Human Resources News & Insights

A cautionary tale concerning ICs: Strippers ruled as ‘employees’

A new court ruling is a win for exotic dancers in Kansas — and also highlights the difficulties in determining just who qualifies as an independent contractor.

The state Supreme Court of Kansas has ruled that strippers at Topeka gentlemen’s club Club Orleans are employees and not independent contractors.

The court found that the control that Club Orleans’ management exerted over the exotic dancers required their classification as staff members. That control manifested itself in a number of ways:

  • Dancers had to pay “rent” to use the dressing rooms and stage
  • The women were required to pay extra fees for bouncers and DJs
  • “Rent” was higher during peak hours
  • Women had to pay extra to use private rooms to entertain guests
  • Rules governed how much the women could charge and what they could do in their shows, and
  • Women had to sign in when they started their shift and weren’t allowed to leave the building until their shift was over.

7 years of litigation

The club’s owner had argued that since the dancers weren’t paid salaries, they weren’t employees. (Kansas law states that tips can be considered wages.)

But the court found that the women were essential to the club’s financial success. The ruling also noted reasons the women qualified as employees, including the numerous rules the club had set for dancers and the penalties it set for violating those rules (including fines or termination).

The ruling comes after seven years of litigation and decisions from Labor Department and two lower courts.

For more information on the differences between an independent contractor and an employee, and who qualifies as which, check out info from the IRS on its website.

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