View Full Version : SR & W-2's

07-23-2013, 03:57 PM
So Cal Dancers,

Just a heads up re:the spearmint rhino w-2 conversion... The interesting thing a few dancers told me, over at the newer non "Rhino" clubs, (still owned by spearmint Rhino) they are still 1099'ing dancers. Seems like clubs that weren't part of/weren't around during the class action lawsuit can keep operating that way...

Sorry if wrong forum, just wanted to pass it on... I know my ATF to moved over to one of these, because also right now they don't have dancer payouts at some of these clubs either!!

To add a "question"... Umm, would you prefer to move to a new club or just stay we're you are and deal with getting w-2'd?

07-24-2013, 03:28 AM
indeed there's a multiple page long thread in the Dancer forum on this topic - albeit involving the SR in Vegas which was also affected by the same settlement. Based on the postings in the other thread, while a few dancers appear to welcome 'employee dancer' status, most appear to be moving to other clubs that still provide independent contractor status and 1099's.

Another thing which appears certain is that the legal question of dancers falling under 'employee' status isn't unique to SR. A similar class action lawsuit is already underway regarding PEC in New York that will 'heat up' this coming October. And several similar lawsuits have already been decided regarding clubs in Massachusetts. The 'bottom line' appears to be that the federal gov't, state gov'ts, even labor unions, all have a vested interest in seeing 'employee' status for dancers become widespread.

07-24-2013, 07:42 PM
The 'bottom line' appears to be that the federal gov't, state gov'ts, even labor unions, all have a vested interest in seeing 'employee' status for dancers become widespread.

Melonie, how do you think Obamacare will affect the industry?
I'm thinking the clubs with more than 50 workers and under court order to have dancers as employees may try to keep them dancers working under 30 hours to avoid paying health insurance.
I was at Walmart the other day and already heard Walmart doing that to employees. Just means hiring more people with each of them working less hours. Even the clubs that still have dancers as contractors may preemptively keep dancers under 30 hours in the hypothetical future case that employee status reclassification were to occur, especially in light of potential greater risk from Obamacare. All this may suggest dancers regularly working at 2 different clubs instead of regularly at 1 club.

07-25-2013, 02:33 AM
^^^ there's actually two logical possibilities regarding 'employee' dancers from the clubowners' standpoint. The first is as you describe above, forcing employee dancers to stay below the 30 hour per week ObamaCare definition of 'full time' employees, thus rendering dancers ineligible for 'employer' provided / subsidized health insurance, as well as ineligible for state unemployment / disability insurance. This potentially saves the clubowner $3000 per dancer per year in ObamaCare IRS penalties, plus another ~$1000 per dancer per year or whatever the state unemployment / disability fund insurance premiums would cost. But this also potentially exposes the clubowner to the same 'exploitation' criticisms now being directed at restaurant chains, theatre chains, retailers, state & local gov'ts etc who are forcing employees to migrate to 28- per week 'part-time' status. Indeed this possibility could very well result in dancers wishing to work full-time hours being forced to do so at two different clubs because of the 28- hour per week part time maximum.

The other logical possibility from the clubowner's standpoint is to staff the club with the minimum required number of employee dancers, thus requiring these 'full-time' employee dancers to work as many hours per week as possible ... to provide them the legally mandated 'full-time' employee benefits ... and to thus achieve a public image that dancers are being treated fairly. Of course, unlike the restaurant chains, theatre chains, retailers, state & local gov'ts etc. the clubowners have a number of 'transfer mechanisms' available to absorb a sufficient amount of customer spending / gross dancer earnings to effectively pay the additional costs of health insurance coverage / subsidies, unemployment / disability insurance premiums etc. out of the dancers' pockets rather than the clubowner's profit margin. IMHO this is what SR is attempting to do following their recent lawsuit and settlement.

Of course, in both of the above 'employee' dancer situations, it's an absolute certainty that strict scheduling of shifts, strict reporting of dancer tips and other income, etc. will become an integral part of the equation.

There's also a third possibility for large privately owned clubs ... to simply continue mis-classifying dancers as self-employed independent contractors, to pocket as many profits as possible for as long as possible, and to be prepared for a future lawsuit, future DOL or IRS investigation etc. to trigger retro-active dancer minimum wage claims and retro-active ObamaCare IRS penalties for failure to provide health insurance which could instantly bankrupt the club. IMHO most privately owned clubs will choose this option ... will play 'dumb' about their potential obligations ... will siphon off club profits as inconspicuously as possible ... and to eventually 'face the music' if and when they are forced to in the future. Generally speaking, corporate clubs subject to investor scrutiny cannot get away with this, because the corporate exec's would face potential charges for breach of fiduciary duty.

An obvious 4th possibility is for individual private clubowners to become '49ers' ... limiting club growth and total dancer hiring levels to assure that the number of total dancers employed during a single year doesn't exceed the magic number 50 which triggers ObamaCare employer mandates. This is tricky business though since 'economy of scale' makes it difficult for such a small privately owned club to achieve / maintain enough 'critical mass' to continue attracting top shelf dancers and big spending customers, to be able to afford the political contributions necessary to keep LE at arm's length etc.

In both of these latter situations, however, the private clubowner continuing to mis-classify dancers as self-employed independent contractors is basically working under the assumption that the club is continuing to operate on 'borrowed time'. As such, a 'moral hazard' situation presents itself where the private clubowner will actually face little or no additional risk of the club being closed down from prostitution charges, from hiring illegal immigrant dancers, etc. Thus a strong possibility will exist that such private clubowners will 'turn a blind eye' to anything which might generate higher profits while the club is still able to operate.