Labor & Employment Law

Wage and Hour Claims - The Next Thing

By Michael Fitzgibbon

In case there was any doubt, Canadian employers should expect that they will be hearing allot more about hours of work an overtime claims.  This type of claim has been booming in the U.S. as the Wall Street Journal Blog reports at The New New Thing: ?Wage and Hour? Litigation. Canadian employers have been somewhat insulated from this, however, two high-profile class actions will change that, and it's certainly time to assess a number of things including:

• Who receives overtime pay in your company? One of the questions that will have to be determined here is where do you draw the overtime line?  There is sometimes an exception for managers and supervisors (variously worded in the applicable legislation) and the statutory definition is quite different from what you might think in practical terms.  A manager for purposes of your organizational structure might not be a manager for purposes of the legislation. 
• How do compensate for overtime?  In Ontario, for example, eligible employees receive 1.5 times their regular rate of pay for all hours worked in excess of 44 in a week.  The requirements in other provinces might be different.  For example, some provinces have daily overtime (i.e. overtime after 8 hours in a day).  The parties are free to agree to a greater right than provided in the employment standards legislation.  For example, the employer might pay overtime after 40 hours, which would be a greater benefit than the Ontario Employment Standards Act, 2000 requires and would prevail. 
• Do you provide time in lieu of overtime pay?  If so, how is this "banked"?  Is it banked at "straight time" or at 1.5 times, as would be required in Ontario. 
• What are the hours that employees work?  Are these on-side the statutory requirements?
• In Ontario, there are written agreement requirements in certain cases where the employee and employer must agree to the arrangement (for example, excess hours, banked overtime).  This is a complex area and, if you're in Ontario (I can't speak to other jurisdictions), do you have written agreements.

What I'm getting at is simply that every employer in Canada should review their applicable employment standards legislation and conduct an audit of its hours of work and overtime practices because these claims are, to quote the Wall Street Journal, the "new thing". 

If you're an employer that is subject to the Ontario Employment Standards Act, 2000, you'll want to familiarize yourself with the Hours of Work and Overtime fact sheet and the Employer's Guide To The Application Process: Excess Hours Of Work/Averaging Hours. There are some good resources at the Ministry of Labour website. 

Full post as published by Thoughts from a Management Lawyer on October 01, 2007 (boomark / email).