The 4th Circuit Court of Appeals ruled that exotic dancers at two Maryland night clubs, Fuego Exotic Dance Club and Extasy Exotic Dance Club, were misclassified as independent contractors, when they were in fact employees.
Six dancers brought suit, alleging they were owed back wage and damages as a result of improperly being treated as independent contractors.
Ultimately , money is a strong motivation for employers to classify workers as independent contractors versus as employees. Designating workers as independent contractors allows employers to not pay minimum wage or overtime, carry workers compensation coverage for the worker or pay for unemployment insurance for the misclassified workers.
Courts generally look at several factors that determine if a worker is an employee versus an independent contractor and the most crucial of these is the amount of control the employer exerts over the worker (i.e., dictate schedules, how the work is to be done, etc.). The 4th Circuit found that the amount of control the clubs had over the Plaintiffs was enough to create an employer/employee relationship. Judge Wilkinson III noted in the Court’s opinion, “The clubs insist they had very little control over the dancers. Plaintiffs were allegedly free in the clubs’ view to determine their own work schedules, how and when they performed, and whether they danced at clubs other than Fuego and Extasy. But the relaxed working relationship represented by defendants — the kind that perhaps every worker dreams about — finds little support in the record.”
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