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Department of Labor Audit Lawyer Update: Are Strippers Independent Contractors or Employees?

above-the-bar-logo-no12Our Award-Winning New York Employment Lawyers have been often asked to comment and lecture on the topic of misclassification of employees as independent contractors. We have written and given several talks on this topic and continue herein. This topic affects all industries – entertainment field (actors, sound mixers, costume designers, digital artists) to technology (software engineers and consultants) to medicine (specialty medical providers and assistants). Some companies seek to misclassify workers in an effect to avoid paying employee benefits, payroll taxes and avoid protection under human rights law. Plaintiff’s lawyers and the Department of Labor (federal and state) have been attacking companies in every industry. The latest industry to come under attack is none other than the adult entertainment industry – specifically, strippers. As described herein, these cases underscore the importance of conducting the classification analysis immediately – call our office for a confidential review and analysis at (800) 893-9645.

Should Strippers Be Considered Employees or Independent Contractors?

Cases have been filed across the nation on this very issue and we have been following several decisions. As we have discussed before, these cases involve very fact specific analysis. That being said, one of the critical factors will be whether the worker performs services that are integral or incidental to the company’s overall business. In these cases, there is a strong argument that the dancers perform services at the heart of the business. To that end, perhaps it is not surprising that last year, in New York, one federal court ruled that dancers at Rick’s Cabaret International, Inc. were employees and not independent contractors under federal and state law. Around the same time, another federal judge in NY approved an 8 million dollar settlement for a class action lawsuit brought by a group of dancers at the Penthouse Executive Club who allege that they were misclassified as independent contractors and not employees. Other courts outside of New York have ruled similarly too.

In these rulings, the courts have rejected a common misconception in the business industry. Most companies incorrectly believe that if they have a signed independent contractor agreement from the worker that will somehow inoculate them and act as a panacea. Nothing can be further from the truth – even if the worker and company agree that their working relationship will be treated as an independent contractor relationship, the courts and agencies will conduct their own individual multi-factor analysis. There are many different tests used but the common factors, in part, are who controls the working schedule, how many direction and control that the company provides, whether the company provides any equipment or tools, whether the worker can delegate their services and whether the worker is an established business that advertises to the general public. The courts have found that the companies exercised significant direction and control over the dancers by dictating appearance and conduct policies.

Conclusion

This line of cases and the rise of litigation and governmental investigation is yet another reminder that companies must carefully scrutinize their relationships before outside parties force them too. If your company has any questions about how to properly classify its workforce regarding classifications, please call our experienced employment lawyers at (800) 893-9645 o learn your rights, options and defenses. Finally, if you are a worker who believes you have been misclassified, please call our office to learn your rights and options. Our award-winning employment law attorneys have worked with employers, employees, government agencies and non-profit entities. One last point that is very important here – an ounce of prevention is worth a pound of cure – it is better to act proactively than reactively in these cases.

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.