OK. So, Samantha Fox may not have actually sang those words back in the late ’80’s. But, the operators of Florida and Ohio strip club chain Scarlett’s Cabaret agreed on June 26th to pay up to $6 million to end a wage-and-hour class action brought by current and former exotic dancers. The plaintiffs Adonay Encarnacion, Andrewa Wong, Rachel Stephenson and Brittney Roberts had alleged that Scarlett’s Cabaret operators J.W. Lee Inc., J.W. Lee Properties LLC, Ybor Operations LC and several related entities underpaid them by mis-classifying them as independent contractors. They cited IRS and Department of Labor (DOL) regulations on the classification of workers showing the minimum wage and overtime violations.
Under the settlement agreement, Scarlett’s maintained that dancers were not mis-classified, and that fees the dancers took home from clients were “service charges”. They went to hold that this money “upon a reclassification, would be the lawful property of the Nightclubs and that could then be used, in whole or in part, to satisfy any wage claims found to be owned.”
Either way, under the settlement, the club will pay $6 million to the qualifying dancers who worked during the 2009 to 2015 period. No extra payment was set to cover attorney fees. So, how much the dancers will actually receive is yet to be determined.
Until Next Time, Be Audit-Secure!