Overtime & Joint Employment Clarity: New DOL Opinion Letter

Is your company a joint employer, subject to trickier overtime compliance issues? If you don’t ask that question, employees might do it for you.

Case in point: An employee recently contacted the Department of Labor (DOL), asking for guidance on whether a restaurant and members-only club, both of which employed her, were complying with the overtime provisions of the Fair Labor Standards Act (FLSA).

Specifically, she wanted to know if the DOL considered the two entities to be joint employers. If so, her hours would need to be combined each workweek in order to determine if she’d exceeded 40 hours worked.

The DOL responded to her by issuing Opinion Letter 2025-02 on September 30, 2025.

In that opinion letter, the DOL stated the two entities were “jointly and severally liable for all aspects of compliance under the FLSA.” Of note:

• The restaurant and members-only club were physically connected, and
• Their ownership, management and operations appeared common.

Different Payroll Systems

As the employee explained to the DOL, she worked 40 hours or fewer per week, earning $28 per hour, as a dinner hostess at the restaurant. Sometimes when she was clocked in at the restaurant, she’d be directed to work in the members-only club.

Then, when the members-only club asked her to add four lunch shifts to her schedule each week, she asked if she’d receive overtime. The answer was “no.”

The businesses based their decision on details such as having separate business structures and using different timekeeping and payroll systems.

But the DOL focused on other details. For starters, both companies offered her the identical rate of pay, and her additional shifts wouldn’t conflict with her existing shifts.

Overtime Payments

Bottom line: The two entities were operationally integrated with each other. Not only were the restaurant and members-only club upstairs and downstairs from each other in the same hotel, but they also shared a common kitchen and had similar food and beverage menus.

Plus, although they had different management teams, some managers supervised in both places, and the entities had the same owners.

Therefore, if her hours exceeded 40 per workweek when adding up hours worked at both locations, her employer had to pay her overtime according to the FLSA.