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Are you vulnerable to an overtime claim?

Helpful tips to avoid such claims

By Stuart Rudner

Many companies are unwittingly exposing themselves to overtime claims through sloppy practices and misinformation regarding employment standards. It is not uncommon to find long-term employees coming to HR with claims for hundreds, or thousands, of overtime pay. Or, after letting someone go, they face not only a claim for wrongful dismissal, but also substantial damages for overtime worked over years of employment.

Employment standards legislation generally requires that employers keep detailed records of employees' hours of work. The reality, however, is many don't — especially for white collar workers. As a result, when an employee produces "logs" of hours worked dating back several years, the employer has no documentation to refute it. In such a case, a ministry inspector or court may have little choice but to find in favour of the employee.

So tip one is keep time logs for every employee. While it may be an annoyance, it's as easy as having staff complete or confirm a log each week. If they do, it will be harder for them to allege they have worked hundreds of unclaimed hours in the past.

Overtime issues have been in the news lately, spurred by a few high-profile class action claims. In many  cases, employees are claiming they are entitled to overtime because they read and responded to email messages after-hours. The fact that many employers give out Blackberrys and other smartphones like candy doesn't help. Employees have argued there was an expectation, explicit or implicit, that they check their email in the evenings and weekends. I briefly mentioned this issue in a previous post.

In order to avoid such claims, employers should:

•consider who actually needs to be provided with smartphones

•establish clear policies setting out which types of employees are expected to check and respond to email after hours

•establish clear policies for the balance of the workforce prohibiting them from checking and responding to email after hours

•ensure the practices are consistent with these policies, so employees cannot allege that despite what the policy said, their immediate supervisors sent emails to them in the evenings and expected responses.
While the use of the term "prohibiting" in the third item above may be surprising , it is consistent with the law, which requires that employees are to be compensated for all overtime, even if it was not pre-approved. As a result, not only should employers make it clear employees are not to work overtime without approval, they should treat unauthorized overtime as a breach of policy and discipline the employee in question.

This should dissuade them from future unauthorized overtime. However, they will be entitled to overtime pay for the overtime they worked.

In a previous post, I discussed some common misconceptions relating to overtime, and I encourage readers to review this and avoid those mistakes. I also encourage employers to take advantage of the ways in which employment standards legislation allows them some flexibility with respect to having employees work overtime.

For example, if you have employees whodon't work set hours and may have substantially different hours of work from week to week, consider an averaging agreement. To demonstrate how this can be used, imagine an employee who works 30 hours one week and 50 the next. By default, she would be entitled to nine hours of overtime pay in the second week (six hours at time-and-a-half). However, if the parties had agreed to average time over two weeks, the employer would not have to pay for any overtime.

As a final comment, employers (and employees) should take the time to understand their rights and obligations. Don't assume anyone with "manager" in his title or anyone paid by salary is exempt from overtime eligibility. And ensure any "agreement" for employees to receive time off in lieu of overtime pay is documented and complies with the applicable legislation.

Finally, consider whether routinely emailing your staff on evenings and weekends will create an expectation that results in liability for overtime pay.

Stuart Rudner is a leading HR lawyer and a partner in the Labour & Employment Law Group at Miller Thomson LLP, a national law firm. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at (416) 595-8672 or srudner@millerthomson.com. You can also follow him on Twitter @CanadianHRLaw and join his Canadian HR Law Group on LinkedIn.

Stuart Rudner

Stuart Rudner, Employment Lawyer and MediatorStuart Rudner is the founder of Rudner Law (RudnerLaw.ca), a firm specializing in Employment Law and Mediation. He can be reached at stuart@rudnerlaw.ca, (416) 864-8500 or (905) 209-6999, and you can follow on Twitter @RudnerLaw.
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