We pay with one check from the trucking company but there are two separate companies and two EIN's. The second company reimburses the trucking company for the accounting, bookkeeping, payroll services, etc.
Thank you for your follow-up, Sparky.In this situation there is a reasonable assumption that the companies are really one unit, since the employees get paid by one check. The employees almost see it as working for one company but having their time be 'bought' by a second entity but for just a lower rate. As a consequence they would be entitled to overtime once they hit 40 hours or more for joint hours, and you would then need to pay out overtime based on time and half on whatever additional hours that they work. If you would pay them separately and make them employees of both companies, and rather than reimburse, pay them separately out of each, then each hourly rate would count separately, so if they reach 40 hours jointly, it would not create an obligation for paying overtime. Instead, it would only create an overtime obligation if that specific company's time would go above 40 hours.Hope that helps.
Sparky,In your follow-up you asked:At what rate of overtime the higher trucking company rate or the lower labor rate? --------------At the rate that the person worked based on the project. So if his 41st hour is for trucking, he gets paid time and a half for a higher rate. If he worked as a laborer, then it would be a lower.Hope that clarifies.
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