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Overtime and employees who work for two separate companies owned by the same individual.

KMSKMS 6 Posts
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We have several full time salaried employees at our travel agency. The owner of the travel agency is going to form a new company to provide a different (non-travel related) service to clients. We will need hourly employees to work for this new business. Some of our full time salaried employees from the travel agency would like to work for the new company as well (in addition to their full time employment with the travel agency). My question is can we hire the full time employees of the travel agency for the new company and not run afoul of the overtime laws? The employees would be working more than 40 hours for the two companies combined, but not more than 40 hours for any one company.

The new company would pay the employees an hourly rate, but the companies would be owned by the same person and/or corporate entity. Any problem?


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  • 3 Comments sorted by Votes Date Added
  • Theresa Gegen TXTheresa Gegen TX 814 Posts
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    You can run afoul of the overtime laws doing this. Worst case -- you may inadvertantly destroy the exempt status of the employees and owe them overtime at a high rate. Because organization of the new company may effect the result, I suggest that you contact an employment lawyer to get specific advise.

    Good Luck.


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  • DavidDavid 7 Posts
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    Isn't there an FLSA exemption from paying overtime hours (in this scenario) when the duties of the two positions are within the same employ but are "substantially different" (i.e. Travel Agent work full time vs. Accountant work part time, or HR Specialist full time vs. Toll Collector part time)? Am I mixing issues of exempt/nonexempt and overtime/straight time?



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  • Theresa Gegen TXTheresa Gegen TX 814 Posts
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    The FLSA will allow an employer to pay different wage rates for different types of employment. For example, an employee who drives his equipment to a work site (which takes one hour) then uses equipment at the site for 6 hours, then drive equipment back to office. The time transporting the equipment can be paid at a lessor rate than the time operating the equipment.

    However, the lessor rate must be atleast minimum wage, and when the employer determines overtime, the overtime rate will be based on a combination of the two rates.

    There may be some other exceptions for two jobs for one employer, but the overtime laws are very protective of workers, so I doubt that an exeception exists that allows an employer to get around overtime by having the employee work two seperate jobs. However, the rules are a bit complicated, and I usually learn something new everytime I look at them.

    I suggest that anyone who is interested search on the Department of Labor Website. [url]www.dol.gov[/url] It is a great resource.


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