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Are Strip Clubs Dancing Around the Law?

New rule lets exotic dancers keep 100% of tips. But most agree that venues won't comply without enforcement.


When Alicia Cadena strolls onto the stage of a club near LAX, wearing her thigh-high vinyl go-go boots and neon-green hot pants, she expects to make bank. Any self-respecting exotic dancer would after a five-minute shimmy, swivel and strip routine that leaves no questions about her ample anatomy.

For young women like Cadena, who make their money peeling away their G-strings and teasing off their tops, stripping is a job--a job as real as waitressing and one with some parallel compensation issues.

Strippers--like waitresses--are considered employees under federal law, meaning they're owed an hourly wage and expected to pay taxes on their earnings from tips. Most exotic dancers don't get to keep much of the tip money that club patrons give them, though. That despite a new California law that took effect Jan. 1, which says dancers are entitled to keep 100% of cash tips from customers.

Many clubs continue to take as much as half of dancers' gratuities and do not pay them an hourly wage. That has made exotic dance clubs a hotbed for labor disputes in recent years.

It's a high-stakes game for everyone involved. The adult entertainment industry is a multibillion-dollar-a-year business involving about 3,000 exotic dance clubs and tens of thousands of dancers nationally. Several thousand of those dancers are in California.

Nationwide, the courts have ruled in dozens of lawsuits and continue to handle cases filed by dancers claiming unfair employment practices. In California, the state Labor Commission has handled about 100 complaints from dancers in the last few years.

"I have witnessed other girls not even making $40 for one night's shift," said Cadena, 32, who has been dancing seven years. "That's not even minimum wage."

Cadena usually ends her work shift with $400 or more in cash--bills she's collected from the stage floor at the end of her strip routines and retrieved from her string bikini during private dances. Many dancers are not as financially successful. After paying stage fees and tipping club staff, they may leave with next to nothing.

"This is an industry that is going to have to be brought into compliance kicking and dragging," said Miles Locker, chief counsel for the state Labor Commission, the agency charged with enforcing AB 2509, the new law.

The new law amends Section 350 of the Labor Code, inserting new language regarding dancers' tips. The amendment reads: "Any amounts paid directly by a patron to a dancer . . . shall be deemed a gratuity."

Supporting the change were dancers' lobbying groups and state agencies that wanted to make clubs accountable for the mostly cash income the clubs were taking in, according to Locker. "[These clubs] are used to making lots of money off the dancers, and they don't want that situation to change."

In fact, two dance clubs in San Diego contend the new law is unconstitutional and filed suit against the Labor Commission in February. The suit claims that the law treats the exotic dance club industry differently than other industries and that it interferes with the contracts clubs have with their dancers.

"[AB 2509] is just a way of trying to steal money from the club," said George Mull, counsel for CB & DM Entertainment Inc. and Jolar Cinema in San Diego, the two clubs that filed the suit.

Most clubs set fees for the services their dancers provide--such as a lap dance in which the dancer straddles the customer and moves provocatively for the length of one song. The customer pays the dancer, and most clubs then take a 50% cut--their fair share, they say, for providing the venue.

"It's ridiculous to look at this as a tip," said Mull. "Most men that have gone to a club, if they asked a girl to come over and do . . . table dances and at the end said, 'Here's $7,' she'd say, 'No. The stated price is $20.' It's not a tip. You can't just change the name of something and have it be different than what it is."

Whether that money is a tip or a fee is at the heart of the issue in California. A larger issue nationally is whether the dancers should be classified as employees.


The majority of dance clubs, in California and nationwide, consider their dancers to be independent contractors or tenants, not employees. As such, they do not pay their dancers by the hour or provide other employee benefits, such as workers' compensation or disability. Many clubs even charge them to perform.

A lawsuit filed by dancers says that Deja Vu, a national chain of exotic clubs based in Lansing, Mich., charges a stage fee of $50 to $100 just to come to work, fines them for being late, chewing gum on stage or failing to smile during performances. In addition, the suit says the clubs require dancers to tip a minimum of $10 to each waitress, bartender, deejay and parking attendant, to purchase a $10 "ladies drink" during each shift, and takes a 40% cut of the money dancers earn from lap dances.

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