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Can an employee clean the office after hours for a flat fee, or is it overtime?

This question gets asked several times a year. The scenario goes like this … a medical practice gets poor cleaning services from its vendor so an employee asks to clean the office, after hours, for a flat fee. Seems like a win-win solution. The employer receives a clean office and the employee puts some extra money in their pocket. What are the issues for the employer to consider?

The first option is employment. If the medical assistant is working 40 hours for the employer, and the cleaning work takes 6 hours per week, then the additional hours would need to be added to the 40 hours worked in her primary assignment, and overtime paid for hours in excess of 40. The key element is that the employee is rendering services to the same employer, and it does not matter that the employee is performing different work. The employer could pay the employee at a different rate of pay for the cleaning work, but the hours worked would still count toward overtime.

In calculating the overtime rate for an employee working two or more different jobs for the same employer, the Faur Labor Standards Act (FLSA) requires the use of a weighted average. Assume the medical assistant earns $18 per hour and receives $15 an hour for the after-hours, and weekend cleaning time. If the employee worked 40 hours in planning ($16 x 40= $720 and 6 hours as a cleaner ($15 x 6 = $90), the employee’s total straight-time earnings for the week is $810. The weighted average hourly rate is determined by dividing the total earnings by the total hours ($810/46 = $17.61), resulting in a half-time rate of $8.81. So, in addition to the $15 per hour for cleaning, the employee would be due an additional $8.81 for the 6 overtime hours. Her total pay is $810 plus $52.86 for overtime, for a total of $862.86. Read DOL Opinion Letter on this topic.

The second option is an independent contractor. If the employee actually has a side cleaning business, with a business EIN and other customers, then the practice could hire her cleaning company to perform the cleaning for a flat fee. The businesses should sign a service contract and maintain a business relationship. To avoid overtime, the employee must have her own independent business.

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