When we talk about wage and overtime lawsuits, many people do not consider the fact that tips are included in that category. However, tips can be a very contentious issue, especially because employees who earn tips are, in most states, subject to a lower minimum wage than other employees. This is where the attorneys at Chicago Overtime Law Center are here to help.
A recent case involving tips was filed by Diamonde Grant, who worked as an exotic dancer at the Oasis Nite Club in Baltimore, Maryland. The lawsuit alleges that Grant was required to pay a portion of her tips to other employees who do not normally receive tips, such as DJs and security guards. The amount she ended up paying them could be as high as $80 on weekend nights before she was permitted to take her own share of the money. The lawsuit, filed in U.S. District Court, is seeking $200,000 for the money she was forced to pay other employees between 2009 and 2012.
In Maryland, as in many other states, service employees who receive tips must have received enough money from those tips to at least meet state minimum wage requirements.
In general, courts do not look favorably upon cases of tip pooling. Not only is it unfair to the employees who work hard to earn their tips, but it is also deceptive to the patrons who believe that the entirety of the gratuity they choose to pay is going to the person who served them. Other common cases of tip pooling, which have made it to the courts in recent years, include restaurants where waiters are made to share their tips with busboys, chefs, and even shift managers.
Ms. Grant is not the only exotic dancer to file a lawsuit against her employer for tip pooling. Another similar case has been discussed on this blog and other exotic dancers have begun filing similar cases in Maryland, as well as other states.
Another difficulty that exotic dancers face is the fact that their employers often misclassify them as independent contractors. As this blog has discussed, many employers implement this in order to avoid paying their employees overtime wages. However, in order to be classified as an independent contractor, employees must fit certain requirements. These requirements include being able to choose their own hours and having control over what they wear while they are at work. In order to qualify as an independent contractor, an employee must also have a certain level of control over the environment in which they work.
However, this is rarely if ever, the case with exotic dancers. They are frequently told when and where to work and, according to Grant’s lawsuit, she was regularly required to attend meetings at the Oasis Nite Club. Such regular meetings would never be required of an independent contractor. Similar cases involving misclassification of employees have pointed out that independent contractors would not face any disciplinary action as a result of their contracts. As one might expect, such is not the case with tipped employees.