Overtime risks and misconceptions

Can an employer force people to work overtime? If employees work unpaid overtime without authorization, do they have to be paid?

Stuart Rudner

By Stuart Rudner

My daily interactions with HR professionals, in-house counsel and small business owners, as well as my recent review of the final exams submitted in the HR Law for HR Professionals course held by Osgoode Professional Development, revealed many misconceptions regarding overtime. I will address some of these below.

Overtime is not mandatory

An employer cannot force an employee to work overtime, except in the rarest of circumstances. Of course, employees can agree to work overtime.

Overtime does not have to be authorized in order to be compensable

If an employee legitimately works overtime, they are entitled to the appropriate pay or time off in lieu thereof. An employer cannot take the position the overtime was not authorized and refuse to pay for it. However, it’s advisable to put a policy in place stating all overtime must be authorized. While the employer cannot refuse to pay for unauthorized overtime, it can discipline the employee for breaching that policy. Discipline can include dismissal in appropriate circumstances. This should discourage employees from working overtime without obtaining prior approval.

Check exemptions carefully

By default, all employees are entitled to overtime pay or time off in lieu thereof. However, certain categories of workers are exempt. Contrary to popular opinion, this has nothing to do with how an individual is paid.

Salaried employees are just as entitled to overtime pay as those paid by the hour. The exemptions are based upon job duties, with the most common being that of managers or supervisors. The title doesn’t matter — it’s the true nature of the individual’s duties and, if it’s not truly a managerial or supervisory position, then the worker will be entitled to overtime pay.

This can be the case where a portion of the employee’s duties are non‑managerial or supervisory.

Checking and responding to e-mails counts as overtime

Lately, organizations have been giving out BlackBerrys and similar devices like candy, without much consideration for whether the particular employee needs to have such a device.

The result is, often, employees feel they are expected to check and respond to e‑mails when off duty. Such time can certainly count as hours of work, and therefore toward entitlement to overtime pay. Organizations should have specific policies in place regarding when employees are expected to check and respond to e‑mail and, conversely, when they should not be doing so. For those that do not need to check email while off-duty, a clear policy prohibiting them from doing so can and generally should be implemented.

Obviously, these policies will vary depending upon the nature of the position. However, such a policy can be used to refute the allegation employees were expected to work while off duty. That said, if the practice is inconsistent with the policy, then the policy will be ineffective.

In addition to the issues addressed above, many organizations do not appreciate the availability of averaging agreements. These agreements allow the employer to average a specific employee’s hours of work over a period of several weeks for purposes of calculating eligibility for overtime pay. This is effective where an employee has hours of work that vary significantly from week to week. By way of example, by default, if an employee in Ontario worked 48 hours one week and 30 the next, then they would be entitled to four hours of overtime in the first week. However, if there was an averaging agreement in place, then the average hours of work would be 37, and no overtime would be payable. It is important to note such agreements are entirely voluntary.

In light of well-publicized overtime class actions in recent years, and the many misconceptions that seem to exist, organizations are well advised to review their policies and procedures with respect to overtime and overtime pay in order to ensure that they are both compliant with applicable laws and strategic in terms of minimizing their obligations.

Stuart Rudner is a partner with Miller Thomson LLP in Ontario, specializing in employment law. 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 (905) 415-6767 or srudner@millerthomson.com. You can also follow him on Twitter @CanadianHRLaw, join his Canadian Employment Law Group on LinkedIn, and connect with him on Google+.

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