Employees Performing Second Job for the Same Employer
Employees sometimes express interest in working a second job the employer has advertised. (i.e., mowing, landscaping, etc.) Or, an employer may ask an employee to temporarily fill-in an open position. This situation raises an important question: What are the requirements of the employer under the Fair Labor Standards Act (FLSA) when an employee performs two jobs for an employer? The answer depends on whether the employee’s primary duty is classified as non-exempt or exempt.
Non-exempt employees performing two jobs for the same employer must receive overtime for hours worked over 40 in a workweek. There are two options for calculating overtime.
- Overtime may be computed on the weighted average of the two rates; or
- If the employer and employee have an agreement prior to the overtime being worked, the overtime may be paid based on the regular rate of the job where there the employee performs overtime. [See the Wage and Hour Fact Sheet on Overtime for more information on calculations. http://www.dol.gov/whd/regs/compliance/whdfs23.pdf.]
Employees who meet the tests to be classified as exempt under the Fair Labor Standards Act are exempt from minimum wage and overtime. Consequently, as long as their primary duty is exempt when taking into consideration additional duties, they maintain the exempt status even if receiving additional pay.
The term “primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.
Caution is advised when considering an exempt employee to perform a secondary job that is non-exempt as this would likely be scrutinized by Wage and Hour if brought to their attention. Call one of our expert Advice and Resolution advisors if you have this situation occurring at your workplace.
Overtime and Joint Employment
Overtime is also due when there is a joint employment relationship and the employee works more than 40 hours per week. An example you may not have considered is where your employee has a separate, after-hours business such as catering, landscaping, etc. Even though they may advertise and be considered an independent contractor, they personally should not perform work for your business in that capacity unless you want to consider it as working a second job for you (with potential for overtime).
Other joint employment relationships may also trigger overtime responsibilities. [See http://www.law.cornell.edu/cfr/text/29/825.106 for other examples.]
Frequently Asked Questions
Can an employee hold two separate positions with the same employer?
Yes, but employers must be careful about how hours are tracked and compensated. Under the FLSA, all hours worked for the same employer in a workweek are combined to determine overtime eligibility. If an employee works 25 hours in one role and 20 hours in a second role for the same employer, all 45 hours count — and the employer owes overtime for the 5 hours above 40.
How is overtime calculated when an employee has two jobs at the same employer?
Combine all hours worked across both positions. Overtime must be paid for all hours over 40 in the workweek. For the overtime rate, if the two positions pay different rates, the employer can use either a weighted average (most common) or the rate of the position being worked during the overtime hours if agreed in advance. The employer cannot average rates to avoid overtime.
What are the risks of treating dual-role employees as independent contractors?
Misclassifying an employee who performs a second role as an independent contractor to avoid overtime is illegal under the FLSA. The “economic reality” test — not the label — determines worker status. An employee performing work for the same employer under any label is likely still an employee for FLSA purposes, and misclassification creates back wage, penalty, and audit risk.
Should employers have a policy on employees working secondary roles?
Yes. A clear moonlighting or secondary employment policy should address: disclosure requirements for secondary employment (internal and external), conflict of interest review, overtime implications when secondary work is for the same employer, and performance expectations ensuring the primary role is not negatively impacted. Apply the policy consistently across all positions and levels.
Are there state-specific rules on employees holding second jobs with the same employer?
North Carolina and South Carolina follow federal FLSA rules for overtime without adding additional requirements. Employers should ensure state minimum wage compliance for all positions. If either role is covered by a specific license requirement or wage order (hospitality, construction), additional rules may apply. Consult with HR counsel when structuring dual-role arrangements.
