Overtime and the Salaried Employee under the Employment Standards Act

By: Jesse Dunning

Overtime for salaried employees can be an area of confusion for workers in BC.  Many employees (and many employers) assume that because their employment contract sets out a fixed salary for the year, the employer is not required to pay the employee for overtime worked.  This assumption is incorrect, and can lead to significant problems in the employment relationship. 

In fact, unless an employee is in one of the select categories of employees excluded from hours of work and overtime requirements under s. 34 of the Employment Standards Regulation, or is working under an averaging agreement or a variance, a salaried employee is entitled to overtime under the Employment Standards Act if he or she has worked more than 8 hours in a day, or more than 40 hours in a week.  An employee is also entitled to time-and-a-half pay if he or she is not provided with at least 32 hours in a row free from work each week.

As the Employment Standards Act sets out minimum standards for employment contracts in British Columbia, employees and employers cannot contract out of these obligations.  This means that even if a salaried employee has agreed that overtime cannot be paid, he or she is not bound by this agreement, and can seek to recover unpaid overtime through the Employment Standards Branch.

With salaried employees, the amount of overtime is determined by calculating a nominal hourly rate, based on how many hours they would have to work at full-time employment to achieve their salary.  After this hourly rate has been determined, the employee is owed:

  • Time-and-a-half when working more than 8 hours a day;
  • Double pay when working more than 12 hours a day;
  • Time-and-a-half when working more than 40 hours a week; and
  • Time-and-a-half for any time the employee is required to work during the 32 hour rest period. 

Because both employees and employers are often unaware of the requirement to pay overtime for salaried workers, it is possible for significant unpaid overtime to accrue without anyone realizing it, particularly as the Provincial government has recently amended the Employment Standards Act to extend the period for recovering of unpaid wages from 6 months to 12 months.  This means that there is now the potential for up to a year of unpaid overtime to be owing. 

If you are a salaried employee who has been required by your employer to work unpaid overtime, or an employer concerned that you have salaried employees who have been working significant amounts of unpaid overtime, it is important that you speak with a qualified workplace lawyer regarding your situation.

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@ksw.bc.ca or 604-746-4357.