ATLANTA – Because their services are integral to a gentlemen’s club’s operation, a federal judge has ruled exotic dancers in Georgia are employees, not independent contractors. The ruling could have implications for the adult film industry.

U.S. District Court Judge Thomas W. Thrash Jr. based his decision on provisions of the Fair Labor Standards Act, a federal statute that, among other things, sets regulations for minimum wages, prohibits child labor and sets standards for classification of workers as hourly, salaried or contract labor. In most cases, any business that generates more than $500,000 in annual revenues is subject to the requirements of the much-amended law.

In September 2012, two dancers sued Great American Dream Inc., parent company of Pin Ups Nightclub in Decatur, Ga., claiming the club misclassified dancers as independent contractors in order to avoid paying hourly wages. The plaintiffs also accused the club of violating the FLSA by charging dancers “house fees” that varied based on the shifts to which they were assigned and by requiring dancers to pool tips.

Pin Ups countered that the dancers’ grievances were invalid because, as independent contractors, they were not subject to FLSA rules governing the treatment of employees.

Thrash sided with the dancers in a ruling granting partial summary judgment.

Because the club assigned shifts and controlled the dancers’ earnings, and because the dancers’ services are an integral component of Pin Ups business model, “it is clear that the plaintiffs were ‘employees’ under the FLSA,” Thrash wrote in his decision.

The judge relied on testimony from the club’s general manager and the club’s own policy statements and employee manual to reach his conclusion. Citing similar decisions in Texas, Florida, Indiana and New York, he pointed out that the club’s relationship with dancers met five of six conditions for classifying the women as employees:

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