Back To Career News

Adult Dancers Receive $10M Settlement in Minimum Wage Class Action Suit


Every state has different wage laws. Some have substantially higher minimum wages than the federal minimum wage, while others do not. Some states allow employers to pay tipped employees less than the normal minimum wage, while others do not. But a recent case involving New York City adult dancers points out that one thing employers cannot do anywhere: force someone to work exclusively for tips and refuse to pay him or her any wage at all.

tip jar 

(Photo Credit: Michael Elliott/

New York Adult Dancers Receive $10 Million Class Action Settlement for Minimum Wage Violations

Do You Know What You're Worth?

The New York Daily News reports that a group of New York City adult dancers has received a $10 million settlement due to minimum wage law violations. The dancers worked at Rick’s Cabaret and filed a lawsuit back in 2009 claiming that they should have been paid the minimum wage. The club had not been paying them any wage at all and instead had been charging them $60 per shift for the privilege of working at the club. The club also took $2 of every $20 worth of “dance dollars” patrons purchased — this was the club’s way of allowing patrons to use credit cards at the establishment but having some form of currency to give directly to the dancers. Ultimately, a judge has decided that the club must pay $10.8 million to the dancers for the minimum wage and tip retention violations. The dancers’ claims about the $60 shift fees will be decided later by a jury at a trial.

Things To Know About Tipped Workers and Minimum Wage

? Under a federal law called the Fair Labor Standards Act (FLSA), any covered nonexempt employee must be paid at least $2.13 per hour. State laws may set a higher wage.

? Under the FLSA, if that $2.13 plus the amount of tips collected is not equal to the regular federal minimum wage, then the employer must make up the difference.

? Only tips that are actually received by the employee can count toward the minimum wage amount.

? Employers can require tip pooling under the FLSA, but it is only allowed among employees who regularly receive tips like servers and bartenders. So a valid tip pooling arrangement for FLSA purposes cannot include dishwashers, cooks, or other untipped employees.

? Tips are the exclusive property of the employee and cannot be taken by an employer.

? Minnesota, Montana, Washington, Oregon, Nevada, California, Alaska, and Guam require employers to pay workers the full state minimum wage before their tips.

Tell Us What You Think

Do you know someone whose boss expects them to work exclusively for tips? We want to hear from you! Leave a comment or join the discussion on Twitter.

Daniel Kalish
Read more from Daniel

Leave a Reply

Notify of
What Am I Worth?

What your skills are worth in the job market is constantly changing.