If I own2 businesses restaurants and1 isa corporation and1 isan LLC, can I have employees work for both stores and not have to pay overtime?

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If I own2 businesses restaurants and1 isa corporation and1 isan LLC, can I have employees work for both stores and not have to pay overtime?

Here is an example: Jose works 35 hours at 1 store and 40 hours at the other in the same week. Store 1 pays him a check separate than store 2. Pay dates may or may not be the same. Both payrolls would be done separately and drawn off of separate accounts.

Asked on December 20, 2011 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If both business have the same ownership, then the answer is most likely no--the total hours worked by the employee would be considered in determining whether he or she is eligible for overtime. The fact that the business entities, locations, bank accounts, etc. are separate would not matter. The reason for this is the obvious one: if it were this easy to avoid overtime, everyone would do it--structure their business as 2 or more separate entities and have employees do less than 40 hours work for each one each week. To avoid this, the courts and department of labor don't look at the outward form, but at the underlying realty--which is that the same owner is requiring more than 40 hours of work per week.


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