Rick’s Cabaret in New York City has agreed to pay up to $15 million to settle claims that it failed to pay its dancers minimum wage because they received tips. A class action against Rick’s also alleged that it illegally collected “tip-outs,” fees the dancers paid to the cabaret in order to work — $20 per shift for management, $20 for the disk jockey and $20 for the “house moms.” The tip-outs during the class period, from 2005 through October 2012 were estimated at $8 million.
The actual amount paid will be determined based on the number of class members responding by the end of a three-month notice period. Final court approval is expected after that. Payments to class members will be made approximately 7-14 days following final approval.
Representing the plaintiffs were Steven A. Smith, E. Michelle Drake and Anna P. Prakash of Nichols Kaster.