Fly-by-night staffing companies that choose to hire people as independent contractors or under-the-table are able to accept lowball contracts from event operators. When these events go smoothly, which is typically the case in a city like Las Vegas that is built off hospitality and special-event expertise, no red flags are raised and all parties involved walk away from the arrangement happy enough.
But sometimes things go wrong.
When they do, it’s workers who are left most vulnerable.
Things went very wrong on 1 October 2017, and the struggle over lost wages and employment classification fought by bartenders in the ensuing weeks and months sheds light on an overlooked labor issue that many in the hospitality industry turn a blind-eye to.
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One year ago, Stephen Paddock shot out the window of a suite at the Mandalay Bay Hotel & Casino and opened fire on a crowd of 22,000 at the Route 91 Harvest Music Festival taking place in an outdoor venue across the street. Concertgoers, bartenders and event security dove for whatever cover they could find. They fled, some of them over chain-link fences, many helping others along the way. They left behind their purses, cell phones and jars filled with cash tips from the thousands of country music fans. When the dust settled, 58 people were dead and hundreds more injured.
It may seem crass to think about money after a tragedy, but many of the bartenders had to. They had mortgages and bills to pay, children to feed. Some didn’t have savings or paid leave to pull from. Workman’s compensation wasn’t an option. They’d been expecting hundreds of dollars in tips to be paid out that night after the concert ended. The morning of the shooting managers told them bar sales were phenomenal and higher than previous years. Most considered the cash tips a lost cause, but they also knew that the majority of tips hadn’t been in cash but were electronic. Every concertgoer had a wristband they could connect to a credit card. Wristbands could be scanned at bar registers, meaning payments were easy and the drinks flowed merrily. According to bar staff, most patrons took advantage of it.
Rumors began to fly via text and social media — that MGM Resorts, which owned the venue where the concert took place, was claiming the money as its property; that the FBI had it and would not release the money; that the money was pocketed by greedy managers. Nobody was quite sure where the money was, if there was money at all.
A week after the shooting, the bartenders were invited by the men who’d managed them to pick up checks. Most were for $757, less than what many expected. In order to receive the check, they were asked to sign documents stating they were owed no additional money and would not sue Roar Staffing + Production, the company that had recruited and managed them for the festival.
Placing an additional condition on someone before relinquishing a payment owed to them is illegal under Nevada Revised Statutes. Not everyone knew this.
Some signed reluctantly. Others outright refused to.
Legal Aid Center of Southern Nevada, which began helping victims with legal issues immediately after the shooting, began hearing some of these stories. Not experts themselves in wage issues, they directed bartenders to pro bono attorneys who offered to help. Many of the bartenders weren’t sure if they were employees or independent contractors. They couldn’t recall what paperwork they’d filled out prior to working the event. No one was quite sure how much in tips was collected.
With assistance from pro bono attorneys, bartenders began filing complaints with the Nevada Office of the Labor Commission.
As these complaints began to be filed — in the end there would be 32 of them — some people began receiving backdated employment paperwork from Backyard Village BBQ — the company contracted with the festival. That further confused people.
In a letter submitted to the Labor Commission on Oct. 22 in response to a request for information about the initial batch of complaints, Roar claimed it had no employees and “acted as a recruiter only” for Backyard BBQ Village Corp. It also stated it was suspending all business operations. The letter was signed by Geoff R. Hinds, who in addition to being the registered agent for Roar Staffing + Production is the CEO and general manager of the San Bernardino County Fair & Event Center in Victorville, California.
Weeks after the shooting, Hinds told a Victorville newspaper he knew the event promoters and vendors and was at the concert to support and assist the Route 91 team.
Hinds could not be reached for comment by the Current.
The Office of the Labor Commission, which is headed by Labor Commissioner Shannon Chambers, decided after its investigation that Roar was not simply a recruiter but was instead a private employment agency (the state’s classification for staffing and temp companies). In addition to obtaining the standard business license required for all companies, private employment agencies must go through a separate application process that includes securing a bond.
Improper licensure wasn’t the only issue that arose.
“There were no employment agreements,” says Chambers. “The difficulty for us was figuring out what hours did they really work, what were they promised.”
Bartenders were largely recruited through word-of-mouth and social media. Agreements were verbal. The range of what bartenders told the labor commissioner they were owed ranged from $250 to $2,500. All noted they’d agreed to a flat day rate. Many claimed they worked long days, upwards of 15 hours during the festival, which is common for these type of event gigs. They were required to attend several hours of unpaid training.
When all was said and done, Roar paid 19 people a total of $18,500 and was assessed a $10,000 penalty for acting as an unlicensed private employment agency. Backyard Village BBQ paid 19 people a total of $19,000 and was assessed a $10,000 penalty for labor violations.
That equals an average payout of $1,000.
According to the decision letter detailing their findings, Roar’s administrative penalty could have been as high as $55,000, but Chambers says the office’s first priority was getting payouts to the workers.
“One of the things we learned is that there’s a whole world out there, with social media and different things, where people are recruited to do things outside of the traditional employment relationship,” says Chambers. “Show up on Saturday. You’ll get paid cash.”
Chambers characterizes the experience of the Route 91 bartenders as an anomaly, but owners of traditional event staffing companies say it isn’t. They claim their businesses are threatened by unfair competition from people who cut administrative and overhead costs by hiring workers as independent contractors or completely under the table.
Backyard BBQ and Roar were both regulars of the special event scene in Southern Nevada. Roar’s now-defunct website claimed to have staffed and managed hundreds of employees at Electric Daisy Carnival, the iHeartMusic Daytime Festival and ACM Party for a Cause. Social media posts from Backyard BBQ suggest they provided food at San Gennaro Feast in North Las Vegas as well as fairs in Riverside and Orange counties.
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“When you hire independent contractors, you can undercut traditional companies,” says All Team Staffing Vice President Jerry Souris, who owns four branches, including one in Las Vegas. “I lose money everyday because of that.”
All Team Staffing, which is registered as a personal employment agency with the state, has zero independent contractors and hires everyone as employees. The business pays a price — liability insurance, workman’s compensation, unemployment tax, and payroll taxes must be paid. Having employees also means the business is required by Occupational Safety and Health Administration (OSHA) to provide safety guidelines and report their injuries and incidents.
Souris sees all of that as the cost of doing business properly, adding: “You should want to protect your employees if there’s an emergency.”
The Internal Revenue Service (IRS) considers multiple factors when determining whether a worker should be designated an employee or independent contractor. Most relevant to bartenders and event staff are those dealing with “behavioral control.” Being told when and where to work, as well as how to complete your work, may indicate a worker should be classified as an employee. Independent contractors typically have more freedom.
“The law is very clear on what a W-2 employee is,” says Jon Simon, owner of Simon Event Group, another properly registered private employment agency. “If we require them to show up at specific times, wear specific things, do their job the way we want? That’s a W-2 employee.”
Simon says when he began the staffing side of his business, many potential workers were thrown off by their classification. Bartenders and promotional models especially were used to being paid in cash or as independent contractors. To counter that expectation, he says they have to explain the protections offered by traditional employment. He also makes it a point to pay people as quickly as possible — within three to five days, typically.
Every day, he says, he faces competitors who aren’t following the rules. He feels it happens because nobody along the chain of entities involved with special events feels much of an incentive to enforce the law. Pointing out that they should be an employee and not an independent contractor puts the individual worker at risk of being blacklisted for future work. It cuts into the profits of unsavory staffing companies as well as the businesses that hire them for their events. The venues where events take place know the rules but as long as their minimum insurance requirements are met they don’t want to rock the boat with their clients. Municipal bodies aren’t directly liable but are excited about the economic development these events are said to bring to town.
“They all know but the turn a blind eye,” adds Simon.
At the same time, he is reassured by what he feels is a shift coming from the companies who host events and contract with staffing companies. He says “more and more” companies are asking about the classification of workers and requiring them to be employees instead of independent contractors. When pitching his company, he advertises the fact.
“Some are starting to ask, especially in the major cities,” he adds.
Such a shift likely comes out of concern for legal and liability purposes rather than purely moral or ethical concerns, but the end result is better protections for workers in the face of unthinkable tragedies such as what happened at Route 91.
Souris says a 53-year-old employee of All Team Staffing visited him at the office at the end of last year. She’d worked the Route 91 festival and injured her hand. She’d gone through eight surgeries and was still recovering.
“When I saw this woman, my heart broke,” he added. “You have to think. Not just talk dollars and sense. Let’s talk humanity.”
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Some like to argue that most workers would prefer to work under-the-table or as independent contractors for personal financial reasons. The topic has received increased scrutiny thanks to the so-called “gig economy” and companies like Uber and Lyft.
Even if it’s true that most workers would prefer it — and research on the topic is inconclusive at best — a worker being okay with terms outside of the confines of labor laws doesn’t suddenly make it legitimate. Not in the eyes of the IRS or the Nevada Office of the Labor Commissioner.
Labor Commissioner Chambers acknowledges there was pushback during the investigation — not just from people of prominence within Roar and Backyard Village BBQ, but also from rank-and-file workers beneath them.
“It was interesting,” she says. “When we first got claims, when we started asking questions, we heard from people: Why are you doing this? Why are you doing this to Roar?”
The exact number of people who worked for Roar and Backyard Village BBQ isn’t known, thanks to the nonexistent recordkeeping on the part of managers. What is known is that only 32 bartenders filed complaints.
Some bartenders felt shorted but didn’t want to expend energy fighting it.
“At this point, I don’t care,” said one bartender interviewed in January when the labor commission was actively investigating Roar and Backyard Village BBQ. “If I don’t ever get money, I walked out there alive and unharmed. … I’m just grateful.”
She opted not to file a complaint with the labor commission.
Others may have been compelled not to raise issues with the labor commission out of a desire to stay in the good graces of their previous managers, several of whom reemerged with another company after Roar ceased operations last year.
Bryan Caudill, who managed the Route 91 bar staff for Roar, co-founded a new event staffing company called Horizon Event Solutions on Nov. 16, approximately six weeks after the shooting. It is registered as a private employment agency. Social media posts advertising job opportunities suggest the company staffed “model bartenders and barbacks” for the iHeartRadio Daytime Festival, which took place last month at the Las Vegas Festival Grounds, an outdoor venue located off Sahara Avenue. Roar hired staff for the 2017 iHeartRadio Daytime Festival, according to social media posts.
The Current was unable to reach Caudill or Horizon Events Solutions for comment.
Bartenders who did file complaints with the labor commissioner said they did so either because they simply needed the money, or because they were angry over a belief that folks at Roar or Backyard Village BBQ may still have pulled a profit while they suffered and dealt with post-traumatic stress disorder. Online, in a secret Facebook group one of the bartenders created for the bar staff to share information and resources, comment wars raged about whether the managers — especially Caudill — were exploiting the situation or trying their best in the most difficult of situations.
One of the bartenders who fell in the former camp told the Current that Caudill and others were dismissive of concerns over lost wages: “We were told we were begging for money we don’t deserve.”
The bartender reiterated that many people are reluctant to vocalize their issues with working conditions, specific companies or managers out of fear of being labeled difficult to work with or being blacklisted for future gigs. Though the bartender filed a wage complaint with the state, he requested the Current not print his name because he continues to work special events to supplement his full-time job in the nightlife industry. The other unnamed bartenders interviewed for this story made similar requests.
“This is a big small town,” he added. “One company, I spoke up and they never called me back. I guess the guy took offense. That’s the difficult thing. They police themselves. They do whatever they want. It’s not fair to the people who work.”