A client called me this week and asked: can I get paid overtime if I’m a salaried employee? It was a great question. The truth is, you can still receive overtime pay as a salaried employee! The Employment Standards Act (ESA) make clear the rules regarding this matter.
What constitutes Overtime Pay?
The rule for overtime pay is detailed in section 22 of the Employment Standards Act (ESA). According to this provision, if an employee is eligible for overtime, their employer must compensate them at a rate of at least one and a half times their regular pay for each hour worked beyond 44 hours in a work week. Alternatively, the employer can offer time off in lieu of overtime pay, where the employee receives one and a half hours of paid time off for every hour of overtime worked.
Can you get Overtime Pay?
To qualify for overtime pay, an employee must meet the specified criteria and not fall under any exemptions. These exemptions, detailed in Ontario Regulation 285/01 of the ESA, cover a variety of roles.
Some exemptions apply to specific professions, such as architects, lawyers, professional engineers, and medical practitioners. Other exemptions encompass broader categories, including information technology professionals and commission-based salespeople (excluding route salespeople). Additionally, employees who serve as managers or supervisors are exempt due to the nature of their work.
Exemption from Overtime Pay for Managers and Supervisors
The exemption for managers or supervisors, as outlined in Ontario Regulation 285/01, specifies that overtime pay rules do not apply to “a person whose work is supervisory or managerial in nature and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis.” This exemption focuses on the nature of the work performed rather than the job title. Consequently, an employee titled “manager” may not necessarily qualify for the exemption, while an employee without a managerial title might be exempt based on the character of their work.
Case Law
The rationale behind this exemption is explained by the Ontario Superior Court of Justice in the 2013 case Tsakiris v. Deloitte & Touche LLP. The Court noted that because managers and supervisors have the power and responsibility to direct, supervise, and manage and are paid accordingly, managerial employees do not require the protection afforded to rank and file employees and so they are exempt from the overtime protections.”
In Tsakiris, the Court outlined a two-step process to determine if an individual falls under this exemption:
- Determine whether the “character” of the employment is managerial or supervisory.
- If the answer to the first question is yes, assess whether the individual performs non-managerial or non-supervisory tasks.
A role with a managerial or supervisory character typically involves some authority over other employees. Examples include:
- The ability to hire and fire individuals
- The authority to discipline other employees
- Influencing management or policy decisions that impact other employees
- Supervising the work or actions of other employees
After establishing the character of an employee’s work, it is necessary to determine if they perform non-managerial or non-supervisory tasks. If an employee has a managerial or supervisory role but regularly performs non-managerial or non-supervisory tasks, they are likely entitled to overtime pay. However, if their work primarily involves managerial or supervisory tasks and they only occasionally perform non-managerial or non-supervisory tasks, they are not likely entitled to overtime pay.
If an employment agreement contains provisions that contract out overtime pay then the employee is still entitled to overtime pay.
What is the Overtime threshold?
In certain situations, the threshold for “overtime” may be higher than 44 hours per week. This threshold varies based on the type of work performed. Here are some examples to illustrate these exceptions:
- A 55-hour threshold applies to employees involved in road building for streets, highways, or parking lots.
- A 50-hour threshold applies to seasonal employees engaged in the canning, processing, and packing of fresh fruits or vegetables.
- A 50-hour threshold applies to employees involved in laying, altering, repairing, or maintaining sewers and water mains.
How much can I get paid for Overtime?
Overtime pay is calculated at a rate of at least one and a half times the regular hourly rate for each hour worked beyond the overtime threshold. For salaried employees, this involves determining their equivalent hourly rate and then multiplying it by at least 1.5. Employers and employees may agree to a higher rate of pay through a contractual agreement, but the minimum remains one and a half times the regular rate.
Faisal completed his Juris Doctor from University of Ottawa. He has extensive work experience at Deloitte, Scotiabank and CIBC. Faisal’s approach is grounded in a commitment to his clients’ objectives. He understands how frustrating the court process is for clients and fights to get you the best settlement possible.
