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April 11, 2005
Dear Name*,
This is in response to your request for an opinion on the
application of “joint employment” under the Fair Labor Standards Act (FLSA) to
one of your clients, a health care system (the System) consisting of two acute
care hospitals, a nursing home, and one combined long-term hospital and nursing
home. The System is owned by a single, not-for-profit parent holding company
that has no employees.
Each facility within the System has its own Human Resources Department, employee handbook, payroll system, retirement plan, and Federal Identification Number. There is no regular interchange of employees among the facilities. You present the example of a Licensed Practical Nurse who works at
an acute care hospital during the week and at the nursing home on the weekend. You ask whether this employee would be due overtime pay if the total of his or her hours at both locations exceeds 40 in a week.
As you know, “employee” under Section 3(e) of the FLSA means
any individual employed by an employer, and “employer,” under Section 3(d),
includes any person acting directly or indirectly in the interest of an
employer in relation to an employee. The term “employ” means to suffer or
permit to work, and includes the principles of joint employment. Joint
employment refers to a condition in which a single individual stands in the
relation of an employee to two or more persons at the same time. A
determination of whether the employment is to be considered joint employment depends
upon all the facts in the particular case. If the facts establish that two or
more employers are not completely disassociated with respect to the employment
a particular employee, a joint employment situation exists (29 CFR 791.2(a)).
The regulations on joint employment are located in 29 CFR
Part 791, copy enclosed. Nothing in the FLSA prevents an individual employed
by one employer from also entering into an employment relationship with a
different employer. An employee who performs work which simultaneously
benefits two or more employers, or works for two or more employers at
different times during the workweek, generally will be jointly employed where
the employers are not completely disassociated with respect to the employment
of the particular employee and may be deemed to share control of the employee,
directly or indirectly, by reason of the fact that one employer controls, is
controlled by, or is under common control with the other employer (29 CFR
791.2(b)(3)). For example, where one business entity controls another through
total stock ownership, and/or interlocking directorates and common corporate
officers, we have concluded that employees of the latter are simultaneously
employees of the former. See opinion letters of January 7, 1986 and December 4, 1984.
Based on the information you have provided, it is our
opinion that all employees of the System’s facilities are under the under the
common control of the parent company. You have provided numerous instances of
association between the System’s various employing entities. For example, the
nursing home and the combined hospital/nursing home share a common President
and Board of Directors. At times, the hospital’s Human Resources Department
provides administrative support for the Human Resources staff of the nursing
home. The System’s Vice President of Human Resources and several senior
executives and senior managers “have responsibility for more than one entity”
within the System. Some of the facilities’ personnel policies are the same,
such as those regarding the Family and Medical Leave Act, workplace harassment,
and anti-nepotism. Non-union employees of the System have a common health care
plan. System job vacancies are posted within the System before they are
advertised publicly. Thus, multiple associations exist within the System and
we believe these outweigh the fact that each entity does its own hiring and has
its own pay scale and payroll system. Thus, we believe that a joint-employment
relationship exists in weeks in which an individual works for more than one of
the System’s employers. As you know, joint employers are responsible, both
individually and jointly, for compliance with the FLSA, including the overtime
compensation provisions. Therefore, the entities must aggregate all hours
worked in a workweek by an employee who works for more than one entity. See
opinion letters of July 13, 1998 and January 7, 1999; Chao v. A-One Medical
Services, Inc., 346 F.3rd 908 (9th Cir. 2003).
This opinion is based exclusively on the facts and
circumstances described in your request and is given on the basis of your
representation, express or implied, that you have provided a full and fair
description of all the facts and circumstances that would be pertinent to our
consideration of the question presented. Existence of any other factual or
historical background not contained in your request might require a different
conclusion than the one expressed herein. You have represented that this
opinion is not sought by a party to a pending private litigation concerning the
issue addressed herein. You have also represented that this opinion is not
sought in connection with an investigation or litigation between a client or
firm and the Wage and Hour Division or the Department of Labor. This opinion
letter is issued as an official ruling of the Wage and Hour Division for
purposes of the Portal-to Portal Act, 29 U.S.C. 259. See 29 C.F.R. 790.17(d),
790.19; Hultgren v. County of Lancaster, Nebraska, 913 F.2d 498, 507 (8th
Cir. 1990).
We trust that the above information is responsive to your inquiry.
Sincerely,
Alfred B. Robinson, Jr.
Deputy Administrator
Enclosure: 29 CFR 791
Note: * The actual name(s) was removed to preserve privacy.
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