Most employees do not realize that they are entitled to overtime pay. The fact is, the vast majority of employees are entitled to overtime pay. How you are paid, whether you are paid an hourly rate, an annual salary, or commissions, is not determinative of whether you are eligible for overtime pay. Even if you are paid a fixed annual salary and no one is tracking your hours of work, you may still be entitled to overtime pay.
There are only a few occupations such as accountants, lawyers, or doctors which are not eligible for overtime pay. Moreover, individuals who exercise true supervisory or management functions are not eligible for overtime pay. Know that just because you may have a job title of ‘manager’ or ‘director’ does not mean that you are automatically exempt from overtime pay.
Under the Ontario Employment Standards Act, 2000 (“ESA”), employees are entitled to receive overtime pay after working in excess of 44 hours in a week. Overtime pay is calculated at the rate of 1.5 times your regular hourly rate (“time and a half”). There is no daily overtime, unless you have an employment contract or a collective agreement that provides for daily overtime pay.
In lieu of providing overtime pay, your employer can provide paid time off in lieu of overtime pay (lieu time) at the rate 1.5 hours of paid time off from work for each overtime hour worked. For this to be allowed, there must be a written agreement between the employer and the employee substituting lieu time for overtime pay. In the absence of such an agreement, the employer is obligated to provide overtime pay.
Federally regulated employees, for example, those who work in banking, telecommunications, broadcasting, railways, airlines or interprovincial trucking are subject to the Canada Labour Code (“CLC”), which sets out basic overtime entitlements. Under the CLC, overtime pay is calculated slightly differently. Employees are generally eligible for overtime pay at 1.5 times their regular rate after working over their ‘standard hours’ of work, which in most cases is 8 hours per day or 40 hours per week. Overtime is calculated on a daily and a weekly basis and if there is a difference between the amounts, you must be paid the higher amount.
Many employers have an overtime policy or contract that provides for a more generous overtime pay or lieu time entitlement. If so, then your overtime pay entitlement will be governed by the overtime policy or contract in place. Some contracts may also provide for an averaging arrangement, whereby overtime hours are averaged out over a period of up to 4 weeks.
Any contract or policy that provides for less than the minimum statutory overtime entitlement is void for being contrary to legislation, even if you signed it.
If you believe your employer may not be complying with its overtime pay obligations, give Pak Smith Employment Lawyers a call today to find out your rights.