Expert: Steve Katz - 12/19/2011

Question
QUESTION: I work at a dance studio where the people on staff have to take required classes in order to stay on staff. The problem with these classes is that when we look at our ledger, we're being charged over 100 dollars more than what the price list for the classes actually says. The owner of the studio keeps telling certain people on staff that he/she is going to take them to collections. Is there any legal action they (the people on staff) can take against the owner?

ANSWER: It certainly sounds like there are some very unethical things going on here if the owner of the school requires certain classes be taken then charges his staff more than the "rack rate" that is charged to the customers. But.... unethical is not necessarily illegal.

To see if there are any Labor Law violations I would talk with your State Labor Department. This sounds a lot like the old "company store" abuses that existed about 100 years ago - employees at a certain company were required to live in housing owned by the company and were required to shop at co0mpany owned stores, and the expenses incurred consistently took 100% of their pay.

Other than that, I see two options - get the equivalent training somewhere else on your own and give the boss a completion certificate or quit.

---------- FOLLOW-UP ----------

QUESTION: We don't get paid, we get credit on our bills. I didn't fill out an application, was never interviewed, and have never filled out any tax information when it comes to the studio. Is this an illegal business?

Answer
So you are not employees, you are customers who think you are employees. Not a bad racket - the employer gets the employees to pay HIM to work.

It sounds contradictory from the bottom to the top. Either you are customers or you are employees. If you are employees then you get paid. If you are customers you pay him. The first thing you need to do is figure out which you are because that will determine all future steps you take.

If you are employees then what he is doing is absolutely illegal.

If you are customers then simply stop using his "services". If there are a lot of you then do it all together. Just walk out and stop paying him. Go somewhere else to dance. Deprive him of the income.