Calculations in Canada depend on federal, provincial, and territorial laws that govern employer
There often comes a time when employees need to stay past their work shift to finish up a task or catch a deadline. During those instances, a request for overtime pay could be brought up and HR leaders should know how to handle overtime pay and all it entails.
Below we discuss everything every employer needs to know about overtime pay.
What are the federal overtime rules in Canada?
In simple terms, overtime is based on the practice that employees will be paid an additional amount of money for the extra hours they work before or after their shift.
Overtime pay in Canada depends on the federal, provincial, and territorial laws that govern the company. Under federal laws, any hours worked outside an employee’s standard hours of work are considered as overtime work and employers are expected to pay for those overtime work.
Under the Canada Labour Code, an employee who has worked overtime is entitled to a pay of at least 1.5 times their regular hourly wage, or paid time off that is equivalent to 1.5 hours of time off for every hour they worked overtime. For example, if an employee rendered three hours of overtime, they are entitled to 4.5 hours of paid time off.
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An employee has every right to refuse to work overtime to focus on family responsibilities concerning the health, care, or education of any of the employee’s family members. However, an employee cannot refuse overtime work if it is necessary.
What are the provincial and territorial overtime rules in Canada?
Each province and territory also has its own laws regarding overtime pay in their area. Listed below are the basic laws governing provincial and territorial overtime pay:
Alberta: Under Alberta’s Employment Standards Code, overtime pay rate is 1.5 times an employee’s regular pay rate. Alberta employees qualify for overtime pay after working more than eight hours in a day or more than 44 hours in a week.
British Columbia: Under British Columbia’s Employment Standards Act, overtime pay rate is 1.5 times for any time worked over eight hours in a day, up to 12 hours. This applies even if the employee does not work more than 40 hours in a week. Employees are paid double time for any time worked over 12 hours in a day.
Manitoba: Under Manitoba’s Employment Standards Code, overtime pay rate is 1.5 times an employee’s regular pay rate for each hour worked outside their shift. Manitoba employees qualify for overtime pay after working more than eight hours in a day or more than 40 hours in a week.
New Brunswick: Under New Brunswick’s Employment Standards Act, overtime pay rate is 1.5 times the minimum wage. As of April 1, 2022, the minimum wage is at $19.13 per hour and by Oct. 1, 2022, the rate will change to $20.63 per hour.
Newfoundland and Labrador: According to Newfoundland and Labrador’s Labour Standards Act, the overtime rate pay is 1.5 times the minimum wage. The minimum wage is at $13.20 per hours since April 1, 2022. Employees in Newfoundland and Labrador are entitled to overtime pay after 40 hours of work in a week.
Nova Scotia: According to Nova Scotia’s Labour Standards Code, employees are entitled to 1.5 times their regular wage for each hour worked. They are entitled to overtime pay after working for 48 hours in a week.
Ontario: Ontario’s Employment Standards Act ensures employers pay employees 1.5 times their regular rate of pay for each hour worked over 44 hours in a week. The overtime pay agreement could change based on the employment agreement between the employer and employee. It could change through a written agreement approved by the Director of Employment Standards.
Prince Edward Island: Under Prince Edward Island’s Employment Standards Act, an employee is entitled to 1.5 times their hourly wage rate for every overtime hour they worked. The overtime pay only applies after the employee has worked for 48 hours in a week.
Quebec: According to Quebec’s Act respecting labour standards, overtime pay employers owe employees is 1.5 times the employee’s regular rate of pay. An employee is entitled to overtime pay after they have worked for 40 hours in a week.
Saskatchewan: Under the Saskatchewan Employment Act, overtime pay is calculated at 1.5 times the employee’s regular rate of pay. The employee is entitled to overtime pay when they have worked more than eight hours in a day, or 10 hours in a day if they work for only four days.
Northwest Territories: Northwest Territories’ Employment Standards Act ensures employees are paid no less than 1.5 times their regular pay rate for the hours worked after working for more than eight hours per day or 40 hours in a week.
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Nunavut: The Nunavut Labour Standards Act states overtime pay rate in the territory is 1.5 times the employee’s regular wage rate. Overtime pay is offered to employees who have worked more than eight hours in a day or 40 hours in a week.
Yukon: Yukon’s Employment Standards Act makes sure employees who work overtime past eight hours in a day or 40 hours in a week, shall receive 1.5 times their hourly pay rate for every overtime hour they worked.
In summary, overtime pay is mandatory in all provinces and territories in Canada so long as the circumstances fit in the federal and specific local employment laws governing overtime pay. Although most employees are entitled to receive overtime pay, there are some exceptions depending on the occupation and industry.
What it means for HR leaders
HR leaders need to step up and take action when it comes to overtime pay. It is ideal for both employers and employees to avoid having to work additional hours outside of their scheduled shift. However, it cannot be avoided for long and there will be instances that overtime may be needed.
During those instances, HR leaders should be ready in handling overtime legally and properly calculating overtime pay. They should stay updated with any changes to legislation and be transparent to the workforce with how the changes would affect their employment.
It is also important to keep everything in writing. Having a written document stating both the employer and employee agreeing to specific employment policies and conditions help keep record of all agreements and movements within the company. It also helps in future research that would aid the company in improving their operations.
