Page 38 - AVN December 2015

STOP, THIEF | |By Nate Glass CASE STUDIES | | By Eric M. Bernstein, Esq.
Contractor Law
With dancers, ask ‘Are they or aren’t they?’
Without performers, there is no adult industry.
It is just a fact of life—especially for owners
of gentlemen’s clubs. And for as long as there
have been dancers and gentlemen’s clubs,
there has been another age-old question: Are
They or Aren’t They? That question relates to
whether dancers are employees or indepen-
dent contractors. From the club owners’
point of view, most have viewed dancers as
independent contractors, which avoids all
of the employee-employer issues: minimum
wage, taxes, workers compensation, liability
matters, etc. But just as almost everything in
the labor and employment field has changed
over the years, so has the issue of “are they
or aren’t they?”
While there is no definitive answer, more
states have, at least under some circumstanc-
es, determined that dancers are employ-
ees—and owners need to consider what that
means. This article addresses some of the
factors that provide oversight on the issue of
employee versus independent contractor, as
well as the decisions that have recently been
issued by the court and at several judicial
alternatives. Though the focus here is on
exotic dancers, the question of Are They or
Aren’t They? is one that all business owners
must consider if they are paying individuals
as independent contracts.
First off, one must be aware of two overriding
concepts:
1. There is not just one answer to this ques-
tion; each situation must be looked upon on
a case-by-case, club-by-club basis; and
2. Club owners must consult and retain an
attorney/law firm with experience/expertise
in labor and employment law and an under-
standing of this industry.
There are plaintiff’s employment attorneys
(i.e., shysters—as a management labor attor-
ney I can occasionally use the word) peddling
their wares to any dancer, seeking a hook for
a class action lawsuit against an unsuspecting
club owner. Being forewarned is forearmed.
While management attorneys ply their wares
more subtly (articles such as this), we are
equally out there giving warnings, guid-
ance and hope to the club owners fighting
this ongoing battle. In order to understand
the battlefield, one must first be aware of
the stakes. If an independent contractor is
declared to be an employee, the employer
not only has to pay (and withhold) federal
and state income taxes, Social Security taxes,
Medicare taxes and unemployment taxes but
also is subject to minimum wage and over-
time issues (overtime laws do not apply to
independent contractors), damages and the possibility of
providing some form of medical insurance and leave under
either the Family and Medical Leave Act or a state medical
leave act, or both.
The Internal Revenue Service (IRS) defines anyone who
performs services for you as your employee if you can con-
trol what will be done and how it will be done. This is so
even when you give the employee freedom of action. What
matters is that you have the right to control the details of
how the services are performed.
The IRS sets forth this definition for independent con-
tractors: “people such as doctors, dentists, veterinarians,
38 | AVN.com | 12.15
LEGAL NEWS
lawyers, accountants, contractors, subcontractors, public
stenographers or auctioneers who are in an independent
trade, business or profession in which they offer their ser-
vices to the general public are generally independent con-
tractors. However, whether these people are independent
contractors or employees depends on the facts in each case.
The general rule is that an individual is an independent
contractor if the payer has the right to control or direct
only the result of the work and not what will be done and
how it will be done. One is not an independent contractor
if one performs services that can be controlled by an em-
ployer (what will be done and how it will be done). This