I talked to the co-owner of Club Habanos. She said the only way around the California smoking ordinances is to take on each employee as a shareholder or co-owner and pay them by profit percentages...no tips.
They are taking it under consideration but the employees would have to provide their own health care and pay into social security and disability as if they were business owners by themselves. That way they avoid having to fall under Cal-OSHA regulations by not being "employees". And they would be exempt from work-place smoking regulations. What sucks is that everyone who works there either smokes (something) or accepts the fact that they are working in a smoking environment.
I would think it would be a whole lot easier if they just had a contract indicating they know of the evils of smoking and the "hazards" of working in a smoking environment and they are willing to take the risk, holding neither the company, state or tobacco industry liable if they cough up a lung one day.
It is extremely hard to do. Sorry to see a great place go the way of the smoke nazis. There is another way out of the smoke regulations for a cigar bar. Have an open air place where the drinks and smoking are allowed as well as an indoor safe haven from the smokers. There are still a few places like that left, but it makes it hard on stormy days. But those are few and far between...here.