Following the introduction of AB 5 in 2019, many clubs decided to restructure the way dancers were paid, taking more of the money workers made from private dances. Dancers say that even though they now have a guaranteed minimum wage, their wages have fallen because of the new pay system and reduced hours. According to Teddy, when clubs could only hire dancers as employees, they became more selective about the dancers on the reserve list. “A lot of clubs that may have previously strayed from what we thought were typical strip club hires are actually starting to return to that model as they try to maximize profits,” she added. In the industry, “typical strip club hire” refers to the pale, skinny, young dancers.
Teddy, who is black and describes himself as an “alternative” with piercings and tattoos, suddenly finds it hard to get hired and is forced to find a second job at a restaurant for the first time in years. “It’s really frustrating,” she said, adding that she is now taking a break from 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 were supposed to be employees. While AB 5 does mean dancers get unemployment insurance during the pandemic, it’s not the solution dancers were hoping for. “It didn’t really solve the problem I was having,” Teddy said.
Workers and researchers have warned that the gig economy is distorting the debate over employee status, meaning the issues facing independent contractors in different industries are conflated. “Everyone calls these bills gig bills. But when you look at them, they apply to workers in the digital and analog industries,” Cunningham-Parmeter said. “Even today in 2022, the vast majority of low-wage workers are not gig jobs.”
Other industries are divided on whether AB 5 has a positive impact on the self-employed. Writers and typists have joined the campaign to repeal the law, claiming it would hurt their ability to find work. “Under California AB 5, SpeakWrite cannot accept applications from California residents,” says a job ad posted by transcription service SpeakWrite. Truckers also complained about the AB 5 changes. In July 2022, a team of truck drivers blocked the Port of Oakland in protest at AB 5, saying their new status as employees meant they had less flexibility in when and how they worked.
Before AB 5, California employment officials estimated that companies misclassified as many as 500,000 workers as independent contractors, Cunningham-Parmeter said. He sees the introduction of a minimum wage and overtime protections as a positive development for the vast majority, although some companies will inevitably abuse the spirit of the new law.
“Research shows that companies can save up to 30 percent in wages and labor costs by misclassifying workers as independent contractors,” he said. “So when some businesses, like strip clubs, are finally forced to treat their workers as employees, it’s not surprising that many of these companies are passing these new costs on to workers in the form of reduced wages or hours. “