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THE QUESTION
I work for a financial institution. I am salaried and am not paid any commissions. While my job title includes the word “manager”, I do not manage any employees and all of my work product requires sign-off from supervisors with a higher authority. I don’t do shift work and am not required to start or end my work at a particular time, but I am required to fill out a timesheet and work 37.5 hours per week.
I sometimes need to work overtime to complete my work. However, I have been told that I am not eligible for additional pay or time off because my base salary is expected to compensate for all hours worked. Is it valid for employees like me to be exempt from overtime compensation requirements?
THE FIRST ANSWER
Jaspreet K. Mann and Sarah Ewart, Forte Workplace Law, Surrey, B.C.
The answer largely depends on your role and the financial institution you work for. Banks are federally regulated, as are some credit unions, while some other financial institutions are provincially regulated. The Canada Labour Code (the “Code”) applies to federally regulated employers and the Employment Standards Act (the “Act”) to provincially regulated employers within British Columbia. In either case, most employees are entitled to statutory overtime pay.
However, both the Code and the Act exclude “managers” from statutory overtime pay. Whether you are a manager is not determined solely by your job title; it depends on your actual duties and responsibilities. The criteria for this assessment differs depending on whether your workplace is federal or provincial.
Under the Code, a manager must have significant autonomy, discretion and authority over how the employer’s business is carried out. Under the Act, the focus is on whether you supervise or direct people or other resources and have authority to make decisions such as hiring, disciplining or approving leave. If you lack this authority or do not manage people or resources, you may not be a “true” manager and may be entitled to statutory overtime pay.
Even if you are a “true” manager, it is a common misconception that a manager’s salary automatically covers all hours worked. Depending on the language of your employment contract, you may be entitled to straight-time pay for hours worked beyond what your salary was intended to cover.
Finally, other exclusions may apply. For example, if you are a licensed trader or “fund manager” under the Securities Act, you are excluded from the Act altogether and your entitlement to overtime pay would depend on your contract.
THE SECOND ANSWER
Tareq Shahwan, employment lawyer, Randy Ai Law Office, Toronto
Legislation varies between provinces, but under Ontario employment law, the word “manager” in your title is not determinative. What matters is what you actually do.
The Employment Standards Act, 2000 (“ESA”) entitles most employees (with exceptions) to overtime pay at 1.5 times their regular rate for every hour worked beyond 44 hours in a week. Being salaried does not change this, as the salary is simply converted to an hourly rate for the purpose of calculating overtime. An employer cannot contract out of this minimum standard. Accordingly, a clause stating that your salary “compensates all hours worked” is unenforceable to the extent it attempts to waive ESA overtime rights, unless you genuinely fall within an exemption.
The managerial exemption under that regulation is narrow. It applies only to a person whose work is supervisory or managerial in character and who performs non-supervisory or non-managerial tasks only on an irregular or exceptional basis. Decision-makers look at the substance of the role, not the title. Relevant factors include authority over hiring, firing, discipline, supervision, scheduling, performance management and independent operational decision-making. From what you describe, you supervise no one and every aspect of your work requires sign-off from someone above you. That is inconsistent with managerial authority.
An employee is also not required to seek permission before working additional overtime hours. Rather, if an employer wishes to avoid liability for overtime premiums, it must take active steps to intervene and prevent the overtime from being worked. Where the employer knows, or ought to know, that an employee is working overtime and fails to take reasonable steps to stop it, the employee must be paid the applicable overtime premium.
Finally, keep detailed records of your hours and speak to an employment lawyer if you would like legal advice. You may be owed significant back pay, and the ESA allows recovery.
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