Stripper suit: Club misclassifying workers caught with pants down

The legal distinction between employee and independent contractor is one of great importance. Independent contractors are not guaranteed protections under the Fair Labor Standards Act, meaning they are not subject to minimum wage and overtime requirements. Independent contractors also do not fall under the purview of other labor laws, like those concerning workers' compensation and tax withholding.

Chances are, at your workplace, "making it rain" or asking for a lap dance would result in a stern phone call from HR. Nonetheless, an Illinois lawsuit filed by a pair of exotic dancers can shed light on how your employer may unfairly be cheating you out of important benefits with an improper independent contractor designation.

Lawsuit filed in Illinois court says club controlled day-to-day work of dancers

On January 31, exotic dancers "Brandy Apple" and "Amanda Sheer" filed a class-action lawsuit in Illinois alleging that VCG Holding Corporation misclassified dancers working at one of its clubs as independent contractors even though they were treated as employees. The young ladies claim that this wrongful designation has resulted in minimum wage violations for tipped workers that cost them thousands. So what makes a worker an independent contractor versus an employee?

According to the official definition from the IRS, "[t]he general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done." The critical element is whether or not the person or entity paying a worker has the legal right to exercise control over the details of the execution of services.

Of course, any examples of an employer directly telling a worker what to do and how it should be done are relevant evidence that an employee relationship exists. Many other factors may also be indicative of the level of control an employer exercises over a worker, and therefore, the legitimacy of classifying that worker as an independent contractor. Some of them include:

  • Who sets the schedule for the completion of work?
  • How long-term is the relationship between the worker and the payer?
  • Is training given for the work to be performed?

According to the recently filed Illinois lawsuit, the defendant club owners set the length of dancers' shifts, the club's hours of operation and the show times during which given dancers are permitted to perform; dictate the themes and format of dancers' performances, including costumes; and, enforce standards for general conduct while at work, such as a rule that dancers must mingle with club patrons when not on stage. For its part, VCG intends to challenge the lawsuit.

This is only the latest in a spate of suits across the country alleging that strip clubs have improperly misclassified performers as independent contractors. One of the most high profile wrapped up in 2012 with a $13 million settlement for 14 dancers as well as reclassification as employees. Being a class-action, as many as 300 dancers could benefit from a successful outcome in the recent Illinois case.

Contact an Illinois employment law attorney if you are misclassified

Whether your work involves dropping your skivvies or building a house, the principles are the same. Misclassification as an independent contractor could be costing you thousands in benefits you are legally entitled to. If your employer controls your work but you are paid as an independent contractor, get in touch with an Illinois employment law attorney today to explore legal avenues for setting things right.