A Summary Of Overtime Pay In Ontario: What Employers Need To Know

A Summary Of Overtime Pay In Ontario: What Employers Need To Know Over the past few years, Ontario overtime pay rules and regulations haven’t changed very much. Having said that, some employers still struggle with understanding how overtime pay works.

If you lack the knowledge of what workers are entitled to overtime pay, you may find yourself in a non-compliance situation. That could be bad news for you and for your employees.

Regardless, Ontario overtime pay is easier to understand than you think. This overview will break it all down for you.

Like the majority of provinces, the pay rate for overtime in Ontario is “time and a half,” or 1½ times the employee’s regular rate. According to the Employment Standards Act, the threshold for overtime pay in Ontario is 44 hours per week. Whenever an employee works more than 44 hours, they are entitled to 1½ times their normal pay for every extra hour worked.

Here’s an example to break it down further. If an employee makes $320 CAD an hour, you would need to pay them 1.5 more for every hour worked past the 44-in-a-week threshold. The math looks like this: $30 CAD x 1.5 = $45 CAD. This means your employee would be entitled to $45 per hour for every overtime hour worked.

However, it’s important to note that overtime only applies weekly, not daily. If an employee works 10 hours instead of 8, but still works within the 44 hour a week threshold, they are not entitled to overtime pay.

Who is entitled to overtime pay?

The easy answer? The majority of employees, even those that are highly paid. However, there are some exceptions to the Employment Standards Act overtime provisions. This includes regulated professionals, such as doctors, pharmacists, lawyers, dentists, etc., who are not entitled to overtime pay.

Another important thing to note is that some jobs have a higher overtime pay threshold.

Highway transport truck drivers only become entitled to overtime pay for every hour worked after 60 hours per week, as an example.

Are employees obligated to work overtime?

In most cases, the answer is no, employees cannot be forced to work outside of their usual hours, unless their employee contracts specifically allow for it.

What if overtime isn’t paid?

To be clear, even if an employee agrees to work without overtime pay, that isn’t legally allowed under the Employment Standards Act. An employee is not allowed to waive their rights to overtime pay and any agreement with such pretenses would be considered void.

However, there is a process to make an agreement to take paid time off in lieu of overtime pay.

It is also prohibited for an employee to reduce an employee’s hourly rate to avoid having to pay for overtime.

If an employer fails to pay for overtime, an employee can contact the Ministry of Labour, which may help to enforce overtime entitlements. Alternatively, an employee also has the option to leave their job due to unpaid overtime and receive full severance pay through a constructive dismissal.

As an employer in Ontario, it’s crucial to understand the overtime pay rules and regulations to ensure you’re legally compliant. Failing to do otherwise could result in your employee filing a complaint, which puts you — and your business — in a bad situation.