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How separate must employers be for OT purposes?

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in Office Management,Payroll Management

Question: A nonexempt employee works for a company and its subsidiary. Each company has separate federal Employer Identification Numbers (EINs), workers’ compensation policies and state unemployment accounts. The two companies, however, share an HR department and some corporate officers. The employee completes two time sheets and has different managers. Is she entitled to overtime if she works longer than 40 hours between the two companies?

Answer: Yes, if the two companies are joint employers; no, if they’re not. Joint employer status doesn’t depend on such factors as separate EINs. You will be considered a joint employer with another employer if there’s an agreement to share employees, if one employer acts directly or indirectly in another employer’s interest in relation to an employee, or if one employer is controlled by, controls or is under the common control of, another company (the common corporate officers would seem to fit here). Further, to determine whether you’re a joint employer, you must look at the totality of the employee’s employment.

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