2018-11-13 14:08:52PayrollEnglishEnsure you're paying employees fairly, discover the various rules around paying overtime wages in Canada, based on each province and...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/01/payroll.jpghttps://quickbooks.intuit.com/ca/resources/payroll/rules-of-overtime-in-canada/Rules of Overtime in Canada By Province

Rules of Overtime in Canada By Province

6 min read

Understanding overtime in Canada ensures you’re paying employees fairly when they work more hours than the normal work period. In most Canadian provinces, the overtime rate is 1.5 times the employee’s standard compensation, and it’s typically paid after an employee works more than eight hours per day or 40 hours per week. There are quite a few exceptions based on location, position, and payment structure. Learning and following the specific overtime rules in Canada based on region prevents your business from being penalized, and keeps you and your team on the same page.

Overtime Alberta Guidelines

Alberta requires that you pay overtime after 44 hours worked in a week, rather than the typical 40. Alberta does abide by the eight-hour workday rule, so any additional time after eight hours must be compensated by 1.5 times the employee’s normal pay. If employees are paid partly or entirely through commission, or if they work a compressed work week, special rules may apply on a case-by-case basis.

Alberta also has a rule that states employees can take time off instead of receiving overtime pay, but a written agreement must be formed between the employer and employee. For example, if someone worked an extra eight hours in a week, they may be able to request a day off the following week and forego their overtime compensation. This structure can be useful if an employee has an approaching obligation but is not able to get the day off through traditional means.

British Columbia Overtime

B.C. overtime laws follow the typical overtime in Canada structure of 1.5 times the standard pay for more than 40 hours worked per week. But the daily structure is unique in both hours worked and compensation given. British Columbia still follows the same eight-hour workday, but employees receive the standard 1.5 times their standard pay only for the first four extra hours. After working for 12 hours, each additional hour is paid double the employee’s standard wages. For instance, if an employee worked for 13 hours they would receive 1.5 times their base pay for four hours, as well as an additional double their base pay for one hour worked past 12 hours.

Overtime terms may vary if the employer and employee enter into an averaging agreement. An averaging agreement is when hours worked are calculated by finding the average of one, two, three, or four weeks. For example, an employee may work four 10-hour shifts per week, rather than the traditional five eight-hour shifts. They’re still working 40 hours per week, but they wouldn’t be paid overtime for the extra two hours worked. Or an employee may work 20 hours in one week and then 60 the next. They’re still working 80 hours total over a two-week period, so they’re working an average of 40 hours per week.

Using the example of the employee who works four 10-hour shifts weekly, if the employee worked an extra 10-hour shift during the week, they would be compensated 1.5 times their usual pay for that additional 10 hours. But if the employee worked 13 hours in a single day, they would receive time-and-a-half for the first two hours worked past their typical 10 hours, as well as double their pay for the additional single hour worked after 12 hours.

Just like overtime Alberta rules, workers in British Columbia may also substitute time off for overtime pay, as long as the employer and employee establish a written agreement.

Overtime in Manitoba

Manitoba follows the traditional 40-hour work week and eight-hour workday that’s most customary when determining overtime in Canada, and overtime compensation is the typical time-and-a-half. Working overtime is voluntary, so employees in Manitoba are never required to work more than eight hours daily or 40 hours weekly. Additionally, overtime hours can be used as time off, as long as they’re used within three months of when they were earned.

Employees who work on commission in Manitoba calculate overtime pay based on their average wage rate. If an employee earned $1,000 and worked 50 hours in a week; divide $1,000 by 50, so the average wage rate is $20. The overtime rate would be $20 multiplied by 1.5, which is $30. The employee would be compensated $30 per hour for the additional 10 hours, which amounts to an additional $300 on their paycheque.

New Brunswick Overtime

In New Brunswick, the overtime rate is based on the current minimum wage multiplied by 1.5. Employees who are already compensated more than the overtime rate don’t qualify for overtime compensation. Employees who do qualify for overtime only receive it after working for more than 44 hours in a week. Additionally, certain occupations may have different overtime requirements, or they may not be eligible. Examples include some government and construction workers, as well as camp counselors and program staff.

Overtime in Newfoundland and Labrador

Like New Brunswick, the overtime rate in Newfoundland and Labrador is based on multiplying the current minimum wage by 1.5. Overtime is only granted when employees work more than 40 hours in a week. But if an employee switches shifts with another employee, resulting in more than 40 hours worked, overtime doesn’t apply. As long as the employer agrees, employees can store their overtime hours and use them for time off.

Nova Scotia Overtime Rules

In Nova Scotia, overtime rules vary depending on the profession. Most employees receive 1.5 times their base pay after working more than 48 hours in a week. Some industries such as oil, gas, and fisheries base the overtime rate on minimum wage, rather than base pay. In those situations, the 48-hour workweek still applies. Some professions such as landscapers and sawmill workers are compensated if they work more than 110 hours over the course of two weeks.

Overtime Laws in Ontario

Ontario employees are paid 1.5 times their base pay if they work more than 44 hours in a week. Like British Columbia, averaging agreements may affect how overtime is paid. And like Manitoba, employees who work on commission or perform piecework calculate overtime rate by using their average wage rate.

Prince Edward Island Overtime

Most employees in Prince Edward Island are paid time-and-a-half after working 48 hours in a week but some occupations have different overtime structures. For instance, workers at community care centres and ambulance drivers aren’t eligible for overtime unless they’ve worked more than 60 hours in a week. Similarly, highway construction workers and heavy equipment operators aren’t eligible until they’ve worked more than 55 hours in a week.

Overtime Quebec Regulations

Quebec follows the typical 40-hour workweek, and overtime is paid at 1.5 times the rate of the employee’s standard pay. Employees may request time off instead of overtime compensation. In some situations, employees may decline to work overtime such as if they’ve already worked 50 hours in a week. When calculating overtime, statutory holidays and vacation days count as worked days, and so qualify for overtime. If the employee and employer form a written agreement to stagger work hours over multiple weeks, overtime payment may not apply.

Saskatchewan Overtime Laws

For the most part, Saskatchewan follows typical overtime in Canada standards, giving employees 1.5 times their typical wage when they work more than eight hours in a day or 40 hours in a week. But some professions aren’t eligible for overtime, including loggers, fishers, and trappers. If the employer is issued an averaging of hours permit by the Director of Labour Standards, overtime guidelines may change, or not be required at all.

There is quite a bit of variation by province and territory when it comes to overtime in Canada. It’s essential that you pay close attention to your local laws so you can account for overtime pay in the budget and maintain accurate books. Paying overtime can cut into your company’s bottom line, so you may want to improve your approach to employee scheduling if you find you’re paying it too frequently. Communicate with your employees so you can factor overtime pay into the budget or request that they stay within their scheduled hours to avoid any confusion.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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