Denver businesses ordered to pay back millions in wages stolen from strip club employees
Hundreds of Colorado workers say the money they earned was stolen from them, and now two Denver businesses have been ordered to pay back millions.
According to the Denver Auditors' Labor Division, more than 200 employees of two strip clubs were victims of what they said was widespread wage theft.
The division said Diamond Cabaret and Rick's Cabaret strip clubs misclassified entertainers as exempt from wage and hour laws, violating minimum wage laws. The labor office said those clubs also required strippers to pay both a "house fee and promo fee" and routinely took tips from workers.
Denver Labor Executive Director Matthew Fritz-Mauer said his office faced challenges obtaining records from those businesses, and that there might be more penalties to come.
"This is a systemic issue," said Dewey. "I think that's what's really important about this, it will get a lot of other entertainers and other places thinking and organizing together and also get a lot of other clubs understanding that accountability will come. If you are making money off of exploiting and stealing from people, then you have to find a different job."
Devynn Dewey, one of the entertainers who works at both clubs to pay for her college tuition, is now owed more than $200,000 in stolen wages and damages.
"They told us they didn't have any records for entertainers, for example, reflecting their schedules or the hours they worked, and that just was never true. And, as our determinations noticed, during this investigation they destroyed some documents we asked for, which reflected tip splits between bartenders, servers and managers. And so, it has been more difficult than the average investigation," said Fritz-Mauer.
According to the Denver auditor, if restitution is not paid by mid-March, wage theft penalties will increase to 150% of unpaid wages. The clubs can appeal these determinations and have already said they plan to do so.
Both clubs are owned by RCI Hospitality Holdings. An attorney representing that company did respond to CBS Colorado's request for comment in part stating, "Diamond Cabaret and Rick's Cabaret have fully complied with the law. Yet Denver Labor, in a display of unchecked government overreach, continues to demand access to private business records beyond their legal authority, despite the complete absence of any substantiated claims of wage theft. These demands are not about justice, they are about control."
