OT or not OT

Leslie

I work on an Indan reservation. The tribe I work for owns several entities. I work for one operation which employs its own security force. Another operation asked to have their facilities patrolled during closed hours. Full time security officers who wanted to make extra money - essentially a second job - are volunteering to patrol the area. In order to facilitate their pay, we are writing them an accounts payable check on a 1099 non-taxed basis, then charging the money to the other operation through the tribe. Are we in violation of FLSA?

Jane Reddin AZ

I think there is a good chance that there could be an FLSA violation here. This would depend in large part on the separateness or connectedness of the two
"separate" operations. Assuming these are hourly employees, it sounds like you are trying to treat them as independent contractors when they work for one "operation" while conceding that they are employees when they do the same job for another "operation." If these operations are 100% related and really the same "employer" under the law (a complex analysis, but, in a nutshell, are they really run separately or do they have overlapping management?) the security guards hours at both operations probably should be considered in determining their regular rate and overtime. If they truly are unrelated entities, you have a somewhat stronger argument, although there is legal authority against treating security guards as independent contractors under the FLSA under any circumstances, so they would at least be entitled to two separate hourly rates and at least the potential for overtime pay in each position, separately calculated by each employer. In any event, the "leasing" arrangement would probably be viewed as an end run around the wage-hour laws.
Sorry to be the bearer of bad news - but good luck in untangling it.

Jane Reddin
Lewis and Roca Lawyers LLP
Phoenix - Tucson - Las Vegas

tfevergrn

Hi Jane,

Let's say you have an employee in an "exempt" position who has offered to take on an additional part-time position within the company which is a "non-exempt" position. Would the only overtime issues be with the "non-exempt" position? Meaning, as long as they didn't work in the "non-exempt" position for more than 40 hours a week, there would be no overtime liability.

We are in Nevada. Thank you in advance for your help!

Tina Marie

Theresa Gegen TX

[font size="1" color="#FF0000"]LAST EDITED ON 02-11-02 AT 10:46AM (CST)[/font][p]I believe that the overtime laws will look at the job duties of the employee for that particular employer. Therefore having an exempt employee work in a non-exempt position for X number of hours per week could destroy the exemption of that employee. Then the employer would be liable for overtime based on hours worked over 40 and at a higher rate of pay (the average hourly rate, which would include the exempt rate).

It is almost never a good idea to let exempt employees have a 2nd job at the company that is non-exempt. Even if the employee agrees to such an arrangement, that will not override the law.

If the employee is non-exempt in both jobs, the employee can be paid a different wage rate for different work, and paid time and a half for hours over 40.

One issue that I cannot address is whether the fact that you work for an Indian Tribe would effect the result. Oftentimes tribes are exempt from certain laws because the tribe is its own "nation." You would need to talk to a specialist in Indian laws to address that issue.

Good Luck!