Recently, nearly 250 exotic dancers in Los Angeles were awarded $6.5 million after they accused Paradise Showgirls of stealing tips they earned from their performances.
According to the Los Angeles Times, the dancers argued that the managers at Paradise Showgirls on Valley Boulevard illegally kept fees for services they performed in a class action lawsuit. The dancers claimed that they are employees of the club and not independent contractors, as the club claimed.
The dancers claimed in the lawsuit that any money they earned from private dances was shared among managers and other employees at the venue. For example, when a dancer charged $40 for a lap dance, $26 went to the dancer, while $14 went to the club.
Attorneys for the club countered the dancers’ claims by saying that dancers did not contribute to the club’s overhead and should not be paid all of the money they received. They said that they are essentially renting club space to perform. They argued that the funds collected from the dancers covered staffing, security, advertising and marketing.
An appeal is likely in the case.
Am I Allowed to Keep the Tips I Earn?
This lawsuit had many layers, including whether the money paid to the dancers was a payment to the establishment or a tip. Employees in California who are allowed to receive gratuities should be aware that the Department of Industrial Relations regulates tip sharing. For information, you can visit the DIR’s website by clicking here.
In the lawsuit above, the dancers argued that money paid directly to them was a form of gratuity; therefore, it could not be shared among the owners, managers and supervisors of the business. In some cases, like when a waiter receives a tip at a restaurant, California law allows for tip pooling, or for tips to be shared among helpers or bartenders. However, in this situation, the money is supposed to go to people who serve customers directly, and each restaurant is required to show that there is a chain of service involved.
If you have concerns about where your tip money is going or you think you may be the victim of wage theft, you need to contact an attorney. As this case shows, class action lawsuits can be useful when large groups of employees have claims over unpaid wages.
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Kesluk, Silverstein & Jacob– Los Angeles employment attorneys