Employers who operate multiple companies don’t always realize that their employees who work for both must have their hours at each company combined for overtime calculations.
When employees work for two different companies owned by one employer (called joint employment), they are still entitled to overtime when their clocked hours at both companies exceed 40 in a week (or 8 in a day in some states).
“Joint employment exists when a person is employed by two or more employers such that the employers are responsible, both individually and jointly, for compliance with a statute.” – DOL
Situations When the Employee Should Have Been Paid Overtime
- The employer operates two businesses and hires one accountant to do his bookkeeping for both company A and company B. The employer wants to keep his payroll records separated for both companies so he has his accountant clock in using two different time clocks. Occasionally, her total hours exceed 40 but she doesn’t get paid overtime since each time clock system records fewer than 40 hours.
- An employee works two different types of jobs within the same company. The employer wants to track how much time the employee spends on each job, so the employer has him use two different time clocks. The payroll processor might either pay the employee twice each pay period or calculate the payment for each job and combine the two. Either way, overtime hours are getting lost in the split.
- An employee finds work through two different staffing agencies for the same employer. Monday through Wednesday he works for Staffing Agency A and Thursday through Sunday he works for Staffing Agency B. He often works overtime for this company but since two different staffing agencies are paying him, he never gets paid time and a half. This situation really happened to Nieman Printing Inc..
How to Calculate Overtime Correctly For All Scenarios
If you want to track the types of jobs an employee does, you can do this using Account Codes with Timesheets.com.
If an employee works for two different staffing agencies, the employee can clock in to Timesheets.com and both the staffing agencies can log in to the account to retrieve the employee’s hours.
Keeping the accountant’s time separate for separate businesses is possible too. The employer would just set up his two businesses as different Account Codes in the system. At the end of the year he could run reports on each Account Code to see how much time his employee worked for each business name.
Timesheets.com can be configured to accommodate nearly any situation to help keep you in compliance. If you need help with your own business, give us a call! We’re happy to help.