The distinction between an independent contractor and an employee is undoubtedly a confusing issue for many workers, but being misclassified as an independent contractor can result in quite a bit of lost revenue for actual employees.
A few weeks ago, two exotic dancers hailing from Illinois filed a class action suit against their former employer for improperly classifying them as independent contractors when they believed they were treated as employees.
The two ladies claimed that on paper they were independent contractors, exempt from benefits, hourly pay, overtime pay and a minimum wage, but, in person, they were treated as employees, forced to share tips and follow managerial instructions regarding schedules and attire.
The problem is that a lot of businesses get a financial break by classifying workers as independent contractors, while maintaining the same supervisory authority over them.
That’s a great deal for employers, but it’s also illegal. True independent contractors cannot be told how or when to do their job, they are their own business.
According the suit:
Defendants [VCG Holding Corp.] set the hours of operation; length of shifts dancers must work; the show times during which a dancer may perform; … the sequence in which a dancer may perform on stage during her stage rotation; the format and themes of dancers’ performances (including their costuming and appearances); … conduct while at work (i.e. that they be on the floor as much as possible when not on stage and mingle with patrons in a manner that supports Defendant’s general business plan) …
Another plus for employers, since independent contractors are viewed as individual businesses, they can’t organize.
“the industry-wide shift toward classifying dancers as independent contractors … has certainly made it more difficult for dancers to organize for labor rights. By law, independent contractors are unable to unionize. More insidiously, dancers’ endless competition for tips undermines the worker solidarity necessary for any sort of workplace organizing,” Rachel Aimiee, co-founder of the exotic dancer advocacy organization We Are Dancers, wrote in a 2012 essay for In These Times.
Although the distinction isn’t always clear, workers need to ensure that if they’re classified as an independent contractor, they’re treated as such.
Photo courtesy of Wendy on Flickr.