Strip club operator Scores Holding Co. Inc. agreed to settle a collective class action filed on behalf of dancers, servers and bartenders. Under the terms of the proposed settlement, which still requires court approval, the company would create a $450,000 fund to settle the claims of 83 plaintiffs who opted in to the FLSA collective action.
Plaintiffs alleged that the company was stealing tips through a system called “diamond dollars,” which allows costumers to tip workers in ‘play’ money. According to the Plaintiffs, it was not possible to cash these diamond dollars at all times and the company deduced and retained a portion of the tips. Plaintiffs also alleged that the company failed to pay its workers the statutory minimum wage for all hours they clocked, failed them to pay at a proper overtime rate for all hours they worked in excess of 40 hours, and failed to keep accurate and adequate records of wages, hours worked, and deductions taken from wages.