Overtime rules in Canada play a crucial role in protecting workers’ rights and ensuring they’re fairly compensated for their extra efforts. If you’re a Canadian employer trying to navigate the complex world of overtime law, you’re in the right place!
This article will break down these Canada overtime laws in an easy-to-understand manner. You’ll learn who qualifies for overtime, how it’s calculated, and how it varies across provinces.
Plus, we’ll show you how Timeero, a user-friendly time-tracking tool, can help your business effortlessly follow these important regulations.
Overtime is defined as any hours worked beyond the regular working hours. Working longer hours grants the worker an extra sum of money on top of their regular salary, with a minimum pay rate of at least 1.5 times their standard hourly pay.
Working eight hours a day or forty hours a week is generally considered regular work hours. Employees are entitled to one day off each week. They are also entitled to rest periods and breaks during their workday and to time off on public holidays.
However, alternative work schedules are permitted for some professions or sectors of the economy. Examples are transportation industry jobs such as truck drivers and commission-paid sales reps in the banking sectors.
Canadian labor laws dictate that a substitute for overtime work hours compensation is paid time off. The time off is equivalent to 1.5 hours for each hour of overtime worked. An employee is entitled to 7.5 hours of paid time off, for example, if they worked five overtime hours.
However, not every occupation qualifies for overtime pay. Managers and professionals, including engineers, doctors, lawyers, and architects, are among these occupations. They are paid at the usual hourly wage rate for the additional hours they work, regarded as regular work hours.
The last thing you want as a company is to face legal action and fines for not compensating employees properly. Your company should, therefore, prioritize accurate time tracking.
It not only helps you adhere to Canadian overtime laws, but it also cuts down on financial losses. You are spared the hefty labor costs of overcompensating employees for overtime.
You may have tried time-tracking tools like QuickBooks Time before and faced issues like poor user experience, lack of support, and high cost, prompting you to look for a better solution. If so, Timeero offers what you’re looking for.
This software provides features to help you better track your employees’ overtime hours. These include:
Timeero allows employees to track their work hours accurately. This is especially important when it comes to monitoring regular hours vs overtime hours.
Employees can easily clock in and out of the mobile app, and the software automatically records the time they have spent working. This reduces the risk of human error in calculating overtime, which is necessary to comply with laws and prevent overbilling.
You can set up overtime thresholds on Timeero. If employees approach overtime hours, they will receive an alert to notify them, and so will their managers. This feature helps employers track hours easily and make informed decisions about scheduling and allocating workload in the future.
If you have employees who are not eligible for overtime, you can specify a time limit beyond which they will be immediately clocked out. At that hour, the employee will be clocked out, and a flag will appear on their timesheet. Employees who are not eligible for overtime will not be able to log in the extra time, saving you the effort of looking through records.
This may be a practical solution, but to be effective, you must communicate it to employees. Let them know what to expect and the steps to take if they work overtime and are auto-clocked out.
The onboarding process is critical to successful adoption. Timeero provides excellent onboarding for both administrators and employees, simplifying the process.
It also has a user-friendly interface and mobile app that users can quickly download. Adopting a new management tool can be intimidating at first and, in most cases, will trigger employee pushback. However, an easy-to-use app with a short learning curve allows employees to put it to good use immediately and boosts employee productivity.
Timeero allows you to customize your overtime settings to align with specific Canadian overtime laws, as these laws can differ by province. Employers can configure their accounts to reflect the overtime rules and thresholds applicable to their region, ensuring accurate calculations and compliance with local regulations.
This is made possible through a premium feature called Multiple Overtime Rules. You can configure the overtime limitations for separate individuals or groups under one Timeero account by using this feature.
If you have employees in many provinces, this setting will improve your reporting procedure. It lets you quickly set up special rules like overtime and pay rates and add people. When you add new users, they will be automatically allocated to the default payroll.
Timeero provides real-time tracking of employees. Employers can not only see the hours employees work throughout the workday, but they can also see where the workers are in real-time.
This means that when you receive a notification that an employee has clocked in and is working overtime, you can check their location to guarantee they are within work premises. With this level of accountability and transparency, employee-employer overtime disputes will become a thing of the past.
Maintaining accurate records of hours worked and overtime compensation is the foundation of successful compliance. These records are vital and should be easily accessible for auditing purposes, should the need arise.
Timeero provides comprehensive reporting features. It allows employers to maintain accurate records of hours worked, overtime pay, and other important information.
You can see when each person clocked in, the number of hours they worked, where they were located, and more. This facilitates precise time reporting for your organization.
Generating reports can be done in several ways, such as by job, user or group, data range, totals, or mileage. You can also have a breaks report and a scheduled vs. hours worked report.
Moreover, the software allows you to export your report to a PDF or CSV file after generating it.
Timeero can integrate seamlessly with various payroll systems, including Paychex, ADP, Zapier, Paylocity, Gusto, Xero, and QuickBooks. This simplifies calculating and processing overtime pay accurately. It ensures that overtime hours and rates are correctly reflected in payroll calculations, reducing the risk of errors.
Canada’s labor laws are governed at both the federal and provincial levels. Each province in Canada has its employment standards and overtime regulations. It’s crucial to understand the specific laws that apply to your region.
Here’s an overview of overtime laws in various regions:
For most employees in Ontario, overtime hours begin after working 44 hours in a workweek. Unless there is a collective agreement or a contract, employees do not earn overtime pay daily.
Overtime pay in Ontario is calculated weekly or over a longer period defined by an averaging agreement. The overtime rate is 1.5 times the employee’s base pay.
Like the common Canadian overtime laws, Employees can receive paid time off if they agree electronically or in writing with their employer.
Manitoba follows the traditional 8/40 hour scheme, most common for overtime in Canada. Overtime payment is the standard 1.5 of the base wage. Overtime work is entirely voluntary, and any overtime hours can be substituted for time off if used within three months.
Employees paid on commission calculate their overtime by establishing the average hourly wage for the pay period and multiplying their overtime hours by 1.5.
The standard workweek in Quebec is 40 hours. Overtime hours are paid at 1.5 times the rate of the standard pay. Instead of compensation, employees may request time off.
However, the standard workweek differs for specific industries or professions. For example, the standard workweek in the clothing industry is 39 hours. In comparison, for those working in a sawmill or a forestry operation, the workweek is 47 hours.
The employee and employer can form a written agreement of staggering work hours. In those cases, overtime compensation may not apply.
British Columbia follows the common Canada overtime laws of at least 1.5 times the standard wage, exceeding 40 working hours per week. However, there are significant differences regarding daily overtime hours and calculating overtime pay.
For the first four additional extra hours, employees receive 1.5x their standard salary. If they work longer than that - meaning more than 12 hours, they are paid double their base pay for every additional hour.
British Columbia recognizes an averaging agreement. Employers and employees can agree to shifts lasting up to 12 hours a day while not exceeding 40 hours a week. Such shifts can be scheduled from one up to four weeks.
With such an agreement, an employee can, for example, work four 10-hour shifts per week without being paid overtime. But if they are asked to work one more 8-hour shift the same week and exceed the 40-hour average, they must be paid 1.5 of their base pay for eight additional hours.
When planning schedules, employers must remember that employees must have at least 32 hours free from work in a row. Per Canada’s overtime laws, employees in British Columbia may also get time off instead of their overtime pay if there is a written agreement with the employer.
Regarding compensating employees for the extra hours, Alberta follows the 8/44 rule. This state mandates employers to pay any extra hours after 44 hours a week instead of the standard 40. Still, Alberta does follow the eight-hour workday rule, so any spare time after eight hours must be paid by at least 1.5 times the employee’s standard pay.
The rule is simple - overtime hours that an employer should pay are whichever is greater - the daily or the weekly totals.
Yet again, there are many exceptions for different professions. For example, in caregivers, overtime is defined differently.
For shifts less than 24 hours, overtime is paid, whichever total is greater - hours worked over 12 hours a day or 264 hours a month. For 24-hour shifts, overtime is paid for 264 hours in a work month.
Furthermore, by common Canadian overtime laws, Alberta allows employees to take time off instead of overtime pay. Still, a written agreement must exist between employers and employees.
In New Brunswick, employees qualify for overtime for working more than 44 hours a week. The overtime rate is calculated by multiplying the minimum hourly rate by 1.5. However, workers who earn more than the overtime rate don’t qualify for an overtime paycheck.
Also, some occupations, such as government, camp counselors, or construction workers, may not be eligible for overtime or might have different conditions.
Unlike the other Canada overtime laws, banking of hours is not permitted in this province.
In Nova Scotia, there are different overtime rules for different professions. However, most employees receive overtime hours compensation if they work more than 48 hours a week. The overtime pay is calculated as 1.5 times their base pay.
However, in specific industries such as oil and gas, transportation, information technology, or shipbuilding, the overtime rate is calculated using a minimum wage multiplied by 1.5.
In certain professions, such as water and sewer installers, landscapers, and sawmill employees, overtime hours are compensated if they have worked more than 110 hours in two weeks.
In Newfoundland and Labrador, overtime is granted when employees work more than 40 hours per week. The overtime rate is calculated by multiplying the current minimum pay by 1.5.
Overtime does not apply if a worker switches shifts with a colleague, resulting in extra hours earned. If an employer agrees, workers can bank their additional hours and use them for time off.
For the most part, Saskatchewan follows common Canadian overtime laws, granting employees 1.5 times their standard wage for working more than eight hours or 40 hours a week.
An averaging agreement can modify compensation for overtime hours. Overtime conditions do not apply to logging industry employees, certain types of traveling salespersons, employees working for anglers, outfitters, trappers, etc.
In most professions, the standard workweek is 48 hours. The employee is eligible for 1.5 of their regular wage for additional hours.
Some industries, however, have standard work exemptions.
For example, those working in highway construction, seafood processing, or trucking have a standard workweek of 55 hours. In addition, those working in community care facilities are eligible for overtime pay if they have worked more than 96 hours in two weeks.
An employee can bank their overtime hours and use them within three months as paid time off with the written agreement of the employer. Like other Canada overtime laws, employees are granted 1.5 hours of paid time off for each extra hour.
Canada’s overtime laws are meant to safeguard workers’ rights and ensure fair labor practices by compensating for extra hours worked. They vary by province, with differences in weekly or daily overtime limits, rates, and provisions for paid time off. You must take time to understand the specific guidelines for your location for compliance.
Timeero can simplify the process of overtime recording and compensation for your company. Among the various alternatives for QuickBooks Time, it stands out as an effective solution.
Use it to track time with ease and streamline the process of compensating overtime. You can learn more about the software in this in-depth Timeero review.
In Canada, overtime varies from province to province. In some provinces, if an employee works more than 44 to 48 hours in a workweek, it counts as overtime. In other places, an employee is considered to have worked overtime if it exceeds 40 hours.
Typical overtime pay in Canada is generally 1.5 times a regular worker’s wage. For example, if an employee works 50 hours a week and earns $1,200, they will divide $1,200 by 50. Their average hourly wage, in this case, would be $24. The overtime rate would be $24 multiplied by 1.5- $36 for every additional hour, amounting to $360 on their paycheck.
In Canada, some employees and managers can be exempt from overtime pay. This includes engineers, doctors, lawyers, and architects. They are paid the usual hourly rate for additional hours worked, making them ineligible for overtime pay.