2. Overview
An employee’s entitlement to overtime pay can arise as a result of
the employment contract collective agreement, policy, or by way
of applicable employment standards legislation.
Ontario’s Employment Standards Act, 2000 (“ESA”) sets out the
minimum requirements with respect to overtime pay.
With a few exceptions, the ESA requires that employers pay
employees 1 ½ times their regular rate of pay for every hour
worked in excess of 44 hours in a work week. However, an
employment contract, collective agreement, or company policy
may provide for a higher rate of overtime pay or a lower hourly
threshold for entitlement to overtime pay.
3. Calculating Overtime
The rate of overtime will vary depending on how an employee is
compensated (ex: hourly, salary, commission). If both parties agree,
employees can also choose to take time off in lieu of overtime
pay, which must generally be taken within three months from the
week the time was earned, or if the employee agrees, within 12
months of that time.
Employees cannot waive their entitlement to overtime pay. However,
employers may wish to avail themselves of the averaging provisions
in the ESA, which may allow them to average an employee’s hours of
work over a period of two or more consecutive weeks for the purpose
of determining entitlement to overtime pay. This practice requires
approval from the Ministry of Labour.
4. Maximum
Hours of Work
In general, employees may not work more than 8
hours per day or 48 hours per week, unless there
is an agreement between the employer and
employee to work hours in excess of these
prescribed limits and the employer has obtained
Ministry of Labour approval.
5. Classes of Employees Exempt from Overtime
Provisions of ESA
Most Ontario employers are subject to the ESA unless they fall under federal jurisdiction. However, Regulation 285/01 of
the ESA outlines a number of exemptions to various parts of the ESA, including the overtime provisions. In accordance with
Regulation 285/01, some classes of employees are not entitled to overtime. Employees not entitled to overtime pay include: various
professionals (doctors, lawyers, etc.), firefighters, taxi drivers, ambulance drivers, and anyone acting in a managerial or supervisory
role. Whether an employee is acting in a supervisory or managerial role will not be determined by the employee’s position title but by
the nature of the work the employee actually performs. As a result, there may be some circumstances in which employees with the
title of “manager” or “supervisor” will not fall within the exemption for overtime pay provided for in Regulation 285/01.