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Overtime and Employee Rights

Richard B. Johnson

Co-Founder + Partner
September 20, 2021

Overtime pay policies help to ensure employees have adequate time off and manageable workloads, while providing a balance for situations where employees are required to work beyond normal hours as set out in the Employment Standards Act

As an employee, you want to make sure you’re being paid fairly (and, frankly, it makes business sense for employers to ensure that employees feel fairly compensated as well).

Understanding your overtime entitlements is an important step in negotiating pay and avoiding being taken advantage of by employers.

General Overtime Rules

In BC, the Employment Standards Act defines a “normal” work week as 40 hours, divided into 5 8-hour days. Any time worked beyond 8 hours in a single day, and (not or) beyond 40 hours in a single week is overtime. 

Employees are entitled to be paid time and a half for any work beyond 8 hours in a single day. If you work over 12 hours in a single day, you are entitled to double time. This daily overtime allowance applies regardless of the total number of hours that the employee works during the week. 

For example, let’s say an employee that normally makes $20 an hour works 13 hours in one day. That employee will be paid $20 per hour for the first 8 hours. For the next 4 hours, they’re paid $30 per hour. And for the final hour, they’re paid $40. 

The employee’s total pay for the day can be calculated like so: 

(20 x 8) + (30 x 4) + (40 x 1) =  $320

Additionally, an employee is entitled to time and a half pay for any hours beyond 40 worked in a single week. This is regardless of how many hours the employee worked on any given day of the week. If the employee works 8 hours a day on Monday through Friday, then 4 hours on Saturday, all the Saturday hours are paid out at time and a half.

It’s also important to note that by law, BC employees must have at least 32 consecutive hours off work each week (except in the case of an emergency that requires them to be at work). Any hours that cut into this 32-hour block of time are considered overtime and must be paid out at time and a half. 

Who is Entitled to Overtime?

Most employees are entitled to overtime, whether they are full-time, part-time, temporary, or casual. There are a handful of industries, or industry-specific situations, where overtime does not apply. 

Who is Not Entitled to Overtime?

Managers are not entitled to overtime pay. Employment Standards defines a “manager” as someone whose primary responsibilities include training and overseeing employees, scheduling employees, approving time off, or allocating company resources. The determination of who is and is not a manager is not based on job title or pay — ergo, just because your job title contains the word “manager” does not necessarily mean your employer can deny you overtime.

Contractors are not entitled to overtime pay under BC employment law.

People employed at high technology companies may not be entitled to overtime. Under Part 7 of the Employment Standards Act, high technology professionals working at high technology companies are excluded from the provincial regulations around hours of work and overtime (examples of this type of professional can include engineers, scientists, and software developers). However, employees of high technology companies who are not themselves high technology professionals are still entitled to overtime, and high technology professionals can still work out averaging agreements with their employers.

Averaging Agreements

Employees and employers can work out an agreement in which overtime is waived despite employees working more than 8 hours a day or 40 hours a week, because the average number of hours worked per week, across the agreement period, is still 40. This is called an averaging agreement.

Averaging agreements must be made for a set period of time (between 1 and 4 weeks), but they may be repeated as many times as needed. A common example of a 1-week averaging agreement is a work schedule where employees work 10 hours a day from Monday through Thursday, and have Friday, Saturday, and Sunday off.

For an averaging agreement to be valid in the eyes of the ESA, the employer must provide a written document detailing the exact parameters of the agreement. This document must also be signed by both the employer and the affected employees. An averaging agreement like the one above could be identified in an employment agreement that is renewed annually.

Averaging agreements are often helpful for workers in industries with seasonal ups and downs, where an employer can generally predict periods where employees will need to put in extra hours. They may not work as well in scenarios where work is unpredictable, and employees are often on-call.

Variances

Variances are an option for employers and employees to implement alternative working schedules that don’t necessarily fit the letter of the Employment Standards Act (“ESA”), but that fit the spirit of the law. A variance is a relaxation or change to the requirements of the ESA. In the context of overtime, a variance may involve changes to the overtime rules regarding hours and payment structure set out in section 40 of the ESA, and variances only come into play when the desired change in scheduling wouldn’t be reasonably covered by an averaging agreement. As such, variances are rarely put into practice.

Variances can, however, be applied to averaging agreements, for example to change the number of weeks that an averaging agreement is spread across. One thing to keep in mind about variances is that they can easily be used by unscrupulous employers to avoid justly paying overtime to their employees — to mitigate this, the ESA requires that any variance application include written support from any affected employees, and before approving a variance, the ESA will audit affected employees to confirm that their support is genuine. 

An example where a variance might be helpful is a situation where a company has work on an unpredictable, day-by-day basis — some days, employees might have to work up to 12 hours to meet demand, but other days there might be no work at all. In this case, an averaging agreement can’t be made, because the company can’t be certain what the employees’ schedule will be like weeks in advance. A variance might be beneficial to employers because it allows them to pay their employees a fixed salary without having to calculate overtime whenever there’s a lot of work. Employees can benefit from a variance like this because they only have to work when needed, but they can still have stable income. 

Even in cases where there is a clear benefit to both sides, it’s uncommon for variances to be approved. Though many employers and employees recognize the value of schedule flexibility, and though variances can be helpful in accommodating that flexibility on a long-term basis, the ESA generally tries to uphold an 8-hour day, 40-hour week structure as much as possible. Only time will tell whether increasing adoption of flexible work schedules will eventually push the ESA to approve more variances.

Overtime is an important protection for employees, and the ESA enforces overtime to ensure that employees are being paid fairly for their work. Unless you have signed an averaging or variance agreement, or are working in a job or industry that is specifically excluded, you are entitled to overtime for any hours worked in a day beyond 8, or in a week beyond 40. If you know that you are owed overtime that hasn’t been paid to you, bring your concerns to your employer first. If needed, you can submit a claim through the Employment Standards website.