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Employee vs. independent contractor

In recent years, exotic dancers have been bringing lawsuits against strip clubs in New York and around the country saying that they were denied a minimum wage and other benefits generally given to employees. Increasingly, courts have agreed with the position that they are employees and not independent contractors. As clubs operate more as legitimate businesses, they have come under scrutiny from the IRS and the Labor Department.

Experts say that more lawyers are willing to take such cases based on the success of previous cases. However, those who represent the clubs consider some dancers to be nothing more than professional plaintiffs. The lawyers claim that the dancers allow themselves to be named in multiple suits in their quest for a windfall. Club owners claim that the dancers are independent contractors because they may work in many locations at the same time.

This may make it impossible to control their hours or provide supervision, which are two criteria to determine if an employer/employee relationship exists. In an employment classification case, a court will look at whether or not an employer controls the schedule and working conditions of its workers. If it does, it is more likely that a court will rule that the worker is an employee. This is true regardless of how the parties classify the relationship between themselves.

The law alone determines whether a worker is an employee or an independent contractor. If a worker is classified as an employee, he or she may be entitled to workers' compensation benefits, a minimum wage and overtime pay. In addition, that employee may be entitled to participate in a pension plan, and the employer must withhold and pay half of the worker's payroll tax liability. An employment law attorney may be able to help those seeking employment status and the benefits that come with it.

Source: Bloomberg BNA, "More Exotic Dancers' Misclassification Suits Dispute Clubs' Business Model, Lawyers Say", August 11, 2014

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