Settlement Shows ‘Employee Misclassification’ Can Be an Expensive Mistake (YNOT)

Read the full article by Gene Zorkin at YNOT.com 

RIVERSIDE, Calif. – A proposed settlement agreement filed in a California federal court late last week demonstrates how expensive a mistake it can be to misclassify employees as independent contractors, with the companies behind the Spearmint Rhino chain of agreeing to pay $3.65 million to settle a class action lawsuit filed back in 2017.

The case took flight in February, 2017, when a woman named Adriana Ortega filed a complaint in which she alleged that the defendants had “misclassified dancers as independent contractors and, in so doing, have violated various provisions of federal and California law by (1) failing to pay dancers minimum wage; (2) taking portions of gratuities left for dancers by patrons; (3) failing to provide dancers with accurate itemized wage statements; (4) failing to reimburse dancers for work-related expenditures; (5) failing to keep accurate payroll and employment records for dancers; and (6) failing to pay dancers’ wages when due.”

After considerable wrangling in court, and despite the defendants continuing to maintain they have “substantial defenses” to the claims filed against them, the companies behind the clubs evidently decided that discretion is the better part of valor and began negotiating a settlement with the plaintiff class. 

Gene Zorkin has been covering legal and political issues for various adult publications (and under a variety of different pen names) since 2002.