October 29, 2025
Juggling Jobs: Joint Employment and Overtime
The U.S. Department of Labor (“DOL”) recently issued an opinion letter clarifying when hours worked at two or more jobs at related businesses must be combined for overtime purposes under the federal Fair Labor Standards Act (“FLSA”).
As a reminder, most employees must be paid overtime if they work more than 40 hours within a 7-day period. If an employee works at two or more jobs at related businesses and the combined work time exceeds 40 hours per week, is overtime pay due? If so, who must pay the overtime? The DOL recently answered those questions, as explained below.
Background
The inquiry involved an employee who worked approximately 40 hours per week as a hostess at a hotel restaurant and was offered additional shifts at an affiliated members-only club located on the second floor of the same hotel. Although the restaurant and club operated under separate corporate entities and maintained separate payrolls, they shared a kitchen, offered similar menus, had overlapping ownership and management, and frequently exchanged staff between locations.
The employee was informed that overtime would not be paid because the two entities were considered separate companies.
DOL Analysis
Under the FLSA, when two or more employers are sufficiently associated with respect to an employee’s work, they may be deemed “joint employers”, a concept known as horizontal joint employment.
The DOL identified several indicators of joint employment in this case, including:
- Shared facilities and operations;
- Common ownership and management;
- Coordinated scheduling and employee assignments;
- Identical pay rates; and
- Employees performing work for both entities during the same shifts.
When such integration exists, the DOL requires that all hours worked for both employers be aggregated for purposes of determining overtime eligibility. Both employers are jointly and severally responsible for compliance with the FLSA’s minimum wage and overtime requirements.
Conclusion
The DOL concluded that the restaurant and the members-only club are joint employers under the FLSA. As a result, the employee’s total hours across both establishments must be combined each workweek, and any hours exceeding 40 must be compensated at the overtime premium rate.
Corporate formalities, such as separate business registrations or payroll systems, do not shield employers from liability where operations are functionally integrated.
Key Takeaway for Employers
Businesses operating multiple, closely related entities, such as restaurants, clubs, or hospitality venues sharing management, space, or staff, should carefully evaluate whether their operations may create a joint employment relationship under the FLSA. Where integration exists, employers must ensure that employee hours are tracked and aggregated across entities to maintain wage and hour compliance. Employers must also pay attention to state wage and hour laws, which may or may not follow the federal FLSA.
If you have questions about the FLSA or other wage and hour laws, please contact Chaim Book at cbook@booklawllp.com, Sheryl Galler at sgaller@booklawllp.com, Rebecca Nathanson at rnathanson@booklawllp.com or Andrew Heighington at aheighington@booklawllp.com.
