Know your rights: Overtime pay – Jasper Employment and Education Centre
Our Centre fields many questions regarding both workplace and housing issues. In efforts to keep seasonal and permanent workers informed on their rights, the Fitzhugh has partnered with the Jasper Employment & Education Centre to delve into the rights of both employees and employers in a bi-monthly column, in which Ginette Marcoux will answer some of the questions frequently asked at the JEEC.
Question: What are the rules for overtime pay? Can an employer bank overtime pay?
Answer: Overtime is all hours worked over eight hours in a day or 44 hours in a week, whichever is greater. This is referred to as the 8/44 rule. It is important to note that the rule of overtime applies even when an employee is working in other departments, under Labour Legislation, it is recognized as the same employer.
Basic pay rate
Except where there’s a written overtime agreement, an employer must pay an employee overtime pay of at least 1.5 times the employee’s regular wage rate for all overtime hours worked.
Sometimes, instead of paying overtime pay, an employer may give an employee time off work with pay (banked overtime) as part of a signed overtime agreement between the employer and employee.
Employees must use up banked overtime within three months of the end of the pay period in which they earned it, unless a special permit issued by the Director of Employment Standards allows the overtime banking period to be extended.
• No amendment or termination of the agreement is to be effective without at least one months’ written notice given by one party to the agreement to the other.
• It is important to note, that effective Jan 2018 any overtime banked will be paid out at 1.5 x hourly wage.
Change of ownership
When a business changes ownership, it doesn’t affect an employee’s overtime benefit entitlement. The previous owner must pay all overtime pay accumulated up to the date of transfer of ownership, and the new owner must grant any banked overtime.
Overtime owed at termination
When either the employer or employee ends the employment relationship by giving a written notice of termination, the employer can require the employee to use up some or all outstanding banked overtime during the notice period.
Whether or not any notice of termination was provided, any banked overtime not provided and taken with pay by the end of the last day of employment must be paid out at 1.5 times the employee’s regular rate of pay at the time it was earned.
The following employees aren’t eligible for overtime hours and overtime pay:
• managers, supervisors and those employed in a confidential capacity
• licensed salespersons of real estate and securities
• licensed insurance salespersons who are paid entirely by commission income
• counselors or instructors at an educational or recreational camp that is operated on a charitable or not-for-profit basis for children, persons with disabilities, or religious purposes
• domestic employees (rest periods and days of rest legislation still apply).
For more detailed information: work.alberta.ca/employment-standards.
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