We all know that ice cream comes in many flavors. But some are particularly unusual. For example, a French company sells ice cream with flavors like foie gras, caviar, mustard, and truffle. Presumably, those come in separate scoops.
A U.S. company sells deviled egg custard with smoked back team ice cream. That’s a firm no for me. A New York gelateria offers wasabi. Again, pass.
Less fun fact: Joint employment also comes in two flavors — vertical and horizontal.
Vertical joint employment is when the employee of one company performs services for the benefit of a second company, like in a staffing agency scenario. That’s probably what you think of when you consider joint employment.
But there’s also horizontal joint employment, and that flavor was the subject of a recent DOL opinion letter (FLSA 2025-05). The letter reminds us that even under the current administration, the concept of joint employment is alive and well.
Horizontal joint employment occurs when an employee works for two separate companies in the same week, but those companies share ownership, management, scheduling responsibility, or other significant areas of coordination.
Under the facts addressed in the opinion letter, a hostess worked at both a restaurant and a members-only club. She worked fewer than 40 hours per week at each, but worked more than 40 hours per week combined.
The restaurant and the club were on the same property, shared a kitchen, shared some managers, coordinated schedules, and were “operationally integrated with each other,” as the DOL put it. The employee also sometimes performed work for the club while clocked in at the restaurant.
While the locations were run by separately incorporated entities and had separate upper management teams, the overlap in operations was enough for the Acting Wage and Hour Administrator to conclude that the employee was jointly employed. That means her hours had to be combined for purposes of determining her eligibility for overtime. If she worked more than 40 hours combined for the two entities, she would be due an overtime premium. The two joint employers would have to determine how to allocate the premiums between them, and if they failed to do so, both would be jointly liable.
This opinion letter is a good reminder not to overlook the potential for horizontal joint employment. It’s a lesser known flavor of joint employment, but just as loaded with cream and sugar.
© 2025 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.
