Thursday, September 17, 2015

Exotic Dancers: Employees or Independent Contractors? Why It Matters


Priya Verma sued The Penthouse Club of Philadelphia under federal and state wage laws. The recent case illustrates a trend I am seeing in my current research project— companies misclassify workers as “contractors” and they impose various chargebacks or fines, all of which are subtracted from their compensation. For dancers, the night club charged a fee for their dressing room, fined them for not wearing their hair down, charged a “stage rental fee,” required tips be paid to the disc jockey, fined them $100 for smoking and $50 for dress code violations, and so on. Think this is unique to strippers? Hardly. I am finding that many installers of cable services and delivery workers are misclassified as independent contractors. If they don’t complete work within a specified time, or their work is not satisfactory, they are deducted piece-rate pay in “chargebacks.” Besides the workers who are cheated out of overtime and minimum wage pay, the biggest losers are Social Security and other government units that collect employment taxes. Who pays for this cheating? Honest employers. Verma recently won a preliminary ruling in her lawsuit.

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