DENVER — Two Denver strip clubs, Diamond Cabaret and Rick’s Cabaret, have been ordered to pay a total of $14 million as a result of an investigation conducted by the Denver Auditor’s Office. The investigation revealed that more than 230 workers, including entertainers, bartenders, servers, and other staff, had been victims of wage theft and questionable workplace practices at both establishments.
The Denver Labor division of the auditor’s office found that the strip clubs misclassified entertainers as exempt from certain labor laws, resulting in inadequate payment for their work. Additionally, dancers were required to pay fees to work, perform on stage for a specific amount of time, and faced fines for various infractions. Customers were found to have engaged in inappropriate behavior towards entertainers, with managers failing to intervene.
Managers at both clubs were also found to have taken tips from staff, with tipped workers being required to contribute a portion of their earnings to a fund known as “The Rusty Envelope.” Diamond Cabaret was accused of destroying crucial documents during the investigation, although workers had already provided proof of their existence.
The clubs have been ordered to pay $11.358 million in restitution to the workers and $2.6 million in fines to the City and County of Denver. If the restitution is not paid by March 13, 2025, the amount will increase to 150% of the unpaid wages. Denver Labor Executive Director Fritz-Mauer emphasized that entertainers have the same rights as other workers in the city and should not be subjected to illegal workplace practices. The clubs have the option to appeal the findings, but as it stands, they must comply with the restitution order.
