Employers – Carefully Manage Employee Overtime!

France made a bold move last month by tabling new legislation aimed at giving employees the right to ignore work emails and other work-related messages when outside the office. The legislation addresses the issue that employees are unable to ‘turn off’ at the end of the workday and are suffering higher rates of stress and burnout as a result. With the smartphone, there is the expectation that employees should be ‘on,’ engaging in workplace discussions over email – even when these discussions are not of an urgent nature.

In Ontario, we do not have such legislation. However, we do have the Employment Standards Act (the “ESA”), which regulates employment laws for most Ontario workplaces and establishes the amount of hours an employee is able to work in any given week. The ESA sets the regular workweek at up to 40 hours: your employees are entitled to overtime pay after they have worked in excess of 40 hours (at the employees’ regular hourly rate) and overtime premium pay (normally 1.5x an employees’ regular hourly rate) when they have worked 44 hours or more per week.  The ESA also establishes the maximum number of hours that most of your employees can be required to work in a week, which is 48 hours. This weekly maximum can be exceeded only if there is a written agreement between the employee and you and you have received the approval of the Director of Employment Standards for the excess hours.

In some workplaces, reductions to the workforce have forced the remaining employees to pick up the slack and work longer hours. However, you should be mindful that the ESA does not confine ‘work’ or ‘overtime’ to the time an employee spends at the physical work location: overtime can easily apply to work-related communications (i.e. email or phone calls) conducted after-hours and during the employee’s personal time.

Although most employees are subject to the ESA’s hours of work and overtime rules, there are a number of positions that are exempt from these guidelines. For example, managers, some healthcare professional, lawyers and teachers are exempt from the ESA hours of work provisions (to name a few).

That said, you should not assume that a position of high pay or responsibility is exempt from the ESA: care should be taken to analyze and determine whether an employee is within the scope of the ESA’s hours of work and overtime provisions.  Overtime pay has become a litigious area in recent years: in 2014, Scotiabank was estimated to have paid out more than $95 million in unpaid overtime for a group of approximately 5000 employees. In 2015, the trucking company Canada Cartage was hit with a $100-million class action lawsuit by some of its employees alleging unpaid overtime. Additionally, companies found to have contravened the ESA can face fines as well as imprisonment (in the case of sole proprietors) for up to twelve months.

It is abundantly clear that properly managing hours of work and overtime is of utmost importance to your workplace. Not only does it protect your bottom line, but it also ensures that your most valuable workplace resource (i.e. your human resources) are able to contribute productively and don’t burnout.

You can better manage your overtime by heeding these 3 tips:

1. Conduct a job classification audit of your workplace to determine which positions are within the scope of the ESA’s hours of work provisions;
2. Develop an overtime policy that provides clarity about how and under what circumstances an employee will be required to work more than 40 hours per week. This policy should include workplace expectations for viewing and replying to work-related emails during an employee’s personal time; and
3. Ensure that the overtime policy is being followed. It’s no good having a workplace policy if you are not using it: the existence of a policy alone will not protect you from the Ministry of Labour or an overtime lawsuit. What you do in practice is far more important than what you say in a policy.