Denver Strip Clubs Ordered to Pay Nearly $14M for Wage Theft Violations
Two Denver strip clubs, Diamond Cabaret and Rick’s Cabaret, have been ordered to pay nearly $14 million in fines and restitution after a city investigation found widespread wage theft. The Denver Auditor’s Office determined the clubs violated multiple wage laws, including misclassifying dancers, underpaying staff, and forcing entertainers to pay fees just to work. The audit revealed dancers at Diamond Cabaret were not paid wages, were required to split gratuities with management, and were subjected to various fees and fines, with some being charged an $85 “house fee” just to perform. Other employees, including servers, bartenders, DJs, and house moms, were paid below Denver’s minimum wage and had tips unfairly taken by management.
The investigation also exposed a pattern of improper tip-sharing, with managers reportedly collecting hundreds to thousands of dollars in tips per pay period. Some employees reported being forced to hand over a percentage of their gratuities, such as a cocktail waitress who received a $2,000 tip in “Diamond Dollars” (the club’s internal currency) and was required to give 25% to management. When she later voiced concerns, she was removed from the schedule and eventually fired. Diamond Cabaret has been ordered to pay over $4.8 million in restitution and $1.1 million in fines, while Rick’s Cabaret must pay nearly $6.6 million in restitution and $1.5 million in fines.
Although Colorado law does not classify dancers as employees, Denver ordinances recognize them as workers, meaning the clubs must comply with local wage theft laws. The third determination regarding additional wage violations is still pending, and the Denver Auditor’s Office continues to investigate the clubs’ financial practices.
