If you are employed as a manager, and you consistently work more than 44 hours per week, are you entitled to overtime?
There are exemption from overtime rules that apply to managers and supervisors, although it is a narrow exemption. Many employees who hold the title of “manager” or “supervisor” are in fact entitled to overtime pay. This could mean significant liability for their employer to provide back pay for outstanding overtime.
Overtime in Ontario
Most employees in Ontario are entitled to overtime pay, whether they are on an annual salary or paid hourly. Importantly, the entitlement to overtime pay does not depend on how the employee is paid. By default, every employee is entitled to overtime pay unless they fall within one of the exempt categories, which is determined based on the nature of the role and not on how they are compensated.
Generally, overtime pay will apply to every hour worked in excess of 44 hours per week. If the employee and employer agree in writing, the hours worked can be averaged over a 2, 3 or 4 week period.
Overtime is paid at 1.5x the regular hourly rate. For salaried employees, the regular hourly rate is calculated by dividing the amount earned in a week by the number of non-overtime hours worked in that week.
Exemption for Managers and Supervisors
Exemptions from the overtime rules can be found in O. Reg. 285/01, a regulation under the Employment Standards Act, 2000 (“ESA”).
The exemption for managers and supervisors applies to the following employees:
“a person whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis”
The fact that an employee’s title is “manager” or “supervisor” is not determinative, and the actual functions of the employee must be assessed. The exemption does not apply to managers or supervisors who perform non-supervisory or non-managerial tasks as part of their regular duties and not on an irregular or exceptional basis.
For non-managerial tasks to be “irregular or exceptional” they must be unscheduled or sporadic, and/or performed outside of the ordinary course of the employee’s duties. For instance, if a manager is required to perform non-managerial tasks because another employee called in sick, or because of an unexpected rush of circumstances, those tasks are irregular or exceptional. On the other hand, if the manager is required to perform non-managerial tasks on a predictable schedule, for instance every Monday from 9:00 a.m. to 11:00 a.m., that will be part of their regular duties.
Career Breakthrough Inc. v. Robyn R Vanderfeyst
In the recent decision of the Ontario Labour Relations Board (“OLRB”) of Career Breakthrough Inc. v. Robyn R Vanderfeyst, the OLRB considered whether the exemption applied to a managerial employee. The employer acknowledged that the employee performed non-managerial or non-supervisory tasks but argued that such tasks were all related to her role as a manager.
The OLRB determined that the employee performed non-managerial or non-supervisory tasks on a regular basis, which was not “irregular or exceptional”. Therefore, the exemption did not apply, and the employee was awarded overtime pay.
What about the 50% Rule?
There is a common misconception that a manager/supervisor will not be entitled to overtime pay if their non-managerial and non-supervisory duties make up less than 50% of their working time.
In fact, the proportion of time performing such tasks is not the determining factor, and the overtime exemption will not apply if the employee performed non-managerial or non-supervisory tasks on a regular basis, even if those tasks constituted a small proportion of their overall duties.
The source of this misconception is section 22(9) of the ESA, which provides that where an employee is required to perform:
- work that is exempted from overtime rules (“exempt work”); and
- other work that is not exempted from overtime rules (“non-exempt work”),
then overtime will be payable for any week in which the non-exempt work constitutes more than half of the employee’s working time.
However, section 22(9) does not change the overall rule that work is not exempted from overtime if it includes non-managerial or non-supervisory tasks on a regular basis.
The interaction between these two rules was considered by the OLRB in the decision of Glendale Golf & Country Club Ltd. v. Sanago. In that case, a restaurant manager was required to perform a significant amount of non-managerial tasks due to a crisis in the kitchen. Despite that crisis lasting two months, the OLRB found that the non-managerial tasks were performed on an exceptional basis, and thus the exemption applied.
However, there was a period of time that the non-managerial tasks (which were performed on an exceptional basis) constituted more than 50% of the employee’s working time. The OLRB found that for those weeks, based section 22(9) of the ESA, the employee was entitled to overtime pay for any hours worked in excess of 44 hours.
Importantly, if the OLRB had determined that the non-managerial tasks were performed on a regular basis, then none of the employee’s work would have been considered “exempt work”, and the 50% rule at section 22(9) of the ESA would not be applicable. The employee would have been entitled to overtime pay, regardless of the proportion of time spent on the non-managerial tasks.
Conclusion
Just because an employee has “manager” in their job title, does not mean that they are exempt from overtime rules. The exemption for managers or supervisors is not as broad as many people believe.
If you are an employee that is denied overtime pay, we can help you determine your entitlements and a strategy for enforcing your rights.
If you are an employer we can help you avoid unexpected liability, and we can assist in instituting averaging agreements to minimize your overtime pay obligations.
If you have any questions about your situation or if you would like to get legal advice, please feel free to contact us.
