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Overtime in Joint Ventures
Benefits & Compensation
Overtime in Joint Ventures
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I am looking for some direction on how overtime is handled in joint ventures
and co/joint-employer relationships.
Does the percentage of ownership make a difference? For instance - if a company ow
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Forums » Topic Forums » Benefits & Compensation » Overtime in Joint Ventures
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Overtime in Joint Ventures
posted at 9/19/2010 6:59 AM EDT
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Posts: 6
First: 9/19/2010 Last: 12/7/2010 |
I am looking for some direction on how overtime is handled in joint ventures
and co/joint-employer relationships. Does the percentage of ownership make a difference? For instance - if a company owns 25% of joint venture vs 55% of the joint venture would it impact co-employer status? |
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Overtime in Joint Ventures
posted at 9/19/2010 2:42 PM EDT
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Posts: 6
First: 9/19/2010 Last: 12/7/2010 |
Let me clarify. If a company is part of a joint venture, and an employee works for both the primary company and the joint venture - does this automatically equate to being a co-employer or would the percentage of ownership be a factor? The relationship of co-employer could influence the obligation to pay overtime for total hours worked between both employers. |
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Overtime in Joint Ventures
posted at 9/19/2010 3:36 PM EDT
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Posts: 2442
First: 2/12/2000 Last: 9/14/2011 |
you will need to clarify what you mean by works for. An employee should only be employed by one of the entities at a time. Otherwise a lot things become very confusing like what health plan is he part of? what retirement plans? who pays the workers compen unemployment etc.
One you determine who he is working for when performing the work that should answer all your questions. Questions about who pays the costs is more a part of the JV agreement, but one employer at a time is the rule. |
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Overtime in Joint Ventures
posted at 9/20/2010 4:25 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
It is my understanding that if there is joint ownership of companies (and I do not remember percentages) and the employee works for both employers, then hours must be aggregated such that OT is paid for any hours over 40. This has happened with our group of companies in the past.
Here's a link from OSHA: http://www.osha.gov/pls/epub/wageindex.download?p_file=F8764/wh1057.pdf on this FLSA issue...search on "overtime" and it states that "On the other hand, if the facts establish that the employee is employed jointly by two or more employers,i.e., that employment by one employer is not completely disassociated from employment by the other employer(s), all of the employeeâs work for all of the joint employers during the workweek is considered as one employment for purposes of the Act. In this event, all joint employers are responsible,both individually and jointly, for compliance with all of the applicable provisions of the act, including the overtime provisions, with respect to the entire employment for the particular workweek. 5 In discharging the joint obligation each employer may, of course, take credit toward minimum wage and overtime requirements for all payments made to the employee by the other joint employer or employers. (b) Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as: (1) Where there is an arrangement between the employers to share the employeeâs services, as, for example, to interchange employees; 6 or (2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; 7 or (3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. 8" A good example is that we own two fitness gyms that are separate entities/EINs, etc. But are commonly owned. If I have one employee who works at both, then we are subject to OT aggregated as stated above. This is to keep companies from getting around FLSA by employing people through separate companies and spreading their hours over them. |
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Overtime in Joint Ventures
posted at 9/20/2010 4:45 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
You may well find your answer here
Factors that are examined to determine the existence of a joint employment relationship include the following: Whether there is an arrangement between the employers to share the employee's services, such as by interchanging employees; Whether one employer is acting directly or indirectly in the interest of the other employer in relation to the employee; Whether the employers share control of the employee; Whether there is common ownership of the employers; and Whether there is common management of the employers. No single factor is controlling, and the DOL and the courts generally look at the âeconomic realitiesâ of the work relationship rather than follow technical legal rules to determine whether a joint employment relationship exists. As a general rule, where each employer is in an entirely separate and distinct business and acts independently of the other with respect to employment of the particular individual, a joint employment relationship is not likely to be found. For example, in Walling v. Friend (Eighth Circuit, 1946), the court held that a joint employment relationship had not been created where an employee worked for two partnerships in two different capacities, even though the two partnerships shared a common owner. The court noted that the employee worked more than 40 hours per week in the aggregate for both partnerships, but not more than 40 hours per week for either partnership. I am going to assume that the question you have in the legal forum is realted to this q |
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Overtime in Joint Ventures
posted at 9/20/2010 4:48 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
gol darnit.
Anyway. I am going to assume the question you have in the legal forum is related to this. It would appear, to me, that some common control(ownership) would still exist. As such you could be liable for OT based upon state, local or federal law. My advice to you would be to seek competent legal advice and not make a decision in this instance based upon the free advice you get from all of us here. In that the DOL estimates more than 70% of employers are NOT compliant with the FLSA, and they are looking hard to target and fine them, you need to ensure that your company is protected. |
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Overtime in Joint Ventures
posted at 9/20/2010 5:06 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Totally agree with HRPro to have outside counsel who can look at the employer relationships and give solid legal advice either way. It is very dependent on very specific facts known only to you and your company.
Being from a group of companies, we have to deal with this issue not only for FLSA but for FMLA, 401k plans, etc. It is well worth the money spent to have someone outside give you a legal opinion that takes into account your facts and circumstances. |
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Overtime in Joint Ventures
posted at 10/6/2010 8:56 AM EDT
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Posts: 3
First: 12/16/2009 Last: 10/6/2010 |
to clarify OT rules, just contact your local dept of labor, they will give you the right answer. In the short if common ownership, then hours are common and OT must be paid. there was a recent case in Mass, where the company had employees work 8 hours, then punch out and then repunch in for another company. Dept of labor frowned about this and it cost the company a lot of money and fines. |
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