Exotic Dancers are employees, not independent contractors

You know the words and the tune for this song, so there are no surprises here. Dance clubs want exotic dancers (aka strippers) in the clubs but don't want to bother with minimum wages, tax deductions and other pesky government regulations. So the clubs call the dancers "independent contractors" rather than "employees." The clubs pay nothing; the dancers work solely off of tips from patrons. And the dancers bring lawsuits. In the latest, the 4th Circuit held that the dancers were employees under the Fair Labor Standards Act. McFeeley v. Jackson Street Entertainment (4th Cir 06/08/2016). The court examined the "economic realities" of the relationship between the dancers and the clubs. The touchstone of the “economic realities” test is whether the worker is “economically dependent on the business to which he renders service or is, as a matter of economic [reality], in business for himself.” Application of the test turns on six factors:

  • (1) [T]he degree of control that the putative employer has over the manner in which the work is performed;
  • (2) the worker’s opportunities for profit or loss dependent on his managerial skill;
  • (3) the worker’s investment in equipment or material, or his employment of other workers;
  • (4) the degree of skill required for the work;
  • (5) the permanence of the working relationship; and
  • (6) the degree to which the services rendered are an integral part of the putative employer's business.

As is often true, the main factor that tipped the scales was control, control, control. The clubs really had a lot of control over the dancers' schedules, dress, behavior, and fees charged.