For many Ontarians, being a salaried employee is the ideal employment scenario. The main benefit of a salary is having a fixed income week after week. Unlike hourly employees, salaried employee will receive the same pay, whether they work 30 hours or 40 hours in a week. If you’re a salaried employee and non-unionized, you may then be surprised to learn that overtime for salaried employees is still a legal right.
What is Overtime Pay?
According to the Employment Standards Act, 2000, (the “ESA”) the normal rule in Ontario is that employees who work more than 44 hours in a week (or an average of 44 hours over several weeks) are owed overtime wages. Although overtime can be offered as paid time off, the normal ESA rules require that hours worked above 44 hours in a week must be paid at a rate that is 1.5 times an employee’s regular wage rate. In other words, a regular hourly rate of $20.00 per hour turns into an overtime rate of $30.00 per hour ($20.00 X 1.5 = $30.00) for hours worked above 44 in a week.
Overtime Exceptions:
Despite these ordinary rules, exceptions to who can claim overtime do exist under the ESA. For instance, under the ESA and its regulations, exceptions will apply for special groups like managers and supervisors. However, simply being called a manager or supervisor does not mean that you’re excluded from overtime. Instead, whether you are properly a manager will depend on a legal review, including whether you are responsible for supervising other employees.
Beyond simply supervisory roles, unusual exceptions to overtime will apply for things like landscapers, mushroom growers, and Information Technology professionals. Other odd exceptions include groups like horse breeders, swimming pool installers, doctors, and lawyers, but the take home point is that the exceptions are quirky and difficult to predict.
Overtime for Salaried Employees vs Hourly Employees:
Where most people experience confusion on overtime is on the issue of overtime for salaried employees. Many employees in Ontario will see themselves as “salaried” and will immediately assume that they are not eligible for overtime. This, however, is a common misconception. It’s also one that is not often cleared up by employers.
Like many other employees in Ontario, salaried employees are eligible for overtime. The only difference that exists between hourly and salaried workers is how a salaried employee determines their overtime rate. Unlike hourly workers who can do quick math at 1.5 times their normal hourly rate, the salaried employee must find the overtime rate using their fixed salary as a guide.
By way of example, an employee who earns $75,000.00 annually would have a non-overtime rate of $32.78 per hour.
- $75,000.00 per year / 52 weeks per year = $1,442.31 per week
- $1,442.31 per week / 44 non-overtime hours per week = $32.78 per non-overtime hour
That same employee would therefore have an overtime rate of $49.17 per hour for all hours worked above 44 hours in a week ($32.78 per non-overtime hour x 1.5).
In those circumstances, any hours worked above 44 hours per week would be eligible for the higher overtime rate of pay.
Obligation to Pay Overtime:
Even if you’re eligible for overtime, you may still be wondering whether your employer is obligated to pay you those overtime rates. Luckily the ESA is clear and there is no way for an employer to avoid its obligation to pay overtime wages. This means that while an employer may try to offer explanations that the overtime wasn’t approved, that the hours weren’t properly tracked, or that there is some other reason why it can’t be done, the law is clear that an employer must pay overtime.
At the end of the day, whether you’re a researcher, a cleaner, an academic, a nurse, a personal support worker, an early childhood educator, or a salaried employee of any kind, there’s a good chance that you’re entitled to overtime if you’re regularly working over 44 hours in a week.
If you have questions about whether you are exempt from overtime wages, whether you are being paid your proper entitlements, or if you otherwise need assistance with your matter, you can contact the lawyers or paralegals at McMahon Molyneaux Henriquez to assist.
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