Labor & Employment Law Daily Wrap Up, DOL NEWS—WHD issues opinion regarding joint employment under the FLSA, (Oct 1, 2025)

By Brandi O. Brown, J.D.

Employees who worked at both a restaurant and a members’ club within a single hotel building were told they were not eligible for overtime pay when they worked over 40 hours in a workweek, according to the letter writer.

Yesterday, the Wage and Hour Division of the Department of Labor announced publication of several opinion letters offering official written interpretations from the division, explaining how the WHD interprets laws applicable to specific circumstances presented by individuals or organizations. Opinion letters provide official written interpretations from the division, explaining how laws apply to specific factual circumstances presented by individuals or organizations.

One of those opinions, FLSA2025-05, related to whether two entities that are physically connected, and whose ownership, management, and operations appear common, are jointly and severally liable for all aspects of FLSA compliance. More specifically, WHD was asked to determine whether the employee—a hostess—was jointly employed by a restaurant and members-only club housed in the same hotel such that their hours should be combined for purposes of calculating the hours worked and paying the employee overtime for those worked over 40 in a workweek.

The short answer by WHD is that, yes, under the facts described, the hours must be combined for purposes of calculating the employee’s hours worked each workweek, and that both the restaurant and members club are jointly and severally liable for all aspects of FLSA compliance.

Similar menus, trade names, shared kitchen. The employee who requested the opinion worked as a hostess at the restaurant, but then was offered shifts at the members club, located on the second floor of the restaurant. The restaurant and club share a kitchen, offer substantially the same food and beverages, and operate under similar trade names. Employees also perform work in both the restaurant and club in the same workweeks and sometimes, when clocked in at the restaurant, the employee was asked to work in the club, at the same rate of pay.

Different systems but common ownership. According to the employee, they had observed managers from the restaurant participate in disciplinary matters at the members club and reported that, although the restaurant and club are purported to have separate business structures and possibly use different timekeeping and payroll systems, the employee believes they have common ownership. Nevertheless, the employee contends, when they were asked to pick up four additional shifts each week at the club on top of the 40 hours already scheduled for the restaurant, they were told they would not be paid overtime.

Horizontal joint employment. WHD concluded that the facts provided by the hostess were sufficient to demonstrate a horizontal joint-employer relationship under the FLSA, as the restaurant and members club are sufficiently associated with each other with respect to the hostess’s employment. It had already explained that, “[i]f horizontal joint employment exists, the employee’s total hours worked each workweek for all joint employers must be used (1) to confirm that the employee has received the FLSA minimum wage and (2) to determine the employee’s entitlement to overtime pay—both with respect to whether or to what extent overtime hours have been worked and the total remuneration and total hours worked for purposes of calculating the regular rate and resulting overtime premium due.”

Indicia of joint employer status. As for the factors considered, WHD noted that the “two facilities appear to be operationally integrated with each other, including their physical proximity, their common kitchen, and their similar food and beverage menus.” It noted that while the restaurant and club might have separate management teams, some managers supervised and managed both at times, and the facilities apparently have the same owners. Moreover, the fact that the employee could be “clocked in” at the restaurant and then directed to work in the club similarly indicated sufficient association, as did the identical rates of pay the hostess received at both and the fact that the additional shifts they were offered at the club did not conflict with their restaurant schedule, which suggested coordination. “All these factors are indicia that the two operations are at minimum joint employers under the FLSA,” the letter explained.

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