DOL Issues Guidance On Joint Employment

October 7, 2025

What's New

A new opinion letter from the Department of Labor’s Wage and Hour Division illustrates one way in which related organizations can become joint employers under the Fair Labor Standards Act. In this case, an employee worked for a restaurant and a members’ club both located inside a hotel. DOL found the following facts suggested joint employment:

Facilities appearing operationally integrated, including physical proximity, common spaces, and common services;
Shared ownership;
Management teams that periodically supervised work for the other entity;
Workers clocked in to one employer were occasionally directed to work at the other;
Identical rates of pay; and
Shifts not interfering, suggesting scheduling coordination.

What It Means

Employers with shared ownership, management, facilities, or coordinated schedules may be joint employers. In such cases, both businesses are fully liable for FLSA compliance, including overtime pay, and all hours worked at each entity must be combined when calculating overtime.

What You Should Do

Employers with related entities should review their staffing, scheduling, and payroll practices to ensure compliance with joint employment rules. If employees work for more than one entity in a workweek, combine all hours for overtime calculations and pay overtime as required. Employers should educate managers and payroll staff on these requirements and consult legal counsel if they are unsure about joint employment status.

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DOL Issues Guidance On Joint Employment

Oct 7, 2025 – A new DOL opinion letter finds that a restaurant and a members’ club located inside the same hotel – and which had common spaces and services, ownership, workers, pay rates, and coordinated work shifts – were joint employers under the FLSA.

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