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elaws - employment laws assistance for workers and small businesses

- Fair Labor Standards Act Advisor

Coverage - One Enterprise

The Fair Labor Standards Act (FLSA) stipulates that two or more business entities will be considered to be one enterprise when they involve: (1) related activities performed either through (2) unified operation or (3) common control by any person or persons for a (4) common business purpose.

  1. Related activities are the same or similar activities, such as those of the individual retail or service stores in a chain. Activities are also related when they are auxiliary and service activities generally necessary to the operation of a particular business, such as warehousing, bookkeeping, auditing, purchasing, and advertising. Likewise, activities are related when they are part of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products.
  2. Unified operation means combining, uniting or organizing the performance of related activities so as to be in effect a single business unit or organized business system which is directed to the accomplishment of a common business purpose.
  3. Common control exists where a number of persons, corporations or other organizational units have the power or authority to direct, regulate, govern or administer the performance of related activities. Common ownership is not a prerequisite for common control; sufficient ownership to exercise control, however, will constitute common control.
  4. Common business purpose will encompass activities directed to the same or similar business objectives, whether performed by one or more persons, corporations, or other business organizations.

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