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- Exotic dancers are suing an Alabama strip club, saying it made them share tips and pay 'house fees.'
- The lawsuit accused the club of violating Fair Labor tipped-employee compensation provisions.
- The dancers also argue that they were denied minimum wages, and subject to illegal kickbacks.
Exotic dancers are suing an Alabama strip club for at least $100,000 in compensatory damages, alleging that it forced them into giving up hard-earned tips to pay other workers.
In a complaint filed on April 7 in the Northern District of Alabama, the strippers accused Sammy's Gentlemen's Club in Birmingham of taking their tips and also demanding "illegal kickbacks."
The lawsuit accused Sammy's of violating the Fair Labor Standards Act, specifically the tipped-employee compensation provision, which requires that employers pay a tipped worker a minimum of $2.13 per hour.
Last year, an East Coast restaurant chain was ordered to pay $11.4 million to more than 1,300 employees over claims it paid staff below minimum wage.
According to this latest lawsuit, the strip club did not pay the dancers wages; their income came solely from customers' tips, a portion of which they were contractually obliged to pay to Sammy's.
The lawsuit said they were also forced into paying "house fees" to allow them to work there, which was tantamount to unlawful kickbacks, or bribes, it said, as well as being subject to fines and other mandatory payments.
According to the Fair Labor Standards Act, employers may take a tip credit worth up to $5.12 per hour. But all tips received by an employee must be retained by them, except in tip-pooling arrangements limited to employees who "customarily" receive tips, according to the US Department of Labor.
The strippers said in the lawsuit that they were made to share their tips with other employees, including DJs, managers, and "house moms."
The lawsuit also claimed that the dancers were misclassified as independent contractors during their employment, and denied minimum wage and overtime pay.
Last year, a federal judge ruled that former exotic dancers at another Birmingham strip club, The Furnace, had been employees, not independent contractors.
The dancers at The Furnace had also argued that they were denied minimum wages and were forced to share tips and pay house fees.
Sammy's did not immediately respond to a request for comment from Business Insider.