If a nonexempt employee works for two or more separate businesses with the same owner, must the employee's hours be combined for overtime purposes?
When an employee performs services for different companies with common ownership, there may be overtime obligations if the companies are considered joint employers under the Fair Labor Standards Act (FLSA).
Under the joint employment principle of the FLSA, more than one employer may employ an individual in the same workweek, and, if the employers are not completely disassociated, those employers may be jointly responsible for compliance with the FLSA as it relates to overtime pay.
A 2020 final rule that narrowed the definition of a joint employer under the FLSA was rescinded in 2021. There is currently no regulation to replace the 2020 rule or provide employers with explicit guidance in determining joint employer status. Employers should consult with legal counsel for guidance specific to their circumstances.
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