Colorado strip clubs under investigation for abusing loophole to avoid paying dancers fairly

On Tuesday, the Denver Auditor's Office issued subpoenas for 3 of the city's biggest strip clubs to provide investigators with full payroll records as an investigation into wage theft at Denver strip clubs develops.

PT's Showclub, Diamond Cabaret and PT's Centerfold are accused of misclassifying dancers incorrectly, as non-employees or independent contractors, in order to avoid paying them their rightful wages and overtime pay.

The 3 clubs have up until Sept. 24 (a week after the subpoenas were initially issued) to respond and provide the requested information. If they do not respond, they will be fined up to $1,000 a day.

In April, the Denver City Council delivered a unanimous decision to grant subpoena power to Denver Labor. Many advocates believe that these expanded powers will be an incredible help in wage-theft investigations, including Denver Auditor Timothy M O'Brien.

"It's a win for Denver's workers that we had this process in place in time," O'Brien said in a news release on Tuesday. "This is the first time we are using this subpoena power and without it we would be unable to conduct our investigation into whether dancers' rights are being violated."

A news release from the auditor's office on Tuesday stated that the clubs were initially asked for employee contracts, contact information and payment records. The subpoena was issued after they failed to provide these records to investigators.

No conclusions have been reached yet, the auditor's office said.