Canada's overtime laws are designed to prevent employees from being overworked and underpaid. They set the upper overtime hours limit and guarantee employees will be paid fairly for working any extra hours.
However, there are many variations by province and territory regarding overtime in Canada. Therefore, when calculating overtime pay, you need to consider all these differences and ensure you keep accurate records.
Our experts have performed in-depth research on Canada's overtime laws, regions, and provinces, so you don't need to!
This thorough article wraps up everything you need to know about Canada overtime laws.
Generally speaking, in Canada, standard work hours are defined as working 8 hours per day or 40 hours a week. Employees are entitled to one day of rest per week. During a workday, they are entitled to breaks and a rest period. They also have a right to time off during a public holiday; the standard work hours are then reduced by 8 hours for each holiday day.
However, different work hours are approved for certain types of work or industries, such as
Canadian overtime laws define overtime work as any hours worked over standard 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.
A retail worker has a full-time job of 40 hours per week. Suppose they work 48 hours a week - they will have 40 hours of minimum wage and eight hours of Canada overtime pay, at least a 1.5 x minimum wage rate.
As an alternative to overtime working hours in Canada, Canada overtime laws most commonly grant an employee paid time off, equal to 1.5 hours for every hour of overtime. For instance, if an employee worked 5 hours overtime, they are entitled to 7.5 hours of paid time off.
However, not all professions are eligible for overtime in Canada under Canada's overtime laws. These professions include managers and professionals, such as doctors, engineers, lawyers, and architects.
When they work longer hours, these hours are considered regular work hours and are paid at a standard hourly wage rate.
And if you're wondering how overtime is taxed in Canada, it's relatively simple. You must deduct employment insurance, Canada Pension Plan contributions, and income tax from overtime compensation.
As an employer, you will need to differentiate between standard and overtime hours to ensure you are paying your employees properly.
Not compensating them fairly can get your company in serious trouble with Canadian overtime laws and subject to lawsuits and penalties.
You can track your employees' hours and efficiently differentiate standard and overtime work hours using mobile app scheduling and time tracking with geofence and GPS capabilities.
Solutions like Timeero can help you accurately monitor your employees' working hours, even when managing a large mobile workforce. Features such as face recognition and geofence time tracking options allow you to have precise and accurate details on your employee's attendance on multiple worksites. Such mobile apps are beneficial for your employees, as they can clock in and out quickly, with a single click, and have peace of mind that they will be paid for every additional effort they've put into their work.
The time tracking process will run smoothly, but the entire payroll process also guarantees compliance with Canada's overtime laws.
Following Canada's overtime laws, every employee working additional hours is granted higher wages for these extra hours. Besides regional differences in overtime rates, there are also regional differences in the maximum standard working hours during a day or a week and differences in certain professions and industries.
We've listed some of the main differences below.
When it comes to compensating employees for the extra hours, Alberta goes by 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 extra 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 in a month. For 24 hours shifts, overtime is paid for any hours over 264 hours in a work month.
Furthermore, by common Canada overtime laws, Alberta allows employees to take time off instead of their overtime pay. Still, a written agreement must exist between employers and employees.
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 the 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 hours average, they have to be paid 1.5 of their base pay for eight additional hours.
When planning schedules, employers must keep in mind that an employee 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.
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.
For example, if an employee earned $1,200 and worked 50 hours a week, 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 paycheque.
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 wage 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 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.
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 certain industries such as oil and gas, transportation, information technology, or shipbuilding, the overtime rate is calculated using 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 for more than 110 hours in two weeks.
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.
Just like with the common Canada overtime laws, Employees can receive paid time off if they agree electronically or in writing with their employer.
In most professions, the standard workweek is 48 hours. The employee is eligible for 1.5 of their regular pay for any 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 for 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 in other Canada overtime laws, employees are granted 1.5 hours of paid time off for each extra hour.
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.
For the most part, Saskatchewan follows common Canada overtime laws, granting employees 1.5 times their standard wage for working more than eight hours or 40 hours in a week.
An averaging agreement can modify compensation for the overtime hours. Overtime conditions do not apply to logging industry employees, certain types of traveling salespersons, employees working for anglers, outfitters, trappers, etc.
As there are essential provincial differences in almost every aspect of Canada's overtime laws, the way you will calculate overtime pay can depend significantly on where your business is located.
To compensate your employees adequately and ensure your business compliance, you need to be closely familiar with Canada's overtime laws.
Besides that, you need a reliable time tracking solution that can help you quickly and timely distinguish the standard and overtime hours and provide the required records.
Timeero can help you pay your employees fairly and forget about possible lawsuits and penalties with its time and geofence tracking solutions, payroll reports, and accounting software integrations.
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