Overtime: The Least You Need to Know

Overtime. It’s a word that is synonymous with “headache” for many people managers and screams “over budget” to business owners. Administering overtime can be confusing, can be a big time drain, and it’s often handled inconsistently or informally, leading to disagreements and conflicts over employee entitlements down the road. To complicate the issue, many companies aren’t even aware that their overtime practices don’t meet employment standards minimum requirements.

To clear up some of the myths, as Part 1 of our Time Management Series, we’ve put together an Overtime 101 FAQ list outlining the least you need to know about overtime pay in BC. If you are located in a different province, be sure to check out your province’s Employment Standards.

“If an employee works more than 8 hours in a day OR works more than 40 hours in a week, the additional hours worked are paid at 1.5X their regular rate.“

When do you need to pay an employee overtime?

If an employee works more than 8 hours in a day OR works more than 40 hours in a week, the additional hours worked are paid at 1.5X their regular rate.

If an employee works more than 12 hours in a day, the additional hours must be paid at 2X their regular rate.

Are there any exceptions to overtime requirements?

Yes – there are a few important exceptions to overtime pay requirements, including:

• Employees in management positions.
• Unionized employees – overtime for unionized employees is detailed in the collective agreement.
• Employees in certain industries (Ex: transportation, oil and gas, silviculture, high technology and farm workers).

For a full list of employees and occupations excluded from overtime requirements, Click Here.

So, who counts as a manager?

Though it might make an employee feel important, simply granting someone a title of “manager” isn’t enough to get out of paying them overtime. They must actually have the responsibilities of a manager, which means that either:

Their principal responsibilities consist of supervising and/or directing human or other resources.

OR

They are employed in an executive capacity.

Still not clear? More detailed information on how to tell if an employee is a manager can be found here.

Can overtime be banked?

Yes – if an employee requests it, overtime can be banked and taken as time off at a later date, in lieu of overtime pay.

However (and this is a big however, and where many organizations don’t meet employment standards), banked time must be accrued at the rate it was earned. That means that any banked overtime (hours in excess of 8 per day, or 40 per week) must be banked at the rate it was earned.

Ex: 1 hour worked of overtime = 1.5 hours of banked time to be taken as time off in lieu of overtime pay.

But what about flexible work arrangements?

If your industry or the nature of some jobs in your organization requires a bit more flexibility with work arrangements, stay tuned for Part 2 of our Time Management Series, where we’ll talk about Averaging Agreements: What they are, when you might need one, and how they work.

Your Engaged Assignment: Set aside ten minutes today to go over your current overtime policy and practices and compare with employment standards FAQs above. Are your overtime practices airtight, or could they use some work to bring them into compliance (while still protecting your organization’s bottom line)?

Not sure if your overtime policy and practice makes the grade? Reach out – you know where to find us!