Contractor or Employee?
Just recently, several dancers from a couple of the Las Vegas clubs brought forth a class action suit against several strip clubs for back pay. They claimed that they were employees rather than contractors and that the stagefees that they paid over the years to these clubs were owed to them. For a minor settlement, these women are willing to change the whole industry for thousands of other women. For the good or bad? I think bad. Let me illustrate and discuss several points.
First off, the strip club industry isn’t exactly accepted by everybody and their mother. It’s seen as immoral to many people and a lot of people would love to shut it down or see regulations in place that would basically make watching exercise infomercials more exciting. By going through with a major class action suit, the only thing these women are doing is drawing attention and bad publicity to an industry with opponents just waiting for more ammunition.
Secondly, let’s talk taxes. Everybody knows that dancers make pretty good money. How much? No one really knows because why? It’s all in cash. By making these women employees, there will have to be tighter records of how much they’re making. Right now as contractors, the clubs have much less accountability. Who do you think is really interested in this area? That’s right, the IRS. Oh, they’ll be watching this case real carefully.
Next, will winning this case and a measly settlement really be worth it if they stand a chance of ruining a whole industry for most other women and their potential of earning hundreds of thousands more? But I guess the women suing don’t really care. Let’s break this down and see who will eventually suffer out of all this. The club? No way, they’ll just find some other way to get the money they lose. The customers? Maybe, but if they suffer, who else do you think will eventually suffer the most?
What this case mostly will break down to is the matter of control. Currently, most of the clubs in Las Vegas give their girls fairly flexible schedules and do in general treat their dancers like contractors. They few that don’t only need to make a few minor adjustments to the way they manage their clubs. Afterall, a contractor is still obligated to perform a specific job. As contractors, the dancers have much more freedom and control and retain their capacity to maximize their earnings potential. You can look at the Independant Contractor Analysis or what is most commonly referred to as the IRS’s 20 Factors to determine if a person is an employee or contractor. I just hope that instead of being shortsighted, these ladies look at the industry as a whole and make the right choice and keep their freedom as independant contractors.
Here is an article from the Las Vegas Sun, another article from the Las Vegas Review Journal, and a followup article.