Strippers teach Florida businesses a lesson about the FLSA
At the end of June 2018 a federal jury awarded several south Florida exotic dancers nearly $1.8 million in a similar case.
The exotic dancers alleged that they were denied wages and overtime in violation of the Fair Labor Standards Act (FLSA). The female strippers claimed that these violations were willful because the employer did this two years after the club's parent company reached a $1.55 million settlement in a similar lawsuit.
For several years Florida exotic dance club owners have been getting sued by strippers, claiming violations of the Fair Labor Standards Act. Most of these lawsuits claim that the businesses misclassified the strippers as independent contractors, when they really were employees.
What lesson can Florida business owners take from this recent verdict? One take-away is that not only can the worker sue the company, but they can also sue the owner of the business.
In this recent case against King of Diamonds in Miami, the female dancers alleged that the Florida business never paid the dancers any amount as wages whatsoever, and have instead unlawfully required the dancers to pay them for the privilege of working. Also, they alleged that the only source of monies received by the strippers relative to their employment came in the form of gratuities received directly from customers, a portion of which they were required to pay to the business. Another allegation was that the employer routinely required the workers to attend meetings at the business for which they receive no compensation whatever. Also, the workers alleged they were required to pay a “shift” or “house” fee each night they worked. Further, the business allegedly required workers to “kick back” to the business 10% of the tips they received from patrons during their shifts. Finally, the dancers claimed that the business failed to maintain records of the number of hours worked as required under the FLSA.
The dancers sued their employer for minimum wage and overtime violations arising from their work at the club. The lawsuit was brought under the Fair Labor Standards Act (“FLSA”) and Florida law. After several years of expensive litigation, the case recently went to trial which resulted in a verdict for the employees for nearly $1.8 million.
As a reminder to Florida employers, the FLSA requires employers to pay their employees at least one and a half times their regular wage for every hour worked in excess of forty per week. If the employer failed to keep time records, as was true in this case, then an employee meets her initial burden by producing sufficient evidence to show:
(1) that she has in fact performed work for which she was improperly compensated; and
(2) the amount and extent of that work as a matter of just and reasonable inference.
Once an FLSA employee meets this initial burden, the burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee’s evidence.
If you are thinking that this verdict is an aberration, it is not. Just two months earlier, another federal jury awarded a verdict of $4.59 million to a class of exotic dancers. Similar to this South Florida verdict, the $4.59 million verdict was based on claims of FLSA violations for unpaid wages, as well as state wage/hour claims due to misclassification as independent contractors. In that other case, the jury reportedly found that by requiring the dancers to pay certain fees for working their shifts, the employer violated federal and state wage and hour laws and paid the employees nothing. The employer in that case also argued that the money received by the dancers from customers was wages, but the court concluded they were tips. Verma v. 3001 Castor Inc., No. 13-cv-03034 (E.D. Pa. Mar. 23, 2018).
These cases remind Florida employers of the importance of properly classifying workers as employees, rather than independent contractors (IC) unless they meet the requirements to be considered IC.
We recently wrote an article about how a Labor Department investigation determined that a Florida company misclassified workers as independent contractors instead of employees – which cost approximately $200,000.
If you own a Florida business and you have questions about sex discrimination and or sexual harassment, you may email the Law Office of David Miklas, P.A. for a consultation or you can call David Miklas at 1-772-465-5111 to discuss sexual orientation discrimination in Florida.
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