Bare Minimum: Stripping Pay for Independent Contractors in the Share Economy
William & Mary Journal of Race
Bare Minimum: Stripping Pay for Independent Contractors in the Share Economy
Michael H. LeRoy 0
0 Michael H. LeRoy, Bare Minimum: Stripping Pay for Independent Contractors in the Share Economy, 23 Wm. & Mary J. Women & L. 249 (2017), https://scholarship.law.wm.edu/wmjowl/vol23/iss2/5
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MICHAEL H. LEROY*
SUMMARY
My study explores a small but revealing corner of the share
economy, where an individual’s private resources are bartered for
limited use by others in exchange for compensation. Strip clubs
create value for owners by commoditizing sexual labor. Clubs avoid
employment in favor of independent contracting with dancers. They
pay no wages or benefits; patrons pay dancers with fees and tips.
But clubs extract entry fees from dancers who work; require them
to rent dressing rooms and stage time; and compel them to share
tips with DJs, emcees, house moms, bouncers, and bartenders. My
research identified seventy-five federal and state court rulings on
wage claims by exotic dancers. In thirty-eight cases, courts ruled
that dancers were employees; only three courts ruled that dancers
were independent contractors. Courts often awarded dancers
minimum wages, overtime, and liquidated damages. My research relates
more generally to labor in the share economy. Strip clubs epitomize
a trend away from wage based employment in favor of independent
contractor agreements for a transient and rootless workforce. The
share economy model for work takes advantage of the poor
bargaining power of individuals, while failing to pay workers minimum
wages, overtime under federal and state law, employment taxes,
and mandated employment benefits.
INTRODUCTION
A. Labor in the Share Economy
B. Research Overview
I. THE BUSINESS MODEL FOR STRIP CLUBS
A. What Is the Share Economy?
B. The Business Model for Strip Clubs
II. RESEARCH FINDINGS FOR DANCER LAWSUITS
A. Sample of Cases
B. Statistical Findings
C. Fair Labor Standards Act: How Courts Applied a Six
Factor Test for Employment
* Professor, School of Labor and Employment Relations, and College of Law,
University of Illinois at Urbana–Champaign.
[Vol. 23:249
1. Degree of Control
2. Opportunity for Profit and Loss
3. Investment in Equipment or Materials
4. Degree of Skill
5. Permanence
6. Integral to the Business
INTRODUCTION
A. Labor in the Share Economy
Uber and Ritz Cabaret—a strip club1 in downtown Baltimore—
have more in common than meets the eye. Neither company
employs its primary workers.2 Instead, each requires workers to sign
independent contractor agreements.3 This allows the companies to
avoid employment taxes, including Social Security and Medicare.4
They sidestep legal obligations for worker’s compensation, an
insurance system that pays medical expenses and income support for
employees who are injured on the job.5 They also shirk an employer’s
duty to pay unemployment taxes.6 Because federal labor law does
not apply to independent contractors, dancers are impeded from
bargaining through a labor union.7 Uber and Ritz Cabaret do not pay
2017]
for health benefits, either.8 My study focuses, however, on a more
fundamental duty that these firms avoid in bypassing the
employment relationship: federal requirements for minimum wages and
overtime pay,9 and state laws that protect against wage theft.10
B. Research Overview
This study is part of my ongoing research on jobs that are
unlawfully structured as independent contractor relationships. My
goal is to identify all federal and state cases from 2000–2015 in
which workers were unlawfully denied wages and work-related
reimbursements because they were misclassified as independent
contractors. I measure (1) the types of jobs and industries for this work,
(2) whether plaintiffs or defendants won rulings, (3) legal tests that
courts applied and how these factors weighed for or against finding
employment, and (4) court remedies.
At this early juncture, I find that many jobs are misclassified
along lines that clubs use in this study.11 Whether work involves
construction, ridesharing, healthcare, or other industries, companies give
people a degree of control over the time they work.12 But these jobs
also inflate control-of-schedule into illusory forms of self-enterprise.13
This study explores a small but revealing corner of the share
economy—the sexual labor market. I analyze and present data on
seventy-five federal and state court cases involving dancers who
sued their club for unpaid minimum wages and overtime, and
unlawful pay deductions. Only one case had male dancers.14
Initially, I eliminated cases involving dancers from my study.15
But these cases continued to appear with conventional jobs in my
research. I saw similarities in how plaintiffs—dancers and rideshare
operators, for example—are deprived by contract of rights that inhere
in the employment relationship.16 The commonalities in business
models for strip clubs and rideshare companies are especially
striking and unexp (...truncated)