Overtime averaging and exemptions

Question: A recently terminated manager said British Columbia Employment Standards informed him he is entitled to overtime pay as there was no written agreement averaging hours worked. Aren’t managers excluded from overtime entitlements? Can he claim overtime now only after he has been terminated? Should we implement an averaging agreement for management positions?

Answer: Employment standards legislation sets out maximum hours of work on a daily or weekly basis. Once those thresholds have been reached, employers will be required to pay overtime, or provide time off in lieu, typically at the rate of 1.5 times the regular wages. The specific details with respect to the hours thresholds and other aspects differ slightly from province to province.

Typically, managers and supervisors are excluded from some portions of the employment standards legislation, including those dealing with hours of work and overtime. However, one of the issues that frequently arises is how to determine whether someone is truly a manager or supervisor. In British Columbia, a manager is defined as “a person whose principal employment responsibilities consist of supervising or directing, or both supervising and directing, human or other resources, or a person employed in an executive capacity.”

Employment standards boards and courts will consider the nature of an individual’s duties, as opposed to her official title, in order to determine whether she is truly employed in a supervisory or managerial capacity. According to the British Columbia Ministry of Labour’s website, the Employment Standards Branch will consider:

•How much can the individual, on her own or otherwise, materially and substantially affect the employment conditions of those for whose work they are held responsible by the organization?

•What kind of responsibilities she has with regard to company resources, even if there are certain checks on her authority?

B.C. Employment Standards says managers will typically have the ability to act independently and make decisions using their own discretion, and they provide the following examples:

•Ensuring company policies are followed.

•Authorizing overtime, time off or leaves of absence.

•Calling employees in to work.

•Altering work processes.

•Establishing or altering work schedules.

•Training employees.

•Committing or authorizing the use of company resources.

•Managing a budget.

This is a partial list of criteria, but not exhaustive. As stated above, an individual’s title, as well as her form of payment — salary as opposed to hourly — will not be determinative. It is the true nature of the job duties that matters.

Many employers make the mistake of assuming anyone paid by salary is not entitled to overtime, or anyone who is called a “manager” or “supervisor” is similarly disentitled. As set out above, employment standards branches and courts will look beyond titles and formalities in order to assess the reality of any particular employment relationship.

This is becoming more of an issue with the proliferation of Blackberrys and similar devices. Some employees have started to seek overtime pay as a result of the perceived expectation they be available to answer e-mail messages outside of regular working hours. Organizations should be careful with respect to who they provide such equipment to, and set out clear policies on the expectations for employees.