Overlooking the blurred lines of overtime

Employees have a right to disconnect from work, but not from overtime pay

Overlooking the blurred lines of overtime

“All work and no play makes Jack a dull boy.”

Those chilling words were famously typed countless times by Jack Torrance, the character played by Jack Nicholson in director Stanley Kubrick’s film adaptation of the Stephen King novel The Shining. Torrance was trying to write a book while stuck in the Overlook Hotel for an entire winter as the caretaker – one could call it a really remote work situation where there was no separation between the job and leisure time.

While it’s a work of fiction about extreme – and supernatural – circumstances, it’s a reminder of the importance of recognizing when someone’s been working too much, especially if they haven’t been properly compensated for it.

Employees have been working from home in proportions not seen before, and it looks like may not change much as the pandemic wanes. But while many workers are enjoying a better work-life balance – and avoiding a sometimes-dreaded commute – some are finding that balance to be elusive. Even for employees working in the physical workplace, streamlining and internal reshuffling has put more responsibility and workload on some employees, putting pressure on them to work extra hours to get things done.

Employers need to be aware of the potential pitfalls that may come from that imbalance, both legally and for the workplace.

A survey by LifeWorks found that 28 per cent of Canadians are finding it difficult to disconnect after regular work hours, with the top reasons being having too much work to do during their workday and someone from work – whether their manager or a co-worker – contacting them after work hours. This could spell trouble, as a significant proportion of survey respondents reported feeling mentally or physically exhausted at the end of their workday, while their employers could be exposed to liability under employment standards legislation.

Employment standards legislation requires overtime to be paid to employees who work beyond a specified number of hours, which can vary depending on the jurisdiction but is usually around 44 to 48 hours per week. There are often exceptions to this rule, such as managers and information technology professionals, but most employees are entitled to overtime pay.

This means for all overtime worked, whether approved or not – many employers have requirements for overtime to be pre-approved, but this usually doesn’t affect entitlement. If the hours are worked, the employee should get paid at the appropriate rate.

Employer case studies

About a decade ago (give or take a couple of years), several large, high-profile employers – such as Canadian National Railway (CN), Canadian Imperial Bank of Commerce (CIBC), Scotiabank, and BMO Nesbitt Burns made the news when groups of employees launched class-action lawsuits for unpaid overtime. While some were certified and some weren’t, the suits shone a light on practices where employees were expected to work extra hours without getting paid, or were misclassified as managers when the work they were performing was not managerial.

Given the large number of employees involved, these lawsuits usually involved a lot of money for the employers – for example, back in 2008, KPMG settled its own class-action lawsuit with an overtime redress plan that planned to pay up to $10 million in compensation for unpaid overtime over a seven-year period. The original amount claimed by employees in the suit was $20 million. The lawsuit by CIBC employees sought $600 million – although it wasn’t certified as a class action, the bank remained open to claims from all the individual employees.

It's not just big employers who could be hit by unpaid overtime claims. In fact, smaller employers may have more informal work environments where unpaid overtime could go undetected or simply be allowed to happen. And if the employer doesn’t track those hours, it could be on the hook for paying the employee whatever they claim.

A few years ago, a live-in caregiver in Quebec – who was a foreign worker from the Philippines – was awarded more than $40,000, including more than $11,000 in lost wages, $25,000 in moral damages, and $5,000 in punitive damages. Her contract was for 40 hours per week, but her employer actually had her working about 65 hours per week. She also wasn’t paid for her first two weeks of work while she was learning the job. When the caregiver asked to be paid for the extra hours, the employer threatened to get her work permit revoked.

Employment standards apply to all employees, regardless of the size of the employer, and that includes entitlement to overtime pay. With more employees working from home, it’s easier for them to lose track of time and work longer and after hours. Some jurisdictions are looking at legislating employees’ right to disconnect to ensure that work-life balance doesn’t negatively impact mental health, but the presence or absence of such measures doesn’t change the overtime entitlement.

Overtime is overtime, whether in the workplace or at the home office, and employers should be conscious about not overlooking it. All work and no play increases employee stress and employer liability.

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