With the recent high-profile class action lawsuits launched
against many employers claiming over $600 million in unpaid
overtime, it is important for all employers to review their
policies and ensure they are meeting their overtime pay
obligations. Below is a summary of some of the key facts
employers who employ employees in Ontario should know about
overtime. Even though this article highlights the issues
in Ontario, there is similar legislation in other
Which Employees Qualify For Overtime?
The main issue regarding overtime is determining which
employees are actually entitled to overtime pay. The most
common error employers make is incorrectly excluding employees
who are eligible. The manner in which the employee is paid
(i.e. salary or hourly) is not relevant to such a
determination. In general, most employees are covered by the
overtime pay provisions in the Employment Standards Act,
2000 (ESA). However, there are certain classes of
employees to which the overtime pay provisions do not apply. As
a practical step, an employer should assume that each employee
is entitled to overtime unless specifically exempted by the
There are several job categories that are excluded from the
overtime pay requirements. These categories include:
information technology professionals (as defined in the
ESA), architects, engineers, lawyers, medical
professionals, accountants, teachers, commissioned sales
people, and employees whose work is supervisory or managerial
in character and who may perform non-supervisory or
non-managerial tasks on an irregular or exceptional basis. It
is the "managerial and supervisory" category that
employers need to give special attention to. Even though an
employee may have the title of "manager," such an
employee could still be entitled to overtime. When determining
whether an employee is a supervisor or manager, it is vital to
consider the nature and character of the work that the employee
actually performs. If the employee regularly
performs non-managerial duties in the ordinary course of his or
her work, that employee will not be excluded from the overtime
What Is The Overtime Threshold?
In Ontario, if an employee is covered by the overtime pay
requirements, the ESA requires that he or she must be
paid overtime pay for each hour of work in excess of forty-four
hours in a week. ESA regulations also prescribe
"special" overtime thresholds that apply to specific
categories of employees. According to these special thresholds,
overtime pay is triggered once an employee works in excess of
fifty to sixty hours in a given week (depending on the
applicable threshold). In general, these special overtime
thresholds apply to employees engaged in road building, certain
hotel employees, seasonal workers engaged in processing fruit
or vegetables and certain truck drivers. Any time worked in
excess of the overtime threshold must be paid out at a rate of
1 ˝ times the employee's "regular
rate" as defined in the ESA. It is the
employer's obligations to ensure that time records are
kept by employees. Failure to ensure such time records
are kept will result in an inability on the part of the
employer to defend against any claims.
As evidenced by the class action lawsuits mentioned above,
failing to properly pay overtime pay can lead to costly and
time-consuming litigation. To avoid becoming subject to similar
litigation, every employer should ensure it has clear and
consistent policies that meet the minimum standards required by
the ESA, and that such policies properly identify
which employees are entitled to overtime pay.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).