For most employees, whether they work full-time, part-time, are students, temporary help agency assignment employees, or casual workers, overtime begins after they have worked 44 hours in a work week. After that time, they must receive overtime pay.
Overtime pay is 1½ times the employee's regular rate of pay. (This is often called "time and a half.")
For example, an employee who has a regular rate of $12.00 an hour will have an overtime rate of $18.00 an hour (12 x 1.5 = 18). The employee must therefore be paid at a rate of $18.00 an hour for every hour worked in excess of 44 in a week.
Unless a contract of employment or a collective agreement states otherwise, an employee does not earn overtime pay on a daily basis by working more than a set number of hours a day. Overtime is calculated only:
Many employees have jobs that are exempt from the overtime provisions of the Employment Standards Act, 2000 (ESA). Others work in jobs where the overtime threshold is more than 44 hours in a work week. (See the Special Rule Tool)
Managers and supervisors do not qualify for overtime if the work they do is managerial or supervisory. Even if they perform other kinds of tasks that are not managerial or supervisory, they do not get overtime pay if these tasks are performed only on an irregular or exceptional basis.
Some employees have jobs where they are required to do more than one kind of work. Some of the work might be specifically exempt from overtime pay, while other parts might be covered. If at least 50 per cent of the hours the employee works are in a job category that is covered, the employee qualifies for overtime pay.
When an employee does two kinds of work:
Gerard works for a taxi company both as a cab driver and as a dispatcher in the office. Working as a cab driver he is exempt from overtime pay, but working in the office as a dispatcher he is not.
During a work week, Gerard worked 26 hours in the office and 24 hours driving a cab, for a total of 50 hours. This is six hours over the overtime threshold of 44 hours.
Because Gerard spent at least 50 per cent of his working hours that week as a dispatcher (a job category that is covered), he qualifies for six hours of overtime pay.
An employee and an employer can agree in writing that the employee will receive paid time off work instead of overtime pay. This is sometimes called "banked" time or "time off in lieu."
If an employee has agreed to bank overtime hours, he or she must be given 1½ hours of paid time off work for each hour of overtime worked.
Paid time off must be taken within three months of the week in which the overtime was earned or, if the employee agrees in writing, it can be taken within 12 months.
If an employee's job ends before he or she has taken the paid time off, the employee must receive overtime pay. This must be paid no later than seven days after the date the employment ended or on what would have been the employee's next pay day.
The manner in which overtime pay is calculated varies depending on whether the employee is paid on an hourly basis, on a fixed salary, or has a fluctuating salary. Overtime pay calculations may also be affected by public holidays. The following are several examples of how overtime pay is calculated in different cases. See also: Overtime & Time Off in Lieu .
Hourly Paid Employees
Ravi's regular pay is $12.00 an hour. His overtime rate (1½ × regular hourly pay) is $18.00 an hour. This week Ravi worked the following hours:
Any hours worked over 44 in a week are overtime hours. Ravi worked nine hours of overtime (53 - 44 = 9).
Ravi's pay for the week is calculated as follows:
|Regular pay: 44 × $12.00 = $528.00|
|Overtime pay: 9 × $18.00 = 162.00|
|Total pay: $690.00|
Employees on a Fixed Salary
If an employee's hours of work change from day to day but his or her weekly pay stays the same, the employee is paid a fixed salary.
A fixed salary compensates an employee for all non-overtime hours up to and including 44 hours a week. After 44 hours, the employee is entitled to overtime pay.
Sharon's salary is $500.00 a week. She worked 50 hours this work week.
$500.00 ÷ 44 = $11.36
Sharon was paid a regular rate of $11.36 for each hour she worked up to and including 44 hours.
$11.36 regular rate × 1½ = $17.04
Her overtime rate is $17.04 for every hour in excess of 44.
50 hours − 44 hours = 6 hours of overtime
6 hours × $17.04 an hour = $102.24
Sharon is entitled to $102.24 in overtime pay.
|Regular salary: $500.00|
|Overtime pay: 102.24|
|Total pay: $602.24|
Result: Sharon is entitled to total pay of $602.24.
Employees on a Fluctuating Salary
If an employee has set hours and a salary that is adjusted for variations in the set hours, the employee's salary fluctuates.
Suppose Ben is hired on the understanding that he will be paid $450.00 a week for a regular work week of 40 hours. His salary is adjusted for weeks in which he works either more hours or fewer hours. In this case, Ben is actually receiving a wage based on the number of hours he works.
Ben's salary is $450.00 in a regular work week of 40 hours (where the salary is not adjusted). This week, he worked 50 hours.
$450.00 ÷ 40 = $11.25
Ben's regular rate of pay is $11.25 an hour.
$11.25 regular rate × 44 hours = $495.00
Ben's regular earnings for the week are $495.00.
$11.25 regular rate × 1½ = $16.88
His overtime rate is $16.88 for every hour in excess of 44 hours.
50 hours − 44 hours = 6 hours of overtime.
6 hours × $16.88 an hour = $101.28
Ben is entitled to $101.28 in overtime pay.
|Regular pay: $495.00|
|Overtime pay: 101.28|
|Total pay: $596.28|
Result: Ben is entitled to total pay of $596.28.
When an employee's work week includes a public holiday
Antonio’s regular pay is $12.00 an hour. Antonio worked overtime on a week with a public holiday, but he did not work on the holiday. Antonio’s public holiday pay for the Monday is $96.00 (See Public Holidays Pay for information on how to calculate public holiday pay). This week Antonio worked the following hours:
Antonio worked one hour of overtime (45 − 44 = 1).
Antonio's pay for the week is calculated as follows:
|Regular pay: 44 × $12.00 = $528.00|
|Overtime pay: 1 × $18.00 = $18.00|
|Public holiday pay: $96.00|
|Total pay: $642.00|
When an employee works on a public holiday and gets premium pay
Etsuko’s regular hourly pay is $11.00/hour. Etsuko and her employer agreed in writing that she would work on the public holiday and she would be paid premium pay for the hours she worked on the holiday plus public holiday pay.
During the week of the public holiday, Etsuko worked the following hours:
Since Etsuko received premium pay for working nine hours on the public holiday, these hours are not included when the overtime pay is calculated:
54 hours − 9 hours at premium pay = 45 hours = 1 hour of overtime pay
Etsuko's pay for the week is calculated as follows:
|Regular pay: 44 × $11.00 = $484.00|
|Overtime pay: 1 × $16.50 = $16.50|
|Premium pay: 9 × $16.50 = $148.50|
|Public holiday pay: $99.00|
|Total pay: $748.00|
When an employee works on a public holiday and gets a substitute day off
Kathleen's regular hourly pay is $12.00. Kathleen and her employer agreed in writing that she would work on the public holiday and she would receive a substitute day off work with public holiday pay plus her regular rate for hours worked on the public holiday (rather than be paid public holiday pay plus premium pay for the hours she worked on the holiday).
During the week of the public holiday, Kathleen worked the following hours:
Since Kathleen agreed not to receive premium pay for the nine hours she worked on the public holiday, these hours are counted when the overtime pay is calculated:
50 hours − 44 hours = 6 hours of overtime
Kathleen's pay for the week is calculated as follows:
|Regular pay: 44 × $12.00 = $528.00|
|Overtime pay: 6 × $18.00 = 108.00|
|Total pay: $636.00|
Kathleen will also get a substitute day off work with public holiday pay within three months of the public holiday or, if Kathleen and her employer agree, within twelve months of the public holiday.
Some employees' wages are not based on the number of hours they work in a week but instead are paid by the number of pieces they complete and/or by commission. These employees must be paid at least the minimum wage for all the hours they work. They are also usually entitled to overtime if they work more than 44 hours a week.
Calculating the overtime for piecework or straight commission employees
Becka is paid on a piecework basis. Rhian earns straight commissions. They both worked 48 hours this work week and each received a total of $480.00.
$480.00 ÷ 44 hours = $10.91
Their regular hourly rate of pay is $10.91.
$10.91 regular rate × 1½ = $16.37
Their overtime rate is $16.37 for every hour in excess of 44 hours.
48 hours − 44 hours = 4 hours of overtime.
4 hours × $16.37 an hour = $65.48
They are each entitled to $65.48 in overtime pay.
|Regular pay: $480.00|
|Overtime pay: 65.48|
|Total pay: $545.48|
Result: Becka and Rhian are each entitled to total pay of $545.48.
Calculating the overtime for hourly rate plus commission employees
Justine is paid $15.00 an hour plus commissions. In one work week she worked 50 hours and was paid $750.00 in hourly wages plus $200.00 in commissions.
$750.00 + $200.00 = $950.00 total wages paid
$950.00 ÷ 44 hours = $21.59 an hour
Justine's regular rate is $21.59 an hour.
$21.59 regular rate × 1½ = $32.29
Her overtime rate is $32.39.
6 hours × $32.29 an hour = $194.34
She earned $194.34 in overtime wages.
Result: Justine was entitled to $194.34 for overtime pay and was paid $90.00. Her employer therefore owes her an additional $104.34.
Note: Some commission employees are exempt from the overtime provisions. (See the Special Rule Tool.)
Sometimes employees need to work variable hours to meet family responsibilities. For example, perhaps an employee needs to take a child once a month for a day of special medical treatment, but cannot afford to lose a day's pay. Instead the employee would like to work extra hours in the preceding weeks, to make up the time.
Likewise, employers may need employees to work extra hours during a peak period, in order to fill customer orders.
An employer and an employee can agree in writing to average the employee's hours of work over a specified period of two or more weeks for the purposes of calculating overtime pay. Under such an agreement, an employee would only qualify for overtime pay if the average hours worked per week during the averaging period exceed 44 hours.
For example, if the agreed period for averaging an employee's hours of work is four weeks, the employee is entitled to overtime only after working 176 hours during the four work weeks (44 hours × 4 weeks = 176 hours). Note that averaging periods cannot overlap one another and must follow one after the other without gaps or breaks.
Where a union does not represent employees, averaging agreements must contain an expiry date that cannot be more than two years from the date the averaging agreement takes effect. Where the agreement applies to unionized employees, the employer and union may agree to any expiry date.
An averaging agreement cannot be revoked by either the employer or employee(s) before its expiry date, unless both the employer and employee(s) agree in writing to revoke it.
In addition to having agreements in writing, the employer must also obtain an approval to average hours of work for overtime pay purposes from the Director of Employment Standards.
If, however, an employer has not received either an approval or a notice of refusal from the Director within 30 days of serving the application on the Director and has met all other conditions as set out in the ESA, the employer may begin averaging employees' hours but only over two-week periods.
An approval to average hours of work for overtime pay purposes expires on the date on which the averaging agreement between the employer and employee expires, or on any earlier date specified by the Director in the approval. The Director of Employment Standards may also unilaterally revoke an approval to average hours of work by providing the employer with reasonable notice.
Employers who would like to make an application for an approval to average hours of work for overtime pay purposes are required to make their application in a form provided by the Ministry of Labour. The application form is available on the Ministry's website. See also: Averaging and Time Off in Lieu.
An employer who receives an approval to average overtime pay must post a copy of the approval in the workplace where it is likely to come to the attention of the employee(s) identified in the approval and to keep it posted until it expires or is revoked and then remove it.
Calculating overtime pay when hours of work are being averaged over two weeks
Myron and his employer agree in writing to average his hours for overtime purposes over a period of two weeks and Myron's employer obtains an approval from the Director of Employment Standards. Myron works 54 hours the first week and 36 hours the second week. He earns $14.00 an hour and his overtime rate is $21.00 per hour (1½ × $14.00).
Myron's overtime entitlement is calculated as follows:
54 + 36 = 90 hours
90 hours ÷ 2 weeks = 45 hours per week
45 hours per week − 44 hours per week = 1 overtime hour per week
Week 1: 1 hour × $21.00 per hour = $21.00
Week 2: 1 hour × $21.00 per hour = $21.00
Calculating overtime pay when hours of work are being averaged over four weeks
Connor earns $13.00 an hour in weeks when he is working in the retail department and $20.00 an hour when he is working on the assembly line of his employer's operation. He and his employer have agreed in writing and the employer has received an approval from the Director of Employment Standards to average his hours over four weeks for the purpose of calculating overtime. In the first two weeks of the averaging period he is working in the retail department and his overtime rate is $19.50 per hour ($13.00 × 1½). In the second two weeks of the averaging period he is working on the assembly line and his overtime rate is $30.00 an hour ($20.00 × 1½).
The maximum number of hours an employee can work in a regular work week, before being paid overtime, is 44 hours. However, since Connor has signed a written agreement and his employer has an approval from the Director to average his hours of work for overtime pay purposes over a four week period he will qualify for overtime pay if his average hours (that is, the average hours per week during the averaging period) exceed 44 hours.
During a four-week period, Connor worked the following hours:
|Week 1: 56|
|Week 2: 43|
|Week 3: 35|
|Week 4: 46|
|Total hours: 180|
Connor's average hours per week in the averaging period are:
180 ÷ 4 = 45 hours. Connor's average overtime is 1 hour per week.
Connor's overtime entitlement is:
|Week 1: $19.50 per hour × 1 hour = $19.50|
|Week 2: $19.50 per hour × 1 hour = $19.50|
|Week 3: $30.00 per hour × 1 hour = $30.00|
|Week 4: $30.00 per hour × 1 hour = $30.00|
|Total overtime pay for 4 week averaging period: = $99.00|
An employee can make an agreement to take time off in lieu of overtime pay or an agreement to average hours of work for overtime pay purposes, however, an employer and an employee cannot agree that the employee will give up his or her right to overtime pay under the ESA. Agreements such as these are not allowed and the employee is still entitled to overtime pay.
An employer cannot lower an employee’s regular wage to avoid paying time and a half after 44 hours (or another overtime threshold that applies) in a work week. For example, if Josée’s regular pay is $15.00 an hour, her employer cannot drop her regular rate in a week when overtime was worked to $12.00 an hour and then pay her $18.00 (1½ × $12.00) for overtime hours worked instead of $22.50 (1 ½ × $15.00).