Is it Legal for Strip Clubs to Charge House Fees to Strippers and Exotic Dancers?

In California, strippers and exotic dancers have legal protections when it comes to tips left by customers. However, some strip clubs attempt to take a portion of dancers’ tips or impose mandatory fees that cut into their earnings, which may violate state labor laws. Knowing what steps to take if a club unlawfully withholds or distributes tips is crucial for dancers looking to protect their rights and income. This guide outlines key actions a stripper can take if they believe a strip club is violating California’s tip laws, helping them navigate the process of reclaiming their hard-earned tips and holding employers accountable.

By Brad Nakase, Attorney

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Table of Contents
1. Law: Tip-Pooling and Management’s Role in Tip Distribution in California
2. Explanation
3. Examples
4. What can you do?
5. Conclusion

Law: Tip-Pooling and Management’s Role in Tip Distribution in California

In California, labor laws protect workers’ rights regarding tips. Under California Labor Code Section 351, all tips left for employees are the sole property of the employees to whom they were given. This law prohibits employers or their agents (such as managers) from taking any portion of the tips intended for employees. The purpose is to ensure that employees—strippers, exotic dancers, or other tipped workers—receive the full amount of gratuities given to them by customers.

Explanation

Employee Rights to Tips:
Under California law, strippers and exotic dancers who receive tips directly from patrons should rightfully keep all tips, as these are considered the property of the dancer. The law is clear that tips, including cash left by customers, belong solely to the workers for whom they are intended. Any practice where management, house, or employers keep a portion of the dancer’s tips violates these protections.

Illegal Tip-Pooling for Managers and Owners:
While California allows “tip pooling” among employees, meaning tips can be shared among similarly situated employees (such as servers sharing with bussers in a restaurant), it is illegal for employers, managers, or owners to take any portion of pooled tips. Specifically for strippers and exotic dancers, this means the house or managers cannot lawfully collect a portion of dancers’ tips unless that money goes directly to other employees involved in the service, such as support staff who play an immediate role in helping the dancers perform their jobs.

Illegal Deductions:
In many cases, strip clubs or similar venues may try to justify taking a portion of dancers’ tips under the guise of “house fees” or other fees for using the facilities. While club owners can impose certain fees (like stage rental fees), they cannot deduct these fees directly from tips, nor can they take tips to offset wages or other costs.

Examples

  1. Example of Illegal Tip Taking:
    • A club requires exotic dancers to give a percentage of their nightly tips to the house manager. Under California law, this practice is illegal. The manager, as an agent of the employer, cannot take any part of the dancer’s tips.
  2. Example of Illegal Tip Pooling Involving Management:
    • If a club mandates that tips collected by strippers or exotic dancers be divided among all staff, including managers, this is unlawful. Managers are not entitled to employees’ tips and cannot participate in tip-pooling arrangements.
  3. Example of Permissible Tip Pooling Among Employees:
    • If a strip club requires that tips be shared with DJs or other floor support staff who directly assist the dancers, this may be permitted under California law. However, any tip-pooling arrangement cannot involve supervisors or managers and must be limited to employees who interact directly with customers or support the dancers’ performances.

What can you do?

If a stripper believes that a strip club is violating California tip laws by taking or misappropriating tips, there are several actions they can take:

1. File a Complaint with the California Labor Commissioner

  • The stripper can file a wage claim with the California Division of Labor Standards Enforcement (DLSE). This is often the first step in recovering any tips that were unlawfully taken by the club or its management.
  • The DLSE will investigate claims related to tip violations, wage theft, and other labor law issues. If the investigation confirms the violation, the stripper may be entitled to recover all tips owed, plus potential penalties.

2. Document Evidence of Violations

  • It’s important to gather and keep records of all evidence, including:
    • Pay stubs (if applicable)
    • Tip statements or records of daily earnings
    • Communications from management (such as texts or emails) discussing tip arrangements or deductions
    • Witnesses who can corroborate unlawful practices.
  • Documenting evidence is crucial for building a case, as the more proof available, the stronger the claim in case of a formal complaint or lawsuit.

3. Seek Legal Advice

  • Consulting with an attorney who specializes in employment or labor law can be beneficial, especially one experienced with independent contractors and wage disputes in the adult entertainment industry.
  • A lawyer can assess the case and may assist in filing a lawsuit if necessary. They can also help the stripper understand their specific rights under California law and may provide guidance on how to proceed with litigation or negotiation.

4. Join a Class Action Lawsuit (if applicable)

  • If other dancers in the same club are experiencing similar violations, a class action lawsuit might be an option. In this scenario, multiple dancers can join together to take collective action against the club, potentially strengthening the case and bringing more attention to the issue.
  • Class actions are particularly effective if the club has a pattern of tip violations, as they can result in broader penalties and recovery for all dancers involved.

5. Report the Club to California’s Department of Fair Employment and Housing (DFEH)

  • If there is discrimination, harassment, or retaliation related to complaints about tip violations, the stripper can report these issues to the DFEH. California law prohibits retaliation against employees for asserting their rights, including their right to keep their tips.
  • Reporting retaliation can help protect the stripper from wrongful termination or punitive measures taken by the employer in response to complaints.

Conclusion

For strippers and exotic dancers working in California, it is illegal for managers or the house to take any portion of their tips, as tips are the dancers’ personal property under California Labor Code Section 351. While tip pooling among fellow employees (excluding management) is sometimes allowed, it’s crucial that dancers know they are legally entitled to keep the entirety of their tips without interference from management.

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