Employment Overtime Pay: Everything You Need to Know
When your employees work more hours per week than scheduled, it’s important to ensure that they are properly paid. Most Canadian provinces conform to an overtime rate of 1 ½ times each worker’s standard pay. On average, Canada law dictates that overtime pay begins after an employee works longer than eight hours in a day or they work more than 40 hours in a week.
However, there are exceptions that Canadian business owners need to know about. Here, we will discuss these variances and other notable points regarding overtime pay. When you pay your salaried employees the correct overtime rate, you can avoid penalization.
Here’s What We’ll Cover:
Overtime Pay by Province
Since not all Canadian provinces are the same, we need to establish what each area’s requirements are for overtime pay. As you will discover, there are notable variances among the many provinces. This can prove to be a compelling factor for both business owners and employees.
If your business is in Alberta, you are required to pay your employees overtime after they work 44 hours in a week. This is a bit different than the usual 40 hours. Alberta also follows the overtime pay rule. Here, you must pay employees who work more than eight hours in a day. The regular rate of compensation is 1 ½ times your employees’ standard wages.
Furthermore, special rules might apply depending on the circumstances if you pay an employee a commission rate. This is true whether commissions make up part or all of their pay or if their workweek is compressed for any reason.
Alberta also stipulates that employees may request time off rather than accepting overtime pay. However, employees who accept this trade-off must sign a written agreement.
As an example, let’s assume an employee worked eight additional hours one week. They could apply for one day off next week and give up their typical overtime pay. This structure might be useful if the employee has an upcoming obligation but can’t take off that day.
Overtime law in British Columbia follows the typical Canadian overtime structure. This means 1 ½ times the standard salary for working more than 40 hours a week. But the daily structure is unique in terms of working hours and salary.
British Columbia still follows the same eight-hour working day. However, employees only receive 1.5 times their standard salary in the first four additional hours. After working for 12 hours, for every additional hour, the employee’s standard salary will double.
For example, let's assume your employees work 13 hours. They will receive 1 ½ times the basic salary for four hours and twice the basic salary for one hour of work over 12 hours.
If the employer and the employee reach an equal agreement, the overtime terms may be different. The average agreement refers to the calculation of working hours by finding the average for anywhere between one and four weeks.
For example, an employee might work four ten-hour shifts a week instead of the traditional eight-hour shift five times a week. They still work 40 hours a week, but they will not get overtime pay for working two extra hours. Or an employee might work 20 hours in a week and then 60 hours in the next week. They still work a total of 80 hours in two weeks, so they work an average of 40 hours a week.
Consider an employee who works four times a week on ten-hour shifts. If the employee works ten more hours in a week, they will get compensated at 1 ½ times the normal wage for the additional ten hours.
However, if an employee works 13 hours a day, they will get half of the time in the first two hours after the usual 10 hours. And, they will get double the salary for an additional hour after 12 hours.
Just like the overtime regulations in Alberta, workers in British Columbia can also use vacations instead of overtime pay. But remember, the employer and the employee must reach a written agreement.
Manitoba is another province that follows the tradition of working 40 hours a week and 8 hours a day. This is the most used in Canada when figuring overtime. As such, the overtime rate is the usual 1 ½ times.
Please note that overtime work is voluntary. Therefore, it’s not a requirement for employees based in Manitoba to work longer than eight hours a day or 40 hours a week. In addition, your employees may use their overtime hours as vacation time. The only stipulation is that all earned overtime must be used within three months.
Unlike hourly employees, commission pay in Manitoba is figured according to their regular pay. So if an employee earns $1,000 in a 50-hour week, $1,000 gets divided by 50. This gives you an average hourly rate of $20.
Overtime pay is $20 multiplied by 1.5, or $30. For the additional 10 hours, the employee will be compensated at $30 per hour, which is equivalent to an additional $300 in their salary.
In New Brunswick, overtime pay is based on the current minimum wage multiplied by 1.5. Employees who have received more than their overtime rate are not eligible for overtime pay. Eligible employees can only receive overtime pay after working more than 44 hours a week. This would provide four hours of overtime.
In addition, some occupations may come with different requirements for overtime compensation. Elsewise, they might be ineligible. Examples include some construction and government workers, program staff, and camp counsellors.
Newfoundland and Labrador
Newfoundland and Labrador’s overtime rate is just like New Brunswick. You calculate it by taking the current wage and multiplying it by 1.5. In addition, overtime is allowed only when an employee works over a 40-hour workweek basis.
But if one employee takes over another employee’s shift and the working hours exceed 40 hours, overtime provisions are not applicable. If the employer approves it, the workers may accumulate their worked overtime hours and put them toward vacation time.
Overtime requirements are a bit different in Nova Scotia, as they vary by occupation. However, most employees get an additional 1 ½ times their hourly rate after they work 48 hours or more in a week. In some industries (fisheries, gas, and oil), overtime pay provisions are based on the current minimum wage, not base pay. In these cases, working a 48-hour week is still applicable.
Moreover, there are some occupations that pay more when their employees put in over 110 hours in two weeks’ time. Sawmill workers and landscaping professionals are examples of such occupations.
If Ontario employees work more than 44 hours a week, they will receive time-and-a-half pay. As in British Columbia, the averaging agreement may affect how overtime is paid. As in Manitoba, employees working on commission use their average hourly rate to calculate overtime rates.
Prince Edward Island
Prince Edward Island is another province that requires its workers to be paid 1 ½ times their hourly rate of pay. However, they must work more than 48 hours in a single workweek. With that said, there are some occupations that have their own unique overtime rules.
Take ambulance drivers, for example. They can only receive overtime pay when they work over 60 hours in a workweek. Also, heavy equipment and road construction workers must work over 55 hours in a workweek to get overtime.
Quebec is a province that follows a typical workweek of 40 hours, and overtime pay is 1 ½ times the employee’s standard rate of pay. Employees can ask for time off rather than getting overtime pay. And in some cases, employees may refuse overtime if they have already put in 50 hours that week.
When determining overtime, vacation days and statutory holidays get counted as days worked. Therefore, they are eligible for overtime. Also, if there’s a written agreement that serves to stagger the working hours for several weeks, overtime pay requirements might not apply.
In most cases, Saskatchewan follows Canada’s typical overtime standard. When employees work more than eight hours a day or a 40-hour workweek, they will receive 1 ½ times their standard salary. However, some occupations are not eligible for overtime work, such as hunters, loggers, and fishermen.
If the Director of Labour Standards issues an average working hour permit to the employer, the overtime rules can change or even not be required.
Canada’s labour laws are designed to protect employees from working too much and not getting paid enough. This includes overtime. Do your workers work beyond a set overtime threshold? If so, you need to pay them more. It is important to understand these overtime laws to comply with them.
Exemptions and Holidays
In Canada, salaried workers can get overtime pay. But exempt professions like lawyers and doctors can’t receive overtime pay requirements. Moreover, Canadian law dictates that workers can take several paid days off each year.
Paying your employees correctly is essential for any business owner. It not only keeps your crew happy, but it also prevents you from suffering penalties. You can get the edge you need over your payments by downloading FreshBooks.
You can set up payment schedules, make easy bank deposits, and much more. And for more great tips on small businesses, don’t forget to zip on over to our Resource Hub. You will find information regarding registration, income taxes, and more.