In many cases, the dancers are paid less than minimum wage, or not paid at all . . . in fact, in some cases the dancers must "pay for the pole" (essentially renting time in a strip club to be on-stage or on a pole). In exchange, they get to keep the dollar bills that come their way by various and often creative means. They get the tips, the club gets the cover.
In my home federal district, the Middle District of PA, dancers filed a wage-related lawsuit that is now before Judge Jones (who I currently have at least one case with). The club claims the dancers are "freelance artists" and not employees. The club has some other defenses as well:
For starters, Mr. G's contends that Watson hasn't worked at the club in more than three years and that she never performed there for more than 40 hours in any given week. Carter, Blackwell-Young and Harr might have worked at the club, but Mr. G's officials claim they "do not recognize their legal given names." "Artists who perform at Mr. G's generally only provide a stage name."Now, I've never specifically heard this as a factor in the independent contractor analysis - but I've gotta think that "we don't even know her name" has to count for something. Am I right?
Unfortunately, independent contractor vs. employee is one of those "totality of the circumstances" multi-factored tests that seldom produces bright lines. Ultimately, the courts generally look at the level of control the employer/contractor exerts over the employees/independent contractors. In some circumstances, the dancers will be contractors and in others they'll be employees.