The Gig Law Causing Chaos in California Strip Clubs

Many clubs decided to restructure the way dancers are paid after AB 5 was introduced in 2019, taking larger cuts of the money workers earned through private dances. Dancers say that even though they are now guaranteed minimum wage, their wages dropped as a result of the new pay system and reduced hours. When clubs were able to hire dancers only as employees, they became more selective about which dancers they kept on their roster, according to Teddy. “A lot of clubs which may have before veered away from what we think of as a typical strip club hire really started going back toward that because they were trying to maximize profits,” she adds. In the industry, a “typical strip club hire” refers to dancers who skew white, thin, and young.

Teddy, who is black and describes herself as “alternative-looking” with piercings and tattoos, suddenly found it harder to get hired and, for the first time in years, was forced to get a second job in a restaurant. “It was really discouraging,” she says, adding that she is now taking an indefinite break from dancing.

The strip club industry has its problems. Dancers have been suing clubs for decades for misclassifying them as independent contractors when they claimed they should be employees. Although AB 5 did mean dancers received unemployment insurance during the pandemic, it was not the solution dancers were hoping for. “It didn’t really answer a problem I was having,” says Teddy.

Workers and researchers warn the gig economy is warping the debate about employee status, meaning that the problems faced by independent contractors in different industries are being lumped together. “Everyone talks about these bills as gig worker bills. But when you look at them, they apply to workers across industries, digital and analog,” says Cunningham-Parmeter. “Even today, in 2022, the vast majority of low wage workers are not gig workers.”

Other industries are divided about whether AB 5 had a positive impact on self-employed workers. Writers and typists are among those who have campaigned to repeal the law, claiming it hurts their ability to find work. “Due to California law AB 5, SpeakWrite cannot accept applications from California residents,” says one job advert posted by transcription service SpeakWrite. Truckers have also complained about AB 5’s changes. In July 2022, a convoy of truckers blockaded the port Port of Oakland to protest AB 5, arguing their new status as employees meant they have less flexibility in when and how they work.

Before AB 5, California employment officials estimated that companies misclassified up to 500,000 workers as independent contractors, says Cunningham-Parmeter. He believes the introduction of minimum wage and overtime protection was a positive development for the vast majority, even if  some companies abuse the spirit of the new law.

“Studies indicate that companies can save up to 30 percent of payroll and labor costs by misclassifying their workers as independent contractors,” he says. “Therefore, it should come as no surprise that when some businesses, like strip clubs, were forced to finally treat their workers as employees, many such firms passed those new costs on to workers in the form of reduced wages or hours.”

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