By: Negin Namaei Hesari

All Canadian provinces require that employees be paid overtime for all hours beyond their standard workday or workweek. However, the law makes few distinctions about who qualifies for overtime pay.

Key Points

  • Most employees in Canada are entitled to overtime pay if they work more than the standard 40-44 hours per week (depending on the province). 
  • Managers and supervisors do not qualify for overtime pay if more than 50% of their work is truly managerial or supervisory. 
  • Overtime pay is 1½ times the employee’s regular rate of pay, also known as “time and a half”. 
  • When the nature of the work necessitates flexible and irregular hours, the hours of work must be calculated over an averaging period of two or more consecutive weeks. 
  • Finally, an employer and employee cannot make an agreement to eliminate overtime pay, but they make a decision for the employee to take paid time off in lieu of overtime pay. 

What are the Standard Hours of Work?

For most employees, whether they are full time, part-time, students or casual workers, standard hours of work indicate eight hours in a day or 40-44 hours a week (depending on the province). Any hours worked in excess of the standard hours must be paid at an overtime rate, which is 1½ times the employee’s regular rate of pay — also known as “time and a half”.

For example, an employee whose regular rate is $17 an hour will receive $25.50 in overtime for every hour in excess of the standard hours.

The Exceptions to the Standard: Averaging, Special Regulations and Modified Work Schedules

There are three exceptions to this standard: averaging, special regulations and modified work schedules. 


If the nature of the work necessitates irregular hours, resulting in employees having schedules that vary from time to time, the hours of work in a day or a week may be calculated over an averaging period of two or more consecutive weeks. If the employment is terminated by the employee during the averaging period, the employer should pay the employee the regular rate of wages for the actual hours worked. If the employer terminates the employment, the employer should pay the employee the overtime rate for any hours worked beyond 40 hours a week during the averaging period.

It should also be noted that the maximum and standard hours in an averaging period are reduced by any holiday with pay; any day of annual vacation; any sick day when the employee is not entitled to a regular salary; and, if there are no fixed working days, for every such period of seven consecutive days. The Canada Labour Code provides employees with one day of rest a week. However, during an averaging period, an employer can schedule hours without regard to the normal requirement of the weekly rest day.

Special Regulations 

Under the special regulations exception, if an employee carries out management or supervisory responsibilities, they generally do not qualify for overtime. Architects, dentists, lawyers, engineers and medical doctors are also excluded. Even if they perform other kinds of tasks other than managerial or supervisory, if they are not performed regularly they might not be entitled to overtime pay.

What happens when employees are required to do more than one kind of work, where some parts are specifically exempt and other parts are covered by overtime pay? In such cases, if at least 50% of the hours the employee works fall in a job category that is covered, the employee qualifies for overtime pay.

For example, Nigel works for a moving company both as a driver and as a dispatcher in the office. Working as a driver, Nigel is exempt from overtime pay, but working as a dispatcher, he qualifies. During a particular workweek, Nigel worked 26 hours as a dispatcher and 22 hours as a driver for a total of 48 hours, which is eight hours over his standard workweek. Since he spent at least 50% of his working hours in a job category that is covered, he is qualified to receive eight hours of overtime pay.    

Modified Work Schedules

The modified work schedules exception enables employers to implement compressed workweeks and flexible hours of work. Instead of working a traditional eight hours a day for five days a week, a worker under a modified work schedule may work ten hours a day for four days a week. It is important to note that in any modified work schedule, the standard hours of work cannot exceed an average of 40 hours a week, and the maximum hours cannot exceed 48 hours a week.

How can a modified work schedule be applied? If the employees are involved in a trade union, the modified schedule must be implemented through a written agreement between the employer and the union. In the absence of trade union involvement, the modified schedule must be approved by at least 70% of the affected employees. In the case of approval by the employees, the notice of the modified schedule must be posted by the employer at least 30 days before it comes into effect. Overtime pay under a modified schedule must be paid after the approved daily or weekly hours. For example, when the schedule is for a workweek consisting of four ten-hour days, overtime is payable after an average of 40 hours a week where the schedule consists of two or more weeks. 

Workers in office

One Last Note

An employee and an employer cannot make an agreement to eliminate the employee’s right to overtime pay. However, the parties can make an agreement for the employee to take paid time off in lieu of overtime pay. This is sometimes called “banked” time. In the case of banked time, the employer must pay 1½ hours of paid time off work, at the overtime rate, for each hour of overtime worked. Banked time must be paid within three months or otherwise agreed between parties no later than 12 months of the week in which the overtime was earned. If employment terminates before the employee has taken the paid time off, the employee must receive overtime pay. This must be paid within seven days of the date the employment ended on what would have been the employee’s next payday. 

What This Means for You

Keep track of the hours you’ve worked. Use the information above and review your terms of employment to see whether or not you qualify for overtime pay. 

Not sure whether you are an employee or a contractor? Use our free AI-powered tool to check here. 

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