Many clubs decided to restructure the way dancers are paid after the introduction of AB 5 in 2019, receiving bigger cuts in the money workers made from private dancing. Dancers say that although they now have a guaranteed minimum wage, their wages have fallen as a result of the new wage system and reduced hours. When clubs could only hire dancers as staff, they became more selective about which dancers they kept on their roster, according to Teddy. “A lot of clubs that have deviated from what we think of as a typical strip club rental before have really started to return to that because they were trying to maximize profits,” she adds. In the industry, a “typical strip club rental” refers to dancers who skew white, thin, and young.
Teddy, who is black and describes himself as “alternative” with piercings and tattoos, suddenly found it harder to get hired and was forced to take a second job in a restaurant for the first time in years. “It was really discouraging,” she says, adding that she’s now stopping dancing indefinitely.
The strip club industry has its problems. Dancers have been suing clubs for decades for misclassifying them as independent contractors while claiming they should be employees. While AB 5 did mean that dancers got unemployment insurance during the pandemic, it wasn’t the solution dancers were hoping for. “It didn’t really solve a problem I had,” Teddy says.
Workers and researchers warn that the gig economy is distorting the debate about employee status, meaning that the problems facing independent contractors in different sectors are lumped together. “Everyone talks about these bills as gig worker bills. But if you look at them, they apply to workers across all industries, digital and analog,” says Cunningham-Parmeter. “Even today, in 2022, the vast majority are of the low-paid workers are not gig workers.”
Other sectors are divided on whether AB 5 had a positive effect on the self-employed. Writers and typists are among those who have campaigned to repeal the law, claiming it hurts their ability to find work. “Due to California’s AB 5 Act, SpeakWrite cannot accept applications from California residents,” says a job posting posted by transcription service SpeakWrite. Truckers have also complained about AB 5’s changes. In July 2022, a convoy of truck drivers blocked the Port of Oakland to protest AB 5 because their new status as employees meant they had less flexibility in when and how they work.
Before AB 5, California labor officials estimated that companies misclassified up to 500,000 employees as independent contractors, Cunningham-Parmeter says. He believes that the adoption of minimum wages and overtime protection was a positive development for the vast majority, although it was inevitable that some companies would abuse the spirit of the new law.
“Studies show that companies can save up to 30 percent in payroll and labor costs by misclassifying their employees as independent contractors,” he says. “Therefore, it should come as no surprise that when some companies, such as strip clubs, were forced to finally treat their employees as employees, many such companies passed on new costs to employees in the form of lower wages or hours.”
