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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.

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.

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.

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.