In a setback for that state’s thriving adult entertainment business, the Nevada Supreme Court yesterday ruled that Sapphire Gentleman’s Club improperly classified its 6000+ semi-nude performers as independent contractors rather than employees under Nevada’s minimum wage law.  Terry et al. v. Sapphire Gentlemen’s Club et al., case number 59214, 10/30/14.

The Nevada court, citing policy considerations, adopted the FLSA’s “economic realities” test under state law, and concluded that under “the totality of the circumstances of the working relationship’s economic reality, Sapphire qualifies as an employer under NRS 608.011, and the performers therefore qualify as employees.”

Like many businesses using non-employee service providers, the adult entertainment industry has faced numerous challenges to its practices in recent years.  Companies must assess their employment practices in light of the Terry ruling and the applicable law in their jurisdiction.