Los Angeles, CA asked in Employment Law for California

Q: If I own 2 companies, can I have employees work 8 hours in one and part time in the other? Same location.

We have 2 companies located in the same building. Can they work for one full time and part time for the other, the same day? Technically, doing 12 hours with 2 different companies.

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3 Lawyer Answers

A: Yes, you can have the same employee work at two of your locations. The issue will be whether they will need to be paid overtime after they work 8 hours in a workday or 40 hours a workweek. That issue will be resolved by looking at the type of work, the level of control by you of the two companies, and several other factors. It would be wise for you to locate and consult with an employment law attorney who regularly represents employers to get specific, confidential guidance. Good luck to you.

A: You will likely be sued for multiple wage and hour violations, including but not limited to unpaid overtime, meal and rest break violations, wage statement penalties, etc., unless there is a great deal of separation between the companies. The corporate form is not enough.

If the companies use the same HR people, your companies will likely be treated as one company for purposes of wage and hour law. Alternatively, the employees may argue that the companies are really alter egos.

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James L. Arrasmith
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Answered

A: While it's possible to have employees work for two separate companies you own, you must carefully follow California labor laws regarding overtime, meal breaks, and rest periods. The total hours worked across both companies would be considered cumulative for overtime purposes, even if they're separate legal entities.

For a 12-hour workday split between two companies, you would need to pay overtime rates (1.5x regular pay) for all hours worked beyond 8 in a single day. Additionally, you must provide proper meal breaks (30 minutes after 5 hours, and a second 30-minute break if working beyond 10 hours) and rest periods (10 minutes for every 4 hours worked).

You should maintain separate payroll systems and clear documentation for each company, but remember that the California Labor Code views the total hours worked by an employee in a day collectively, regardless of the employer. It would be wise to consult with an employment attorney to ensure proper structuring of this arrangement and to verify compliance with all relevant wage and hour laws.

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