After the recent publication of an article in the Grapevine about the new hospitality industry licensing laws concerning stripping and prostitution in Iceland, two former dancers of Club Óðal, a strip club in downtown Reykjavík, contacted the paper alleging that the club was infringing the laws on tax, labour rights, and prostitution – allegations which the owner of the club vehemently denies. This article attempts to shed some light on those allegations.
To put this information into context, a summary of the new laws is useful. The laws prohibit strip dancing, the fraternisation of clients by dancers, and private strip dancing. However, according to Sigurður Freyr Sigurðsson, a lawyer at Reykjavík Police, clubs can continue to offer strip dancing but not private dancing, if they are granted permission by the police and health and safety authorities. Prostitution is now legal on the condition that a third person does not profit from the act, and therefore continues to be illegal in strip clubs.
Among the allegations was the claim that the club was not paying the dancers the amount they had been guaranteed when they were hired. Despite being told that they would get paid 40% of the cost of a five-minute private dance, the price of which is 5,000 ISK, the women who approached the Grapevine claimed that at Club Óðal they were only receiving a total of 280 ISK (after taxes and pension fund contributions were deducted) from that amount, while at other clubs they pocket 50% of the cost of a private dance and are not taxed at such a high rate.
“If you make 300,000 [ISK] a month, you probably come out with 100,000 [ISK]. It shouldn’t be like that. And [the club] is supposed to be the best club [in Iceland] but that is the only club that does it,” the women say.
According to them, “about half” of the dancers at the club have quit in recent weeks citing complaints of pay, the conditions in the club and also slow business.
To put these claims into perspective, the Grapevine contacted another club in the Reykjavík area and asked what they pay their employees for private dancing. Ásgeir Þór Davíðsson, owner of Goldfinger, a strip club in the town of Kópavogur, and Bóhem (Iceland’s first erotic club) in Reykjavík, confirmed that the dancers that work at his clubs are paid “more or less” 50% of the cost of a private dance.
Grétar Ingi Berndsen, the owner of Club Óðal, denies the womens’ claims of wrongdoing. “All the girls work in the club by the conditions in the contract – if it says 60–40, then that’s what they get. They do get 60–40. These are just allegations. We’ve had hundreds of girls here – some come back every year,” he says.
When Berndsen was pressed to speculate on any circumstances where a dancer might only receive 280 ISK from a 5,000 ISK dance, he replied that while he may not be at the club 100% of the time, he does keep a close eye on how it’s managed.
“The contracts [and salaries] are by law and done by a computer like at all other companies – it’s not done by hand or by individuals,” he says. “It’s not in our interest [to not pay the girls correctly].”
Berndsen was asked if he saw any reason why two ex-employees would make such strong allegations. “The girls are quite good at calculating their own salaries – they know more or less what they make each month,” he replied. “[But] it’s a misunderstanding. Everything is a see-through system here.”
When the Grapevine asked for the specific break-up of the pay, Berndsen explained that from a 5,000 ISK dance, a 1,000 ISK service fee is first deducted. From the remaining 4,000 ISK, the women earn around 1,500 ISK, or 30%. Not quite 40%, but close.
According to the club’s accountant, who requested to remain anonymous, the women earn from 30% to 100% of the remaining 4,000 ISK. The accountant explained that the amount that individual dancers make heavily depends on how many drinks they sell. Yet, the dancers who contacted the Grapevine maintain that they receive a maximum of 280 ISK (after taxes and other deductions) per five-minute dance regardless of how many drinks they sell.
Despite being self-employed and, as such, responsible for paying their taxes, the women also claimed that the club was deducting their taxes and pension fund contributions from their salary on their behalf.
“They [the club] say that they’ll pay the taxes for me, but they never ask me or the other girls, if that is OK, since we are self-employed,” one of the girls said and continued: “At the tax office, I’m not even registered. They put in my kennitala [social security number] and it doesn’t show up. And at the union they say “well, you’ve been working here but you don’t pay tax.” Well, they pay [our] tax all the time, but it’s not there [in the system].”
Óðal’s accountant says that the tax laws in Iceland dictate that companies are required to pay the taxes of short term foreign workers, including those that are self-employed, in order to ensure that their taxes are collected before they leave the country. However, Guðrún Ásta Sigurðardóttir, Director of Internal Revenue in the International Division at the tax office in Reykjavík confirmed that self-employees are responsible for their own taxes. “Self-employed persons are never employees, so a company cannot represent them or act on their behalf,” she says. Sigurðardóttir also confirmed that companies are not legally allowed to seek the permission of self-employees to act on their behalf.
The dancers claim that the club is taxing them more than they are required to pay. “They say that ‘we’re doing you a favour by paying your taxes for you’ [but] they’re stealing from the girls,” they say. “You have to understand that we decided to do this [contact the Grapevine] because we don’t like when people steal our money. Its one of the clubs that is making a lot of money – there is no doubt about that. They always have their money, but the girls don’t. You make a lot, but after they take out so many things [taxes, pension fund contributions], you end up with nothing […] and it just never adds up.”
According to the two women, the other dancers at Club Óðal have similar grievances about the conditions in the club, but hesitate to complain in fear of losing their jobs and work visas.
When the Grapevine contacted Berndsen and asked him to respond to the allegations, he invited us to check out the premises and presented documents that showed that the taxes were indeed taken out of the womens’ salaries by the club. When asked for an explanation as to why the club was paying the womens’ (who are apparently self-employed, and therefore responsible for their own taxes) taxes on their behalf, Berndsen said: “Some of the girls are self-employed while others are not. It depends on which country they are coming from – there are different rules in different countries.” However, to make matters even more contradictory, Óðal’s accountant stated that all the women working at the club were in fact self-employed.
While both the owner and the accountant of the club were happy to discuss these matters with the Grapevine, the women claim that they do not receive the same treatment by staff at the club when they request information about their salary. “If you have any questions, everywhere else there is no problem. They sit down with you and they explain [everything] to you. At Óðal, they can’t even tell you the name of the pension fund the money is going to.”
Berndsen denies these claims, adding that the girls are provided with detailed information about their pay. “It’s being done by the book – there is extreme surveillance from the tax office,” he stressed. “Why don’t these girls go to the police or their union if they have a problem?”
Prostitution in the Club?
Club Óðal’s website states that the dancers “dance top-less on stage, provide fully nude dances and accompany the customers during their stay at the club”. But, according to the women who approached the Grapevine, some of the dancers are taking this one step further.
“There are some girls in there that are selling themselves, doing more than they should be doing. I’ve heard some of them offer themselves. You see what is going on,” they say. “Girls do get away with it […] and, when you complain they say ‘oh, yeah, we’ll speak with her’ but, if this was in [another country] you’d be out of the club – no exception.”
The women explain that by turning a blind eye when dancers provide extra “services”, customers start to expect more from all the women working at the club.
“Basically, every night you’re working you have to explain to them [the clients] ‘listen if you look in the dictionary there is a big difference between prostitution and dancing’ […] and then they walk out of a private dance because they realise ‘oh, she’s not going give it to me,’” they say.
Berndsen gave the Grapevine a tour of the club’s premises. Considering the openness of both the dancing and seating areas in the club and the door to the VIP room supposedly being left open – it seems unlikely that any such activity taking place at the club itself would go unnoticed and he strongly denies claims that prostitution is taking place in his club. “Of course this is just nonsense. They are obviously frustrated that they’re not making enough money. There are very strict rules, and the police are here every night,” he says. Berndsen adds that his club is licensed and that he is on good terms with the police. In the week leading up to the publication of this article, the decision was made by police not to grant Iceland’s most successful strip club, Goldfinger, permission to continue offering strip dancing until “certain issues in the club are resolved.” The closure of Strawberries, a “champagne club” in downtown Reykjavík, by police for operating outside of its license, as well as the review of Club Óðal’s license by Reykjavík City Council, was also widely reported in the local media.
While the Grapevine went to great lengths to confirm some of the claims mentioned in this story, because of the nature of the material and the commitment made to keep the identity of the original sources anonymous, it was not possible to confirm many of the “facts” and figures quoted by both the club and the dancers. In addition, the Ministry of Justice declined to answer some of the specific questions posed by the Grapevine, citing the reason of not wanting to “prejudge the outcome of any possible court cases bearing resemblance to the situations described”.