Article contributed by Alexander Soric, Ellenoff Grossman & Schole LLP
Opinion letters are formal, written guidance from the U.S. Department of Labor (USDOL) officials explaining to the public how the agency would apply the law to a specific set of facts. While the letters are not binding on courts, they do serve as a powerful compliance tool and can be used as persuasive authority in defending against a legal claim.
On September 30, 2025, the USDOL issued an opinion letter describing when “horizontal” joint employment will require separate legal entities to be treated as a single employer for purposes of overtime under the Fair Labor Standards Act (FLSA).
The opinion letter involved employees who worked at a restaurant and a members-only club, both of which were located in the same hotel. After reviewing the facts relevant to the employees’ work and the relationship between the entities, the USDOL concluded that even if the restaurant and club are separate legal entities, the hours worked by employees at each establishment would need to be aggregated for purposes of FLSA compliance.
The USDOL explained that separately incorporated entities may be considered a single employer under the principles of “horizontal” joint employment if they are “sufficiently associated” with respect to the employees. While there is no bright-line test, “horizontal” joint employment may be found where the...
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