Overtime

 

Many start-ups are faced with the necessity to have employees work overtime at certain times. There is often a lot of work to do and not enough resources.

The use of overtime can be an effective way to handle short-term increases in workload. However, the ongoing use of overtime may have a long-term negative impact on employee health and morale. It may also increase the company’s expenses, such as salaries and overhead, thereby reducing the company’s profits. If you find that there is a constant need for overtime, then you should consider your options for reducing your reliance on overtime, such as hiring additional staff, using temporary staff, and outsourcing.

The Employment Standards Act

The Ontario Employment Standards Act has established very specific requirements that relate to the application of overtime. Make sure that you understand your responsibilities as an employer. You need to be clear about who qualifies for payment of overtime and who is exempt.

For full-time, part-time and casual employees who qualify:

• Overtime is generally payable after the employee has worked 44 hours in a work week—in some jobs, this threshold is higher.
• Overtime is set at a bare minimum of one and one-half (1.5) times the employee’s regular hourly wage (see Compensation). Alternatively, overtime pay may be taken as 1.5 hours of paid time off for each hour of overtime worked—both the employee and employer must agree to this alternative in writing.
• If overtime is taken as paid time off, the employee must take the time off no later than three months after the week in which overtime occurred. Alternatively, if the employee agrees in writing, he or she may extend this period and take the time off within 12 months of the week in which overtime occurred.
• Overtime is not calculated on a daily basis. It may be calculated either on a weekly basis or over a longer period under an averaging agreement. 

Note: The information above provides a summary only. It is not intended to be an exhaustive discussion of overtime requirements pursuant to applicable law and should not be taken as legal advice. Readers should review the full text of the Employment Standards Act and seek legal advice for more detail. If you are outside of Ontario, consult applicable employment standards legislation and seek legal advice with respect to your jurisdiction.

 

References

Your Guide to the Employment Standards Act, 2000. (n.d.). Retrieved March 3, 2009 from Ministry of Labour website, http://www.labour.gov.on.ca/english/es/guide.

Tags: compensation