Hours of work and overtime
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The document discusses overtime pay requirements under Ontario employment law. It covers statutory requirements, common myths, and distinctions between exempt and non-exempt employees. Recent case law establishes that merely having supervisory or managerial duties is not enough to qualify for exemption; the tasks must be primarily of that character. Upcoming Bill 146 proposes increasing the limitation period for unpaid wage claims and requiring employers to complete audits of their compliance upon notice.
Hours of work and overtime
- 1. Hours of Work and Overtime: The “Elephant” in the Room Agenda 1. OVERVIEW OF STATUTORY REQUIREMENTS 2. MYTHS & MISCONCEPTIONS 3. EXEMPT v. NON-EXEMPT – DISTINCTION WITHOUT A DIFFERENCE? 4. CASE LAW UPDATE: SUING FOR OVERTIME PAY 5. LOOKING AHEAD – BILL 146 Chuck Tahirali, Senior Human Resources Consultant
- 2. Employment Standards Act, 2000 • Overtime pay = time-and-a-half (1.5x) employee’s regular rate of pay. • Definition of “regular rate” varies depending on whether paid by the hour. • For most categories of employee, overtime pay after 44 hours worked in a week. • Other thresholds may apply.
- 3. Employment Standards Act, 2000 • If employer adopts lower threshold (<44hrs), lower threshold becomes employment standard. • Permissible to use “lieu time” compensation if certain requirements met: – Same 1.5x calculation – Written agreement of affected employee – Paid time off given within 3 months (or 12 months with affected employee’s written agreement)
- 4. Averaging Methodology • Hours of work averaged over period of 2 or more consecutive weeks for purpose of determining entitlement to overtime pay. • Requires an explicit written averaging agreement with affected employee. • Requires receipt of “Approval” from Ministry of Labour.
- 5. Averaging Methodology • Terms of Ministry Approvals – Approval must be posted in workplace • Terms of written averaging agreements with employees – Expiry date (2 years) – Irrevocable prior to expiry date unless parties agree
- 6. Limits on Hours of Work • Daily maximum (8 hours or number of hours in regular workday) • Weekly maximum (48 hours) • Limits may be exceeded if: – Written agreement of employee – Approval from Ministry of Labour (and posted in the workplace) – Most approvals provide for up to 60 hours/week
- 7. “Excess Hours” Agreements • Non-Union employees: Agreement only valid if Ministry “fact sheet” provided and written agreement contains term confirming receipt. • Revocable by employee giving 2 weeks of written notice.
- 8. Record-Keeping Requirements • Averaging agreements and excess hours agreement must be retained for at least 3 years after day on which work last performed under terms of agreement. • Number of hours an employee works in each day and in each week must be recorded.
- 9. Employees paid a “salary” • No requirement to record number of hours worked in each day and in each week if employee paid a “salary” if: – Employee is “exempt” from hours of work and overtime pay provisions of ESA; or – Number of hours worked in excess of daily and weekly limits are recorded. • “Salary” = fixed amount for each pay period + amount actually paid does not vary unless more than 44 hours worked in a week.
- 10. Myths and Misconceptions • Salaried employees are exempt • Office or “white collar” jobs are exempt • Salary includes a certain amount of overtime hours • Salary includes overtime pay • Policy requiring pre-approval of overtime is effective means of limiting liability
- 11. “Hours of Work” • Work is deemed to be performed if in fact it is performed by an employee even though a contract or policy expressly forbids or limits hours of work; or • Requires the employer to authorize the hours of work in advance, i.e., before they are worked.
- 12. “Hours of Work” • Work is deemed to be performed if it is permitted or “suffered” to be done by the employer. • Meal breaks excluded if no expectation of work. • Other rest times or breaks included as hours worked if required to remain at the workplace.
- 13. “Hours of Work” • Daily commute to/from work? • Travel time – conferences, meetings, flights • Blackberry time? • Voluntarily working late? • Taking work home on the weekend?
- 14. “Exempt” v. “Non-Exempt” • Very few categories of employee exempt from coverage under ESA. • Exemptions vary from Part to Part. • Hours of work / Overtime exemptions: – Commissioned salesperson – Information technology professional – Managerial/Supervisory
- 15. Managerial/Supervisory Exemption • A person whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis. • How courts interpret this exemption. • How Ontario Labour Relations Board interprets this exemption.
- 16. Case Law • Tsakiris v. Deloitte & Touche (2013) • Glendale Golf & Country Club (2010) • Being “managerial” or “supervisory” in character not enough • Meaning of “irregular” and “exceptional”
- 17. If an “exempt” employee: • Performs non-exempt work (e.g., non- supervisory or non-managerial tasks) in a particular work week, in addition to his/her regular exempted duties; • Then the employee is entitled to overtime pay for any overtime hours worked unless the time spent by the employee performing the exempt work was less than one-half of the total time worked that week.
- 18. Update: Class Action Lawsuits • “Misclassification” lawsuits • “Off-the-clock” lawsuits • Canada Labour Code v. Ontario ESA • Better benefit defence • Ontario Court of Appeal “Trilogy” • Recent developments in Ontario
- 19. BILL 146 • If passed: – Removes the $10,000 ceiling on recovery of unpaid wages, including overtime pay; – Increases the time limit for a claim for wages from 6 months (12 months for recurring violations) to 2 years; – Directs an employer to complete an ESA compliance audit of their records and practices to determine ESA compliance. Employment standards officer would be able to require the audit by providing the employer with written notice.
- 20. BILL 146 • If passed: – Introduces ‘joint and several liability’ between temporary help agencies and their client employers for unpaid wages (including overtime pay). – Requires both the client employers and temporary help agencies to keep records of hours of work.