DENVER (KDVR) — Two Denver strip golf equipment had been instructed they owe practically $14 million in restitution and penalties for wage theft after the golf equipment reportedly “violated practically each relevant provision” of Denver’s minimal wage and civil wage theft ordinances.
The 2 strip golf equipment topic to the determinations and investigations had been the Diamond Cabaret, positioned on Glenarm Place, and Rick’s Cabaret on Stout Avenue.
The Denver Auditor’s Workplace stated it started investigating the Diamond Cabaret, which is operated by Glenarm Eating Providers, in Might 2023 as a result of strip golf equipment are recognized to have a excessive danger of wage and hour violations. The workplace stated the membership’s wage theft was “half and parcel” of its enterprise mannequin, stealing tens of millions from bartenders, servers, DJs and entertainers over time.
“The Diamond is dependent upon the onerous work of its entertainers, servers, bartenders, and different employees who create the hospitality expertise which attracts purchasers — and the Membership’s operations contain widespread wage theft in opposition to the very employees who make the enterprise profitable,” the auditor’s workplace wrote in its willpower letter for the Diamond Cabaret.
Denver Labor stated the golf equipment had many violations, together with:
- Misclassifying dancers as exempt
- Failing to pay dancers and different employees Denver’s minimal wage
- Stealing cash from entertainers by requiring they pay charges “for the privilege of working”
- Misclassifying employees as tipped meals and beverage staff to be able to pay them a sub-minimum wage, after which making the most of the tip credit score by taking a share of suggestions whereas paying meals and beverage staff a sub-minimum wage
- Misclassifying DJs and the home mother as meals and beverage employees eligible for the tip credit score
Cabaret administration accused of ‘widespread wage theft’
The willpower relating to the Diamond Cabaret mentioned how a employee’s wages had been stolen in 2024. The Denver Auditor’s Workplace famous that, on the time, minimal wage was $17.29, however the Diamond Cabaret was allegedly trying to pay a employee solely $14.27.
“The Diamond has underpaid each tipped worker by $3.02 per hour for each hour labored for greater than two years,” the auditor’s workplace acknowledged in its willpower. “This tip theft pales compared to the Membership’s remedy of its entertainers, nevertheless. The Diamond misclassifies these ladies, pays them nothing, takes gratuities they earned for his or her work, and claims they haven’t any office rights.”
These gratuities embrace an as much as $85 “home payment” that dancers should pay to work on the Diamond Cabaret, the auditor’s workplace stated. Moreover, the dancers can be assessed an $8 “promo payment” after which had been fined in the event that they violated sure guidelines.
Beneath Colorado regulation, the dancers are not labeled as staff, the Denver Labor Division clarified. However underneath Denver ordinances, they’re “employees.” Due to this, the auditor’s willpower doesn’t require adjustments within the working situations besides that the Diamond can now not commit wage theft in opposition to them.
The determinations communicate at size about conditions the place employees had been tipped tons of, if not hundreds, of {dollars}, after which had been pressured to separate their suggestions with administration. The auditor’s workplace stated the one report of those tip splits is thru “Gratuity Obtained Declarations.”
“Since 2022, managers have reported important gratuities,” the auditor’s workplace wrote. “In most pay intervals, every supervisor on the Diamond reported tons of, typically hundreds, of {dollars} in suggestions … These examples replicate a sample that persists in each pay interval courting again greater than two years. Whilst managers had been reporting important suggestions, the Membership was paying DJs, the home mothers, bartenders, servers, and barracks on the sub-minimum wage.”
The auditor’s workplace famous that the membership additionally claimed that it isn’t the employees sharing suggestions with administration, however the reverse.
“The Membership claims that managers share as much as 75% of their suggestions with employees,” the auditor’s workplace famous. “This flawed reasoning is said to the Employer’s third argument: That nothing about its tip-sharing observe is illegal as a result of managers are ‘working straight with the visitors,’ ‘offering a wide range of buyer providers,’ and the regulation permits managers to maintain suggestions that they obtain ‘straight from prospects primarily based on the service that she or he straight and solely offers.'”
Rick’s Cabaret had comparable conditions and is going through nearly the identical accusations. Rick’s was assessed a tremendous of $1,566,199.95, owed to town of Denver. Diamond was assessed a tremendous of $1,148,470.48.
Moreover, the Diamond is required to pay over $4.8 million in restitution, and Rick’s is required to pay practically $6.6 million in restitution.
Third willpower’s end result pending in opposition to membership
The auditor’s workplace additionally shared a willpower stemming from a separate investigation in 2024 that delves into the scenario that resulted in an auditor’s workplace’s investigation the place a cocktail waitress obtained a $2,000 tip from considered one of her tables in “Diamond {Dollars},” an inner forex on the strip membership, and was instructed by a supervisor she wanted to present 25% of her tip to administration. In accordance with the willpower, the waitress finally gave in and handed over about $500. She was then pressured to present an extra $25.
After assembly with administration to debate her discomfort relating to the interplay, the employee was faraway from the work schedule, and she or he was instructed she had been demoted again to TLC. A number of weeks later, the membership terminated the employee’s employment, the auditor’s workplace acknowledged.
The result of this willpower continues to be pending.
