Exotic Dancers Sue, Misclassified as Independent Contractors But Treated Like Employees

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.

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The Shameful U.S. Record on Temporary Worker Protections

In the past decade, temporary work arrangements grew steadily in the United States—20% since 2003. In 2013, there were 2,673,800 workers employed in the temp industry, which accounted for 24% of all job growth in the United States during the tepid economic recovery from 2009 to 2012. Often these workers perform the same work as permanent employees for lower wages, little training, no benefits and no promise of security. Unfortunately,according to a recent ProPublica investigation, the United States lags far behind other industrialized countries in labor protections for temporary workers. Of 43 “developed and emerging economies” tracked by the OECD, the United States ranks near the bottom, at 41st, for temporary worker protections.

While temporary work and other forms of independent contracting offer some workers desired flexibility, most temporary workers are caught in a precarious gap in labor protections and lack needed workplace stability. From low-wage maintenance work to highly paid tech jobs, the growth of temporary work has pervaded the labor market. The AFL-CIO’s Department for Professional Employees reports more than 7.7 million self-employed and temporary workers are employed in management, professional and related occupations. Temp workers at Microsoft, for example, have long protested their “permatemp” status at the company, where many have worked for years receiving less pay for the same work as regular employees, with no benefits or paid time off and little hope of moving into regular employment.

On the other end of the wage spectrum, workers often toil in unsafe conditions with little training, as companies outsource entire segments of their blue-collar workforce to staffing firms. Workers who are cheated out of wages or have safety complaints frequently do not know where to turn, as their true employer is masked through numerous subcontracting relationships throughout a supply chain. Some 542 temp workers were fatally injured on the job in 2011; Latino temp workers represented 28% of those deaths.

Immigrant workers are especially susceptible to abuse, as they may be unaware of their labor rights or fear immigration enforcement. Many have reported having to pay fees to fly-by-night staffing firms that charge workers for van transport to unknown job sites. Immigrant workers also frequently access the labor market through international labor recruiters, who have been known to charge high fees, confiscate travel documents, issue threats and commit other forms of abuse that have even resulted in human trafficking.

The growth of temp work arrangements is the product of deliberate corporate practices and policies that have been implemented within the context of privatization, deregulation and flexibilization of labor laws. There are numerous efforts to reverse these trends. The International Labor Organization is examining temporary work this summer as part of an effort to encourage the transition from the informal to formal economy. National governments, too, have made efforts well beyond the United States to combat exploitative temp work arrangements. For example:

  • At least 12 countries have banned companies from hiring temps in dangerous industries or to do hazardous work.
  • Unlike the United States, about three-quarters of the countries tracked by OECD require temp agencies to register or become licensed before they can begin sending out workers.
  • European Union countries mandated that temp workers receive equal pay and working conditions to employees hired directly by the company;
  • Nearly half of the 43 countries in the OECD study restrict the duration of temp assignments, ranging from three months to three years.

In the United States, workers have won promising gains in an uphill battle. Through collective action, taxi workers, day laborers, home care workers and adjunct faculty have improved their working conditions and formed collective representation on the job. At the state level in the United States, workers have pushed lawmakers to pass laws targeting employee misclassification, including laws that assign joint responsibility to temp agencies as employers, or forbid agreements where businesses know the agency does not have sufficient funds for all applicable regulations. At a time when inequality is at the top of the administration’s agenda, federal agencies and lawmakers must make every effort to reflect these good practices and extend worker protections to temp workers.

Reposted from AFL-CIO NOW

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