The document discusses overtime pay requirements under Ontario employment law. It covers statutory requirements, common myths, and distinctions between exempt and non-exempt employees. Recent case law establishes that merely having supervisory or managerial duties is not enough to qualify for exemption; the tasks must be primarily of that character. Upcoming Bill 146 proposes increasing the limitation period for unpaid wage claims and requiring employers to complete audits of their compliance upon notice.

1. Hours of Work and Overtime:
The “Elephant” in the Room
Agenda
1. OVERVIEW OF STATUTORY REQUIREMENTS
2. MYTHS & MISCONCEPTIONS
3. EXEMPT v. NON-EXEMPT – DISTINCTION
WITHOUT A DIFFERENCE?
4. CASE LAW UPDATE: SUING FOR OVERTIME PAY
5. LOOKING AHEAD – BILL 146
Chuck Tahirali,
Senior Human Resources Consultant

2. Employment Standards Act, 2000
• Overtime pay = time-and-a-half (1.5x)
employee’s regular rate of pay.
• Definition of “regular rate” varies depending
on whether paid by the hour.
• For most categories of employee, overtime
pay after 44 hours worked in a week.
• Other thresholds may apply.

3. Employment Standards Act, 2000
• If employer adopts lower threshold (<44hrs), lower
threshold becomes employment standard.
• Permissible to use “lieu time” compensation if
certain requirements met:
– Same 1.5x calculation
– Written agreement of affected employee
– Paid time off given within 3 months (or 12 months with
affected employee’s written agreement)

4. Averaging Methodology
• Hours of work averaged over period of 2 or
more consecutive weeks for purpose of
determining entitlement to overtime pay.
• Requires an explicit written averaging
agreement with affected employee.
• Requires receipt of “Approval” from Ministry
of Labour.

5. Averaging Methodology
• Terms of Ministry Approvals
– Approval must be posted in workplace
• Terms of written averaging agreements with
employees
– Expiry date (2 years)
– Irrevocable prior to expiry date unless parties
agree

6. Limits on Hours of Work
• Daily maximum (8 hours or number of hours in
regular workday)
• Weekly maximum (48 hours)
• Limits may be exceeded if:
– Written agreement of employee
– Approval from Ministry of Labour (and posted in the
workplace)
– Most approvals provide for up to 60 hours/week

7. “Excess Hours” Agreements
• Non-Union employees: Agreement only valid
if Ministry “fact sheet” provided and written
agreement contains term confirming receipt.
• Revocable by employee giving 2 weeks of
written notice.

8. Record-Keeping Requirements
• Averaging agreements and excess hours
agreement must be retained for at least 3
years after day on which work last performed
under terms of agreement.
• Number of hours an employee works in each
day and in each week must be recorded.

9. Employees paid a “salary”
• No requirement to record number of hours worked
in each day and in each week if employee paid a
“salary” if:
– Employee is “exempt” from hours of work and overtime
pay provisions of ESA; or
– Number of hours worked in excess of daily and weekly
limits are recorded.
• “Salary” = fixed amount for each pay period +
amount actually paid does not vary unless more than
44 hours worked in a week.

10. Myths and Misconceptions
• Salaried employees are exempt
• Office or “white collar” jobs are exempt
• Salary includes a certain amount of overtime
hours
• Salary includes overtime pay
• Policy requiring pre-approval of overtime is
effective means of limiting liability

11. “Hours of Work”
• Work is deemed to be performed if in fact it is
performed by an employee even though a
contract or policy expressly forbids or limits
hours of work;
or
• Requires the employer to authorize the hours
of work in advance, i.e., before they are
worked.

12. “Hours of Work”
• Work is deemed to be performed if it is
permitted or “suffered” to be done by the
employer.
• Meal breaks excluded if no expectation of
work.
• Other rest times or breaks included as hours
worked if required to remain at the
workplace.

13. “Hours of Work”
• Daily commute to/from work?
• Travel time – conferences, meetings, flights
• Blackberry time?
• Voluntarily working late?
• Taking work home on the weekend?

14. “Exempt” v. “Non-Exempt”
• Very few categories of employee exempt from
coverage under ESA.
• Exemptions vary from Part to Part.
• Hours of work / Overtime exemptions:
– Commissioned salesperson
– Information technology professional
– Managerial/Supervisory

15. Managerial/Supervisory Exemption
• A person whose work is supervisory or
managerial in character and who may perform
non-supervisory or non-managerial tasks on
an irregular or exceptional basis.
• How courts interpret this exemption.
• How Ontario Labour Relations Board
interprets this exemption.

16. Case Law
• Tsakiris v. Deloitte & Touche (2013)
• Glendale Golf & Country Club (2010)
• Being “managerial” or “supervisory” in
character not enough
• Meaning of “irregular” and “exceptional”

17. If an “exempt” employee:
• Performs non-exempt work (e.g., non-
supervisory or non-managerial tasks) in a
particular work week, in addition to his/her
regular exempted duties;
• Then the employee is entitled to overtime pay
for any overtime hours worked unless the
time spent by the employee performing the
exempt work was less than one-half of the
total time worked that week.

18. Update: Class Action Lawsuits
• “Misclassification” lawsuits
• “Off-the-clock” lawsuits
• Canada Labour Code v. Ontario ESA
• Better benefit defence
• Ontario Court of Appeal “Trilogy”
• Recent developments in Ontario

19. BILL 146
• If passed:
– Removes the $10,000 ceiling on recovery of unpaid wages,
including overtime pay;
– Increases the time limit for a claim for wages from 6
months (12 months for recurring violations) to 2 years;
– Directs an employer to complete an ESA compliance audit
of their records and practices to determine ESA
compliance. Employment standards officer would be able
to require the audit by providing the employer with
written notice.

20. BILL 146
• If passed:
– Introduces ‘joint and several liability’ between
temporary help agencies and their client
employers for unpaid wages (including overtime
pay).
– Requires both the client employers and temporary
help agencies to keep records of hours of work.