Two Denver strip clubs are on the hook for $14 million in back pay and penalties to their workers.
That hefty penalty is the result of a months-long investigation from the Denver Auditor’s Office into workplace practices.
The two strip clubs, Rick’s Cabaret and Diamond Cabaret, have denied the findings of the investigation. They both sued the city and members of the auditor’s office in return, alleging government overreach.
In the meantime, the strip clubs have missed the deadline to pay back the city and workers, risking daily fines.
Colorado Matters and Denverite spoke with Matthew Fritz-Mauer, who leads the auditor’s office’s labor division, and Devynn Dewey, one of the hundreds of workers who were found to be victims of the strip clubs’ questionable work practices.
Read the interview
This interview has been edited for clarity and length. You can listen to Colorado Matters’ full interview here.
Ryan Warner: What prompted your office to investigate these strip clubs in the first place?
Matthew Fritz-Mauer: We opened these investigations based on an anonymous complaint that I got from someone at a community event, but also a great deal of research that shows bars and restaurants, and especially strip clubs, are at really high risk for wage theft.
RW: What is wage theft and what does it look like at a strip club?
MFM: Wage theft has a really simple, broad definition. It happens anytime a worker isn't paid the money that they've earned. And so this could be money they've been promised. Think of a day laborer outside of Home Depot. It could be the minimum wage, which is $18.81 in Denver. It could be overtime, or paid sick, leave, or paid rest breaks.
At a strip club, at least according to our investigations, wage theft looks like many of the above. We found widespread minimum wage violations, not just among entertainers, but also among servers and bartenders, DJs, and other workers.
RW: There are some specifics laid out that I'd like to dig into. One is that there are things called house fees, promo fees, and mysteriously, the “Rusty Envelope.” What are we talking about here?
MFM: Yeah, so this industry is a little bit unique in the form of wage theft. Every time an entertainer goes to work, she has to pay money for the privilege of working.
Think about if you went to a sandwich shop and the person who rang you up had to pay $80 to use their cash register for the day. So they're paying what's called a house fee, which is “I can work here”. And then there's an $8 promo fee that these clubs implemented sometime in 2024. And then beyond that, there are sometimes fines for supposed performance violations, rule violations.
RW: And that's where the Rusty ... What was it now? The-
MFM: The Rusty envelope.
RW: The rusty envelope.
MFM: At least at Rick's Cabaret, and we understand also at Diamond Cabaret, people are sometimes required to put a share of their tips into an envelope for the regional manager. At Rick's Cabaret, this was often servers and bartenders who had to do this. At Diamond Cabaret, our understanding is it was a share of the tips that managers were retaining for work performed by entertainers, servers, and bartenders.
RW: Which you see as theft?
MFM: Absolutely. Yeah. Managers, owners, they can't take a share of tips. Tips belong to workers.
RW: You used the idea of like a sandwich maker having to pay to use the cash register. I used to get my hair cut from someone who paid a booth rental. So she didn't work for the salon, she paid like a little bit of rent to have that chair, and mirror, and drawers with brushes and hair dryers and such. Aren't there lots of examples of a facility charging an artist or a skilled person to use their infrastructure?
MFM: Maybe. I question whether someone who cuts hair is ever not an employee who just gets to work at the salon that they work for. And the reason for that is that they're really operating in the salon during the salon's hours. They're doing the main work of the salon. That arrangement that you just described, it's at least questionable under the laws that we enforce.
I think the bigger takeaway here is that entertainers are workers just like anyone else, and they have rights just like anyone else. So whether you want to compare them to someone with a cash register at a sandwich shop, or someone stocking shelves at a grocery store, they have the same right to work and to earn without having to pay a fee in order to do that.
RW: Is this primarily a tip-driven career, to be an adult entertainer?
MFM: The answer is yes and no. It's yes, because none of these entertainers are being paid anything. The minute they walk in, they're paying these fees and they are immediately in the red. And they have to get tips, and they have to get performance fees in order to make money.
We think that's illegal, which is why we think that these are people who deserve a stable wage just like anyone else. Many entertainers have told me about nights where they go to the club, they pay quite a lot of money to work, and then it's slow and they leave with less money than they started after working for hours.
RW: This affects some 230 workers, many of whom testified and shared documentation. How critical was that to the case, and what sorts of stories did they share?
MFM: Extremely critical to the case. As I said, we opened these investigations on our own, but people started to come forward. One thing I really want to stress is that of those 230 workers, only two were entertainers because these clubs withheld, illegally we think, records showing the time that entertainers spent working. And so what we have found here, we believe is the tip of the iceberg for wage theft.
RW: At those institutions or more broadly?
MFM: At those institutions in particular. We spoke to a number of bartenders and others who had stories of retaliation, of managers just taking money from them for work they performed. Of earning less than the full minimum wage because even as they were classified as tipped employees, they were having their tips taken.
RW: Devynn Dewey used to perform at Rick's and continues to do so at Diamond Cabaret. And Devynn, thanks for being with us.
How do you believe you were being taken advantage of?
Devynn Dewey: The house fees. This $8 promo fee that was implemented in August of 2024. If we are doing dances or we go to do a private suite, or we just want to continue talking with a client, but we're called on stage, we have to pay $25 per half hour to be off-stage. And what other industry is there where you're continuing to do your job and then you get charged?
Not only that, but the way we are continuously silenced or punished in this industry for speaking up. And so many of us know and are not happy with the way things are ran in clubs, but speaking up is not something that's taken lightly with owners and management. And so that is where we need separate intervention by like Denver Labor, the auditor's office, to make those checks and balances happen.
RW: What does retaliation look like? Have you been retaliated against?
DD: Retaliation comes in a lot of different forms, and I think sometimes it can be maybe more subtle or passive-aggressive. I think it can look like smear campaigns, managers or owners decide that they're going to turn your coworkers against you with lies. It can start like that. It can look like blacklisting. That's pretty common.
And they'll ensure that you're not, or at least have a much harder time getting hired at other clubs. So there's so many risks that have come with speaking up in this industry overall. That's why it's gone so many decades with such little change.
MFM: And if I can just add something, Ryan. We have issued retaliation determinations against Diamond Cabaret.
We've issued three for three different workers who spoke up for their wage rights. They opposed wage theft. Two of them gave us a great deal of information related to this case and they were fired for it.
RW: We're going to articulate in just a bit some of what the cabarets are saying in response to this, but there is more I want to understand about your experience. Devynn, hearing you talk, it sounds like you were constantly nickel and dimed.
DD: Yeah, absolutely. And we're told that this is the standard. We don't have any sort of negotiating or bargaining power with the contracts that we sign or the house fees that we pay. It's you pay it or you leave. Plus we tip out. We, of course, tip out DJs and house mom and our security.
RW: Do you think that whatever judgment exists in society around adult entertainment has an effect of stifling open conversation about working conditions?
DD: Oh, yeah. Absolutely. It can feel dangerous to speak out, not even on this level, but just to tell people what you do for work or to apply for a different job, maybe like a 9 to 5. There's this pressure to sort of make up this other life so that you can just continue to live or secure opportunities for yourself. And that's how we've gotten here, where people are shocked just hearing about what is our normal. But it's because there's so many levels of stigmatization that allow for this to happen and continue.
RW: You continue to dance at Diamond Cabaret. Why do you continue the work? Is it something that you love? Is it something that you feel is hard to switch from? Where's your head at these days?
DD: Well, I'm in school full-time, and I really enjoy being able to have the schedule that I do so that I can commit to being a full-time student. And also paying for school and being a non-traditional student, I started school later, I have bills too. So it's just like any other job. Some days I definitely don't love it. Some days it's cool, it's fine. But at the end of the day, it's just a job and I'm certainly not going to stop just because of this or speaking out, or whatever.
RW: What are you studying?
DD: Neuroscience and philosophy.
RW: Do those studies give you any insight to what's happening in this other aspect of your life?
DD: Sure. The impacts of wage theft and stigmatization, or these different levels of harm towards sex workers, can certainly impact the brain. Philosophy, definitely. I mean, talk about the ethics behind labor violations or labor laws. And this job is very much the reason I got back into school.
RW: Indeed, Diamond and Rick's cabarets are suing the city over this investigation and its findings. And I'll note as well that Matthew Fritz-Mauer, they're suing you in your official capacity in the auditor's office and you as a person, as a private citizen.
They believe that this is government overreach, that they were unfairly targeted. And I'm just going to read a quote from the suit. "If left unchecked, Denver Labor's reckless abuse of power and disregard for the limits of statutory authority will set catastrophic precedents that jeopardize every business worker and entrepreneur in Denver." Let me have you respond first to that quote.
MFM: That's a big slippery slope. We are enforcing the minimum wage for workers in Denver. I don't see the catastrophe.
RW: It's interesting you say slippery slope. I think that's how they view it.
MFM: I think they view it as we are down the slippery slope and into full tyranny. I just disagree. Again, we're talking about hundreds, maybe even thousands, of people, we don't know, who have gone to work for these clubs' benefit, for the benefit of their parent company, and have made $0 per hour while doing so, and in fact have gone into the negative because of the fees that they have to pay. This is a minimum wage.
RW: Are you painting the most severe picture of this work? In other words, I gather there are times it's quite lucrative.
MFM: No, I don't think I am. Look, the point of labor laws is to provide stability and dignity to people who do dignified work. That includes entertainers. If you have a steady hourly wage, then you don't have to depend on gambling every time you go to work. Going to work, working for the benefit of another business, a more powerful entity, it shouldn't result either in some range of, "I lose $100 tonight because I don't make any money and I have to pay all these fees, to, "I make $5,000 tonight because I got lucky." It's really hard to plan a life around that.
RW: Are there nights, Devynn, you just left having lost more money than you made?
DD: Oh, definitely. That's like a universal experience. I won't say it happens all the time, but every entertainer definitely has. And it's devastating because you've just taken your clothes off and paid the club to do so, and they've benefited off of that. And that's a really not great thing to carry on your shoulders when you leave there.
RW: Have you thought of a union, Devin?
DD: Yeah, for quite some time. And I'm definitely not the only one in Denver in this industry who has thought about that. And unionizing in general is not easy, but there is a particular difficulty with unionizing in this industry.
And I will say, I think we need more than that sometimes. I think we need this sort of investigation to happen. There's legislative talks around the country, and even recently Washington state had a bill specific to strippers because of these unique vulnerabilities and this decades-long standing issue.
So regardless of how lucrative it can be, things can always be better. We're talking about basic working conditions too, beyond minimum wage too. So I think there's so many layers to this investigation and what it seeks to do.
