Vegas, Vegas, Vegas, (And the Vulnerability of Tipped Employees for Minimum Wage Underpayment in the Silver State)

Las Vegas is a great city to visit, partly due to its heavy dependence on the service industry. Recently, though, some professions in its service industry that rely on tips (and whose employers count on those tips to exceed minimum wage in order to not pay regular minimum wages) have been making the news. Most noticeably, card dealers and adult dancers.

Earlier this year, Tennessee Law Blog reported on Vegas wage lawsuits filed by dealers against casinos for illegal tip pooling. (More information on tip pooling available on our Tennessee Employment pages.) Of recent invention, and one major cause of the tip pooling lawsuit, was the casinos’ policy of having dealers’ tips pooled and, allegedly, illegally distributed to pay non-tipped floor supervisors. Like many tip pooling cases employment lawyers see, this was allegedly done to boost pay to the supervisors at the expense of those dealers who legally qualify as tipped employees.

After approximately 55 hours of testimony from dealers and industry experts, the NV State Labor Commissioner stated that the issue would likely not be decided until after the winter holidays. This case has been batted around various local and state courts since 2006 while this potentially illegal pay practice continues. According to the lawsuit, about 500 dealers are deserving of $35 million from the casino in back pay and associated penalties for violating wage and hour law.

Meanwhile, Station Casinos last week asked for its wage and hour lawsuits to be placed on hold as it proceeds through bankruptcy proceedings. Potentially 20,000 current and former workers were shorted on pay because of an illegal “rounding” system used to track hours and not pay for time worked past or before their regularly scheduled shifts. Station Casinos now have a pay practice in place that errs on the side of overcompensating employees.

Elsewhere in Vegas, topless dancers tired of being paid less than minimum wage as independent contractors have filed suit for the regular wages and overtime they were never paid. The Sapphire Gentleman’s Club faces a class action lawsuit from its dancers similar to another approved by the state supreme court last year. The Sapphire, which claims for itself the title of the world’s largest gentlemen’s club, may have to pay for such enormity. If the lawsuit against the Sapphire is certified as a class-action, the wage and hour lawsuit suggests 5,000 former and current part- and full-time dancers employed during the past two years would be able to join. The Sapphire employs around 400 dancers every night.

Like other independent contractor lawsuits, the class action lawsuit states that the Sapphire’s rules regulating the dancers’ work conditions are such that dancers cannot qualify as independent contractors. According to the lawsuit, dancers are required to work a minimum of six hours a shift and are forbidden to leave or socialize with customers during working hours. Additionally, their private lives are regulated by management, they may only wear approved uniforms, and dancers must accept customers’ offers to purchase them drinks.

In previous years, such notable clubs such as Cheetah’s, the Crazy Horse Too, and the Girls of Glitter Gulch have had wage and hour lawsuits pursued by dancers. The lawsuit against the Sapphire seeks the equivalent of minimum wage for the exotic dancers who only earn tips, are paid no hourly rate or benefits, and must pay for the opportunity to work at the gentleman’s club.

Our Higgins Firm employment law attorneys represent underpaid or unpaid workers throughout Tennessee and neighboring states and are experienced in recovering unpaid wages.

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