Smartphones, emails and overtime pay
Not knowing the rules around compensation could result in significant liability for employers
Jun 8, 2015
By Stuart Rudner
In recent years, we have seen a few high-profile class-action claims for unpaid overtime. On a smaller scale, my colleagues in the employment law bar and I seem to be addressing issues of unpaid overtime on a weekly basis. It is becoming increasingly common for individuals to complain they are forced or expected to work extra hours without compensation, often due to the fact they are provided with a smartphone by their employer and then explicitly or implicitly expected to check and respond to email messages while off-duty.
This, combined with the fact most businesses do not like to employ the use of time clocks or other mechanisms to track an individual’s time at work, are creating a situation that is ripe for abuse on both sides; many employees feel pressured to work extra hours without asking for compensation, and many employers are the subject of overtime claims when they have no records or documentation to defend themselves with.
I will start by getting a common misconception out of the way: While some employees are exempt from the entitlement to overtime pay, it has nothing to do with whether they are paid by salary or by the hour. Just because someone is paid by annual salary does not mean they can be required to work extra hours without compensation.
Employment standards legislation does provide exemptions from the requirement of overtime pay based upon the nature of an individual's duties, however, the most common exemption is for those who are in a managerial or supervisory position, though there are others as well. Our courts and tribunals will look beyond the title an individual holds and examine their duties in order to ensure they truly fall within the exemption claimed. As a result, giving someone a managerial or supervisory title simply to avoid overtime is not a good plan.
The issue of the widespread use of smartphones and the corresponding expectation individuals check their email away from work has been canvassed in other blog posts (here and here). The bottom line is that doing so counts in the calculation of the individual's hours of work and unless she is exempt from the requirement of overtime pay, this may result in a significant liability to the employer.
Because of this, we have worked with many employers to develop policies that explicitly preclude non-managerial or supervisory employees from using their work email after hours. Of course, any policy is only as strong as the corresponding practice and employers must be prepared to ensure there is no implicit expectation individuals will check their email, despite the policy wording.
There is a widespread perception that time clocks and other mechanisms to track employee's hours are somehow demeaning and should only be used in certain workplaces. As a result, many employers refuse to put them in place. Unfortunately, this often means the employer has absolutely no record of the actual hours worked by an employee. In recent years, and particularly when the overtime class actions were in the headlines, many employees chose to make allegations they had been forced to work overtime without compensation for months or years. Typically, this would arise after the individual's employment had been terminated, and they combined the claim for unpaid overtime with their wrongful dismissal claim.
In many cases, the individual would have handwritten or other informal records of their hours, and the employer would have nothing. As a result, the employer had unwittingly exposed itself to liability for overtime pay.
Sometimes, these allegations of unpaid overtime were quite legitimate. Unfortunately, there are some workplaces where vulnerable employees are taken advantage of and forced to work extra hours or risk losing their jobs. That being said, some of these claims for unpaid overtime are completely bogus, but nevertheless can result in liability on the part of the employer if it has no evidence with which to defend itself.
Tips for employers
•Do not provide everyone with external access to their email; consider who really needs it and what the impact will be on compensation.
•Have a clear policy with respect to expectations while off-duty; this policy will likely have to be different for different types of employees.
•If there is any question at all about the hours some employees work, have a system in place to track the time they work; this can include having employees submit weekly time sheets to you.
•Do not allow people to work overtime because “they don’t mind” and then assume you will not have to pay for it.
Tips for employees
•Know your rights: Overtime cannot be forced upon you in most circumstances and must be compensated in accordance with employment standards legislation.
•Do not give up your rights without understanding the consequences: excess hours’ agreements and averaging agreements may make sense in your situation, but you should not agree to them without understanding what they mean.
•If you are required to work extra hours, keep a detailed log.
•If you are provided with a smartphone or other access to work email, clarify the expectations.
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Stuart Rudner is a founding partner of Rudner MacDonald LLP in Toronto. Follow him on Twitter @CanadianHRLaw
. He can be reached at email@example.com