I am practicing drawing entity-relationsip diagrams and in the example it states "many employees work on a project, and employee can work many projects but can only be assigned to at most one project at a given time." Does the final statement after the "but" mean that there is another relationship?

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It means that time is an essential component of the relationship. It's telling you that there's a functional dependency (employee, time) -> project.

In an entity-relationship diagram, I might model it like so:

Assignment weak associative entity

I made it a weak entity dependent on Employee and with time as a weak key, but it's still a relationship between Employee and Project, hence a weak associative entity.

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