According to Alberta’s Employer Standards Code (ESC), overtime is defined as all hours worked over 8 hours a day or 44 hours a week, whichever is greater. This is known as the 8/44 rule. Overtime hours and overtime pay are two of the top concerns for employers and employees in Alberta. This is what employers need to know about overtime in order to comply with the ESC.
Calculating Overtime Pay
Overtime pay in Alberta is 1.5 times the employee’s regular wage rate for all overtime hours worked. The Employment Standards Code states that this can differ if an employer and employee have a written overtime agreement that states otherwise.
Alberta employers and employees may enter into overtime agreements other to what is stated in the ESC. Employees may accept banked time, which is paid time off work, instead of overtime pay. However, banked time should be at a rate of 1.5 hours for each overtime hour worked. Employees must use any banked overtime within 6 months of the end of the pay period in which they earned it unless the agreement states otherwise.
Employment Termination and Overtime
If an employer or employee decides to terminate employment by giving written notice, overtime comes into play. Employers cannot require employees to use any outstanding banked overtime during the notice period unless both parties agree to this. If overtime is calculated according to the 8/44 rule, hours worked or banked overtime taken cannot exceed 8 hours a day or 44 hours a week during the notice period. Whether or not notice of termination was provided, any banked overtime not provided or taken by the last day of employment must be paid out at 1.5 times the employee’s regular pay rate.
Overtime Minimum Standards
If an employee or employer enters an overtime agreement, it must meet the minimum overtime standards outlined in the Employment Standards Code. Alberta employers cannot:
- Pay an employee less than the minimum wage rate
- Provide employees with less than other minimum entitlements
- Require employees to work hours in excess of their maximum allowable hours
Any employer that fails to comply with the minimum standards outlined in the ESC or tries to get an employee to enter an agreement that does not meet the minimum standards is failing to comply with the law. Alberta employers could face serious consequences if they fail to meet the overtime hours and overtime pay regulations of the Employment Standards Code. Make sure you are complying with all relevant regulations by contacting one of our HR experts!