As an employer or employee in Ontario, it is essential to understand the rules around overtime to ensure a fair and compliant work environment.
In this article, we demystify the key aspects of calculating overtime according to the Employment Standards Act (ESA), covering thresholds, exceptions, and unique cases to help you stay compliant.
The Basics of Overtime
When Does Overtime Begin?
Overtime in Ontario starts after 44 hours worked in a week. Any hours beyond this threshold must be paid at a rate of at least 1.5 times the employee's regular hourly rate.
Practical Example:
If an employee earns $20 per hour and works 48 hours in a week, the 4 overtime hours must be paid at $30 per hour.
Weekly Calculation:
Overtime is calculated on a weekly basis. This means that even if an employee works more than 8 hours in a day, only the hours exceeding 44 hours in a week are considered overtime.
Exceptions and Specificities
Exceptions:
Certain professions, such as managers and nurses, and industries like trucking, construction, and agriculture, are exempt from standard overtime rules.
Averaging Agreements:
For variable schedules, a written agreement can be made to calculate overtime based on an average over up to four weeks. For example, if an employee works 50 hours one week and 30 the next, overtime will be calculated based on the average of both weeks (40 hours per week).
Documentation and Managing Overtime
Employers must accurately document the hours worked by each employee, including overtime, and keep these records for at least three years.
Overtime Banking
Overtime can be compensated with equivalent time off, but this must be agreed upon in writing between the employer and the employee. The time off must be taken within three months of accumulating the overtime, unless a longer period is agreed upon.
Conclusion
Adhering to the ESA’s rules on overtime is essential for maintaining a fair workplace and avoiding disputes. Understanding these rules ensures effective and fair time management.
References:
Feuille de Temps
We developed Feuille de Temps to help you avoid complex calculations and errors.
Feuille de Temps automatically calculates overtime premiums for Ontario and the rest of Canada.