw's Free Enterprise)
• Don't Mix Up Employee, Contractor Tax Forms (FindLaw's Free Enterprise)