An exempt employee would like to work a second, part-time nonexempt job at our company. How do I avoid overtime issues?

Although employees may perform more than one job for an employer, an employee may only have one Fair Labor Standards Act (FLSA) des​​ignation—either exempt or nonexempt. If an employee wishes to work two different jobs for an employer, the exemption status must be based on the combination of the two jobs’ duties as if the employee were performing one job. The “primary duty,” as described under 29 C.F.R. §541.700, must be that of exempt work for a position to be considered exempt. When looking at all the duties of the combined positions, if the “job” still meets the exemption criteria under the FLSA, then the employee may retain his or her exempt status; if not, the employee would lose the exemption status for both jobs and would have to be reclassified as nonexempt for both jobs. 

If the combined duties would still qualify the employee to remain in an exempt status, the FLSA would not require the employer to pay the employee any additional salary above the normal weekly salary, nor would it prohibit an employer from paying more for the additional work, in any increment or method chosen (e.g., hourly, day rate, piece rate). The only requirement would be to pay the employee his or her current, regular salary, which meets the salary basis test under the FLSA. Clearly, not many employees would voluntarily take on a second job without additional compensation, so it is customary that employers that allow such an arrangement would pay an additional hourly rate for the hours worked at the second job, but they would not be required to pay any overtime.

If the combined duties of the two jobs would no longer allow the employee to remain in an exempt status, the employee would become nonexempt for both jobs, and overtime would need to be paid on all hours worked over 40 in a week. (Some state laws may have daily overtime requirements.) The basic rate on which to compute the overtime would be either the weighted average of the two wages or the rate of the job in which the overtime was earned. (Some states may have more stringent laws for calculating basic rates for two or more jobs.) This approach could become quite expensive for an employer and would certainly pose an additional administrative burden. 

Employers are not required to allow employees to work more than one job for them; employers may choose to allow or prohibit this arrangement and may set their own criteria for doing so, as long as they do not discriminate against a protected class. Either way, a well-written policy would be advisable to clearly communicate the employer’s policy on the issue and to ward off any unintended discrimination.