By: Brian Tsui
What is overtime pay?
In Ontario, overtime pay usually occurs after an employee has worked over 44 hours in a work week. For every hour worked in excess of 44 hours, the employee would be paid 1.5 times their regular rate. For example, if an employee has a regular rate of $20 per hour, their overtime rate would be $30 per hour (20 x 1.5 = 30). If the employee were to work 46 hours in a week, they would be able to claim a rate of $30 per hour for the additional 2 hours of overtime worked.
Am I owed overtime pay?
In Ontario’s Employment Standards Act (ESA), the right to overtime pay is one of the basic rights that employees have. However, the ESA only covers employees and does not apply to independent contractors. In other words, if you are an independent contractor, it is not guaranteed that you will have the right to overtime pay. Nonetheless, as an independent contractor, you could still be entitled to overtime pay if it is stated in your contract or if you were misclassified.
Misclassification occurs when an employee is wrongfully classified as an independent contractor when the true nature of the work relationship is an employee-employer relationship. Employees who were misclassified as independent contractors have the ability to seek protection against the loss of employment benefits, such as the entitlement of overtime pay, when they have been misclassified. [1] If you are curious about whether you are classified as an “independent contractor” or “employee”, please check out the “Classification Tool” in MyOpenCourt. Depending on your answers, the “Classification Tool” will analyze prior cases dealing with employment classification and then predict whether you are an independent contractor or employee.
That being said, even if you are an employee, being entitled to overtime pay can be tricky to solve because, under Ontario’s Employment Standards Act (“ESA”), there is a list of jobs exempt from being entitled to overtime pay.
One of the main categories of jobs that are exempt from overtime pay are managers and supervisors. If the work performed by the employee is managerial or supervisory, the employee is not entitled to overtime pay, regardless of the title of their position. There are many more job categories (e.g. doctors, lawyers, accountants, etc.) are exempt from overtime pay. If one does fall under the exempt job categories, regardless of how many hours they work in excess of 44 hours during a work week, they will not be entitled to overtime pay.
In addition to the list of jobs exempt from overtime pay, certain jobs require a higher overtime threshold than the standard 44 hours. For example, if you work in street construction, you are entitled to overtime pay for each hour worked over 55 hours in a workweek. For more information on industries and jobs with exemptions or special rules to overtime play, the list can be found here.
It is important to note that an employer and employee cannot agree to waive the employee’s right to overtime pay. Under the ESA, these kinds of agreements are not allowed, and the employee would continue to have their entitlement to overtime pay. However, an employee can agree with their employer to take paid time off instead of being paid overtime. This is commonly referred to as “banked” hours or “time off in lieu”. [2]
The right to overtime pay can be very complex, and each case must be examined on a case-by-case basis. In the near future, MyOpenCourt is launching an “Overtime Pay Tool”, which will be able to accurately predict whether the user is entitled to overtime pay.
Disclaimer: The information provided in this response is for general informational purposes only and is not intended to be legal advice. The content provided does not create a legal client relationship, and nothing in this response should be considered as a substitute for professional legal advice. The information is based on general principles of law and may not reflect the most current legal developments or interpretations in your jurisdiction. Laws and regulations vary by jurisdiction, and the application and impact of laws can vary widely based on the specific facts and circumstances involved. You should consult with a qualified legal professional for advice regarding your specific situation.
[2] https://www.labour.gov.on.ca/english/es/tools/hours/overtime_tutorial.php