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How Does Overtime Work?

Jessica Gibson

Associate
April 26, 2022

The standard workday in British Columbia is 8 hours and the standard workweek is 40 hours. When these hours are exceeded, overtime is generally payable to employees (subject to those exempt from overtime which is discussed below).

It is important to remember that both the number of hours worked in a day and the number of hours worked in a week must be reviewed to calculate an employee’s overtime. For the purpose of calculating overtime, the B.C. Employment Standards Act refers to a week as beginning on Sunday and ending on Saturday. Overtime is given to employees regardless of how they’re paid – hourly, monthly salary, annual salary, or commission earnings.

Daily Overtime

After working a full 8 hour day, an eligible employee must be paid day 1.5 (or time-and-a-half) times their regular rate of pay for any time worked over 8 hours and up to 12 hours in a day. After an employee has worked over 12 hours, the employee must be paid 2 times (or double) their regular rate of pay for all of the hours worked in excess of 12 hours during a day. This rate of pay applies even if the employee works less than 40 hours in a week.

Weekly overtime

An employee who works more than 40 hours in a week must be paid 1.5 times their regular rate of pay for the excess hours. This applies even if an employee didn’t work more than 8 hours in a day. If an employee does work more than 8 hours in a day, only the first 8 hours worked each day are used to calculate total hours for weekly overtime.

Statutory Holidays

If an employee works overtime hours on a statutory holiday, they are paid an average day’s pay plus time-and-a-half for the hours worked. Employees do not also receive overtime pay for the same hours worked.

Banked Overtime

An employee can make a written request to bank their overtime hours instead of being paid during the pay period when they’re earned. If an employee requests that their overtime be banked, they can later on request that:

1. Part or all of the wages in the time bank to be paid out

2. Time off with pay for a period agreed upon by the employer and employee

3. The employer to close the bank and pay out their banked hours entirely – this request must be made in writing

An employer can close a time bank after giving the employee one month’s written notice. Within six months, the employer must do one of the following:

1. Pay the employee all of the overtime wages credited to the time bank

2. Allow the employee to use the credited overtime wages to take time off with pay

3. Pay the employee for part of the wages credited to the time bank and allow the employee to use the remainder of the credited overtime wages to take time off with pay

Overtime during Employee Rest Periods

An employee must have at least 32 hours in a row free from work each week. If an employee works during this period, they must be paid time-and-a-half. If the hours an employee works are also considered overtime, they are only paid time-and-a-half for the hours worked. Employees do not receive overtime pay and premium pay for the same hours worked.

For example, if an employee works every day seven days in a row, they must be paid time-and-a-half for one of the days, even if they worked less than 40 hours in total. Time-and-a-half can be paid for the day with the least number of hours.

Averaging Agreements

Employees under an averaging agreement have different rules for calculating overtime.

An employer and an employee can agree to an average of work hours scheduled over one, two, three or four weeks. Employees can agree to work up to 12 hours in a day, averaging no more than 40 hours per week, without being paid overtime.

In order to be valid, an averaging agreement must:

1. Be in writing;

2. Specify the number of weeks (one to four) over which hours will be averaged;

3. Specify the work schedule for each day covered by the agreement;

4. Specify the number of times the agreement may be repeated;

5. Specify a start date and an end date for the agreement;

6. Be signed by the employer and the employee before the start date; and

7. Be received by the employee before the agreement takes effect.

The averaging agreement does not have to be filed with the Employment Standards Branch.

Overtime with an Averaging Agreement

An employee working under an averaging agreement must be paid 1.5 times their regular rate of pay for hours worked outside of the schedule after 8 hours in a day. For example, if an employee is scheduled for a 10 hour shift and they work 12 hours, they must be paid 1.5 times their regular rate of pay for the extra two hours added to their work schedule for that day.

An employee working under an averaging agreement must be paid 2 times their regular rate of pay if they work more than 12 hours on any given day. The employee is entitled to 1.5 times their regular rate of pay for all hours worked in excess of an average of 40 hours per week over the period covered by the agreement. For example, if an employee is scheduled to work four 10-hour days per week over a four-week period and is asked to come in on another day for 8 hours, the employee must be paid 1.5 times their regular rate of pay for the extra 8 hours worked.

An employee under an averaging agreement qualifies for statutory holiday pay if they have been employed for 30 calendar days and have worked under an averaging agreement within the 30 days before the statutory holiday. If an employee works during their rest period (e.g. due to an emergency), they must be paid overtime. Working through a meal break, however, does not always result in overtime pay.

Employees can make a written request to change their averaging agreement as long as the total hours scheduled in the agreement remain the same.

Variances

Variances allow work situations that follow the purposes of B.C. Employment Standards but don’t strictly meet the standards. Not all changes to work schedules need a variance. Some changes may be made by an averaging agreement.

Applications to vary the standards can be made regarding:

1. The maximum length of a temporary layoff

2. Paydays

3. Special clothing

4. Split shifts

5. Daily hours of work

6. Hours free from work

7. Overtime wages for employees not on a flexible work schedule

8. The number of weeks covered by an averaging agreement

9. Notice and termination pay requirements for group terminations

A variance application is made jointly with the employer and employees. The variance must promote fair treatment of employees and employers and benefit the majority of affected employees.

Exclusions from Overtime Pay

The B.C. Employment Standards Act operates on the premise that employees are entitled to be paid for work performed. However, under Regulation Part 7, Section 44 of the Employment Standards Act, it is recognized that there may be certain circumstances where an employee is not performing the normal functions of their job, through no fault of their own, nor due to circumstances that are under the control of the employer.

While managers can be excluded from overtime as a result of the nature of their positions, the Act also sets out very clear instances when the overtime provisions do not apply:

1. A bus operator: while waiting during the course of a charter trip or excursion, lay-over time, or for any time that the bus operator is not operating a bus if the cause is completely beyond the employer’s control;

2. A truck driver or a truck driver’s swamper or helper: at a location more than 160 km from home, is employed on a truck that has a mechanical breakdown unless the breakdown resulted from the employer’s negligence, or the truck driver, swamper or helper was actively engaged in repairing the truck, or is immobilized due to weather conditions, road blockage, an accident or any other cause completely beyond the employer’s control;

3. A miner employed underground for time spent underground after the miner’s regular shift, if the cause is completely beyond the employer’s control; and

4. A first aid attendant for any time spent accompanying a person being transported to a medical practitioner, hospital or other destination in the course of the attendant’s first aid duties and while returning from the destination to the attendant’s normal place of employment.

For purposes of calculating any overtime entitlement, the calculation will not include any time spent in the situations described in this above section. While overtime rates do not apply, the employee may still be entitled to wages at a regular rate, if the employee is at a place designated by the employer, and available for work. Section 1(2) of the Employment Standards Act that states “an employee is deemed to be at work while on call at a location designated by the employer unless the designated location is the employee’s residence.

It is important to be mindful of overtime requirements as this can be a significant component of an employee’s compensation. If you have any questions related to overtime, reach out to a lawyer with Ascent Employment Law – we’re here to help!