Business coverage is when two or more entities are considered as a single business due to shared assets, personnel, or skills. It is regulated by the Fair Labor Standards Act and requires commercial activity that is interstate in nature and a minimum annual turnover. Government entities, schools, and companies that meet the criteria are included, while non-profit organizations are excluded.
Business coverage is a term that is used to identify two or more business entities that are believed to share certain types of businesses in a way that essentially allows the multiple entities to be considered as a single business. The essential elements of this type of classification are outlined in the laws and regulations in force in the United States of America, particularly in what is known as the Fair Labor Standards Act (FLSA). Implemented in 1938, this act helps set minimum standards for employment in a number of situations, including guaranteeing skilled workers some sort of minimum hourly wage while also setting standards for working conditions.
The concept of business coverage usually focuses on what kind of attributes apply to business entities considered to be related in some way. This usually means that if certain assets are shared or are material to some extent between these related entities, they can be thought of as a single enterprise. For example, contract sharing would qualify under this concept, as would personnel sharing in the day-to-day functions of the companies involved. Even the sharing of skills and knowledge can be enough to create a corporate coverage condition.
There are other qualifications that must be present for corporate coverage status to exist. For example, the entities under consideration must engage in some type of commercial activity that can reasonably be classified as interstate in nature and not just intrastate. Annual turnover is also a standard for assessing corporate coverage, with each entity within the related business group needing to generate at least that amount.
Different types of business entities can be considered part of a business coverage situation. For the most part, government entities would fall into this category, ranging from local departments within a city to major departments and divisions within a national government structure. Schools and school systems of different types are usually included in this type of classification. Companies with the required amount of annual turnover and business interests that cross state lines would also meet the basic criteria. For the most part, organizations that are considered non-profit, such as houses of worship or religious organizations, are excluded from business coverage, even if they operate on a national scale.
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