Businesses leery of paying workers overtime should be on the lookout for workers who may be double dipping in company waters.
Ask you know, it’s not uncommon for a worker to hold two or more jobs today. But unexpected problems can arise when an employee works for companies that are related (even loosely) to each other.
In a recent post over at the Labor & Employment Law Perspectives blog, labor and employment law attorney Gregory McClune advises employers to be aware of the Fair Labor Standards Act Joint Employer Doctrine.
The doctrine says the hours of an employee who works at multiple, related employers may be combined, which could trigger unexpected overtime requirements.
So if your company is affiliated with another employer or does business under another name, you’ll want to check to see if you’re sharing any workers with that employer.
But as McClune points out, there’s no exact formula for determining when an employee’s hours at two business entities must be combined. Instead, courts and government agencies will examine the facts of each case to determine if a joint employment relationship exists.
McClune also points out some of the most common signs a joint relationship does exist:
- There’s an arrangement to share the employee.
- The employee performs work that simultaneously benefits both businesses at the same time.
- The businesses share management practices when it comes to the hiring, termination, scheduling, maintenance of records and payment of employees.
- Common management or ownership exists.
- Both businesses share a location.
- HR policies are shared.
- The two entities share a common hire date for the employed.
Source: “Serving Two Masters Can Trigger Overtime Claims,” by Gregory W. McClune, Employment & Labor Law Perspectives, 7/18/11.
