Your Guide to Overtime Pay in Ontario

by | Aug 29, 2022 | Employment Law | 0 comments

Minus some exceptions to the rule, Ontario workers are entitled to overtime pay at 1.5 times their normal rate of pay (a.k.a ‘time and a half’) for every hour worked over 44 hours in a week. This applies to hourly and salaried employees and those who earn commissions. There is a common misconception that employees getting paid a salary do not get paid extra for working over 44 hours in a week, or that their salary covers all the hours worked in a week. This is simply not true.

An employer and employee cannot make an agreement that an employee will give up their right to overtime pay, and an employer can’t lower an employee’s pay to avoid paying time and a half after 44 hours. However, an employer can make overtime mandatory for up to 13 hours in a day and 48 hours in a week. If the employer wants an employee to work longer than those maximums, the employee must agree to it.

There are many nuances to overtime pay in Ontario that are detailed below, but if you ever have questions about overtime pay or your rights in the workplace, take advantage of a free consultation at Ertl Lawyers. We’re leaders in Ontario employment law, and we’ll give you an honest assessment of your situation.

Disclaimer: The information in this guide and everywhere else on this website is for general information only and is not intended to provide legal advice of any kind. No lawyer-client relationship is created by accessing or otherwise using Ertl Lawyers’ website or by communicating with a lawyer or staff member. If you need legal advice, contact a Toronto employment lawyer at Ertl Lawyers. We’re more than happy to speak with you.

More Basic Rules Regarding Overtime Pay in Ontario

Laws governing overtime pay in Ontario are, for the most part, contained in section 22 of the Employment Standards Act (ESA.) There are exceptions to these laws that are covered by regulations written under the ESA discussed in the next section.

Generally speaking, employers are required to pay the overtime rate to all employees who work over 44 hours in a week, even if:

  • An employee worked overtime hours the employer did not authorize or pre-approve.
  • The employment contract states that overtime hours are included/assumed in the compensation or stipulates that overtime pay will not be given, contrary to the ESA.
  • An employee worked for a different employer who is related to their current employer.
  • Overtime hours were not properly documented.

So unless you work in an industry or a role discussed in the next section, your employer must pay you a minimum rate of one and a half times your regular wages for overtime hours – including overtime hours previously worked that the employer has not yet paid to the employee.

If your employer owes you overtime pay for previously worked hours, speak to an employment lawyer right away.

Employees around a table working late

Employees Who are Exempt from Overtime Pay Rules in Ontario

There are some professions and industries that are either not covered by certain parts of the ESA or have different rules specifically for them with respect to employment laws and rights in Ontario, like the rules regarding overtime pay. They include (among other fields):

  • EMS, healthcare and health professionals.
  • Manufacturing, construction and mining.
  • Hospitality services and sales.
  • Agriculture, growing, breeding, keeping and fishing.
  • Household, landscaping and residential building services.
  • Government employees.

Follow this link for all of the jobs that fall under this category and the rules that apply to each. Overtime for employees in federally regulated workplaces such as airlines, banks and Canada Post are governed by the rules in the Canada Labour Code.

Putting aside professions that have their own rules regarding overtime pay and other workplace rights, there are also some workers who are covered by other laws in the ESA, but excluded from its overtime provisions.  Some of these exemptions include:

  • Managers/supervisors for managerial/supervisory duties. Sometimes a manager must perform non-managerial work that would qualify for overtime pay. If that work is done regularly (e.g., every day or every week), whether it is scheduled or not, they may be eligible for overtime pay. Speak to an employment lawyer if this scenario applies to your role.
  • Superintendents, janitors, or caretakers of a residential building in which they reside.
  • Professionals working in fields that include information technology (IT), healthcare, architecture, law, professional engineering, public accounting, and others.

The full list can be found in Ontario Regulation 285/01: WHEN WORK DEEMED TO BE PERFORMED, EXEMPTIONS AND SPECIAL RULES under the ESA.

Understanding the 50% Rule For Work Not Eligible for Overtime Pay in Ontario

Many Ontario workers have jobs that require them to perform tasks that are both eligible and exempt from overtime pay. For example, a long-haul trucker may not be able to count the hours they log driving towards their weekly overtime hours, but they may also spend several hours per week doing mechanical work or maintenance around the yard.

As long as that employee spends at least 50% of their hours doing work that is overtime pay eligible, their hours over and above 44 in a week will be calculated at the overtime rate.

Options for Receiving Overtime Pay in Ontario

As the way we work continues to evolve and schedules become more flexible, fewer people are required to stick to a 9 to 5, Monday to Friday workweek. For example, you may have an “averaging agreement” with your employer to average out the number of hours worked over a specific period (up to a maximum of 4 weeks) and work a varying number of hours each week. For example, if you have a two-week averaging agreement, you may work 50 hours one week and 30 the next for a total of 80 hours over the 2-week period or an average of 40 hours a week.

If you average more than 44 hours per week over that period, you’re entitled to 1.5 times your regular pay rate for each of those hours.

You and your employer can also agree on a ‘banking’ option of overtime hours you’ve worked to use them as paid time off at a later date.

A woman at a desk is doing paperwork

Banking Overtime Hours Ontario

An agreement to bank overtime hours must:

  1. Be in writing, e.g., in the employment contract.
  2. Compensate the employee with 1.5 hours of paid time off for every hour of overtime worked.

Banked time (or lieu time) must also be used within three months of the employee earning them, or within 12 months of the week the overtime was earned, if the employee consents to it in a written agreement.

Any banked time that is unused when an employment is terminated is converted back to overtime-rated hours the employee is owed along with any severance and/or termination pay they may be entitled to. Speaking of severance and termination pay, check out our severance pay calculator in Canada for a ballpark figure of how much severance pay you may potentially be entitled to.

How to Calculate Overtime Pay in Ontario

Calculating overtime pay for workers employed by the hour is a straightforward equation of:

Regular Pay = 44 hours x hourly wage

+

Overtime Pay = (total number of hours – 44) x  hourly wage x 1.5

= Total Pay for the Week

Things get a little trickier for salaried employees, those who earn commissions and when calculating holiday pay. (Make sure you’re aware of the pay cut laws in Ontario and your rights!)

Calculating Overtime Pay for Salaries Employees in Ontario

To calculate how much you earn working more than 44 hours a week when on a salary, you must first calculate what you earn per hour. You do this by simply dividing your weekly pay by 44 hours. You then multiply your hourly wage by 1.5 to get your overtime rate and apply it to the total number of hours over 44 that you’ve worked in a week.

Overtime Pay for Workers Who Earn a Commission

For employees who earn commissions as part of their compensation, you simply:

  • Add up how much you made in total for the week or 2-week period.
  • Divide the total by 44, or 88, to get your hourly wage.
  • Multiply the hourly wage by 1.5 to calculate your overtime rate.
  • Multiply your overtime rate by the number of overtime hours you worked.

That’s it! Next for you to read is our post on who is entitled to severance pay. As employment lawyers in Ontario, we know the vast majority of workers don’t know that they are not getting what they are fully entitled to.

David Ertl Lawyer
About David Ertl
David Ertl, LL.B, has practiced employment and disability law for over 20 years. He is also a certified workplace investigator, former adjunct professor, and has written extensively in the areas of employment law, disability insurance, and tribunal practice and procedure.

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