Did you know that many salaried employees are entitled to overtime pay? Unless your employees do certain kinds of work (high-tech, forestry, transportation, commission-based, and others), your non-supervisory salaried employees are entitled to overtime pay. This means you need to keep a close eye on the hours your salaried employees are working, and when they work more than eight hours in a day, pay them on the overtime rates stated in the Employment Standards Act.
Your salaried employees are entitled to overtime pay even if they have agreed not to receive it. It is not lawful to enter into a contract that defeats the requirements of the Act. So if you have an employment contract that states the salaried employee will not be entitled to overtime pay, that particular term is probably useless.
What can you do to meet this obligation? You could implement a time tracking system for when your employees start work, take breaks, come back from breaks, and end work. Calculate how many hours per day the employee works (for days longer than five hours, the employee is entitled to a 30-minute unpaid break – make sure to account for this). On the next pay day, add overtime pay at 1.5x your employee’s usual hourly rate. This is commonly done in retail and industrial settings where employees work on shifts and are used to “punching in”. In an office environment this system can get onerous.
The easier way to meet this obligation is to ensure each employee works no more than eight hours per day. Specify their start and end times in the employment contract. Make sure they take their lunch break, and make sure they leave on time. Specify in a policy that if the employee thinks they have to work overtime, they must first seek authorization from their manager. This way you’re in control of how many overtime hours your employees work and get paid.
The Employment Standards Branch is the arbiter of unpaid overtime disputes. Its mandate is to protect employees, and it is very employee-friendly. Although you should not be afraid to defend yourself in the ESB in the case of principled disputes, the process is frustrating and employers would be wise to avoid it. If your employee has been working overtime for you and is demanding payment, often the best solution is to settle that matter without acrimony and implement new policies that minimize the amount of overtime your employees work. Keep in mind that you may not retaliate against an employee who complains to the ESB while working for you (that’s a topic for another post).
Please give us a call if you have further questions about overtime pay and how to manage this obligation.