Under the Fair Labor Standards Act, if an employee works 36 hours a week for the tribal government, the employer is not required to pay overtime since employers are only required to pay overtime if the employee works more than 40 hours in a workweek.  If the tribal government employee supplements her livelihood with 8 additional hours of work for the gaming enterprise, is any part of that 8 hours considered overtime?

First, the tribe likely will argue that the FLSA does not apply.  The applicability of the FLSA is an open question under the law and this argument by the tribal employer may, or may not, prevail.  This question has been addressed by previous newsletters.

Second, the tribe will raise the defense of immunity and in many instances, but not all, the defense will terminate the legal proceedings.  This topic too has been addressed by previous newsletters.

Third, the tribe may argue that the tribal government and gaming enterprise are two separate employers and therefore the aggregate weekly hours (36 plus 8) do not trigger overtime.  This third defense is a loser.

The third response will not sell because the FLSA regulations define joint employers in a way which is disadvantageous for employers looking for clear guidance.  The regulation requires employers to look at all of the facts in the particular case and instructs:

“If all the relevant facts establish that two or more employers are acting entirely independently of each other and are completely disassociated with respect to the employment of a particular employee, who during the same workweek performs work for more than one employer, each employer may disregard all work performed by the employee for the other employer…”

In our hypothetical, since the employee works for the tribal government and the tribe is the owner of the gaming enterprise, the facts do not establish that there are two employers acting entirely independent of each other.  The regulations which further define the FLSA define a low standard for finding that employers are working jointly unless “…employment by one employer is not completely disassociated from employment by the other employer…” and in those instances all of the employee’s work for both employers are counted to determine whether overtime pay is due and if it is, both employers are responsible for ensuring that the proper overtime is paid.  The regulation discussed here is 29 C.F.R. Section 791.2.  Whether you use the law’s “entirely independent” standard or the regulations “complete dissociation” standard the combination of hours worked for the tribal government and enterprise likely trigger overtime pay.

The existence of two employer identification numbers (so-called tax identification numbers), one for the government and another for the enterprise, is not evidence of separate employers according to Department of Labor field manual which is used by this regulator to address and audit these questions for the federal government.

So the answer is: If the FLSA applies and the tribal government and its enterprise are joint employers, 36 hours of work for the government and 8 hours of work for the enterprise, trigger 4 hours of overtime pay for nonexempt workers calculated at 1.5 times the employee’s regular rate of pay.  Please note that the regular rate of pay may be different from the employee’s hourly rate.

Recommendation:  Assess your risks regarding the applicability or inapplicability of the FLSA.  If you comply with the FLSA, an analysis of your overtime practices is worthwhile.  In addition to a review of exempt versus nonexempt classifications, review your methods for calculating overtime including an overview of those workers simultaneously employed by different entities of the tribal government. There is a good chance that even though these workers do not trigger overtime by calculating the hours for individual employers, aggregating the hours between employers may trigger liability for overtime.  For these productive workers, the overtime pay may be worth every dollar to the employer, but miscalculation could generate serious consequences.