Treatment of Overtime

HRinfodesk---Canadian Payroll and Employment Law, March 2005

In Alberta, under the Employment Standards Code, overtime is treated on a daily and/or weekly status. Overtime must be paid to all employees (regardless if they are paid a weekly, monthly, or annual salary except if they are exempt) on hours worked in excess of eight hours a day or 44 hours per week, whichever is greater (the higher of the two numbers is overtime hours worked in the week). The overtime rate is 11/2 times an employee’s regular rate of pay unless the employer and employee have entered into an overtime agreement. Some industries have different overtime daily and weekly hours for the purpose of calculating overtime pay.

Employees who are exempt from overtime and overtime pay:

• employees on a farm or a ranch
• domestic employees
• various types of salespersons
• professionals such as real estate brokers, and licensed insurance and securities salespersons
• architects, engineers, lawyers, psychologists and information systems professionals
• managers, supervisors and those employed in a confidential capacity
• licensed land agents
• instructors or counselors at a non-profit educational or recreational camp
• extras in a film or video production
• employees covered by other acts (academic staff)
• municipal police officers

Industries with different overtime threshold (chart provided by the Alberta Department of Human Resources and Employment):

Employees paid by incentive, commission, piecework and other methods

Employees paid exclusively by incentive pay such as commission, piecework or a similar method, have no established rate of pay. As a result, for the purpose of calculating overtime entitlements, the wage rate is deemed to be the minimum wage. If the incentive pay is less than what would have been earned applying the minimum wage, the employer must top up an employee’s incentive pay earnings. If an employee is paid by a combination of salary and incentive pay, and the salary is greater than minimum wage, the salary establishes the hourly rate for the purpose of calculating overtime entitlements. For additional information, read the following fact sheet (in PDF format).

Overtime agreements

Employers and employees may also create their own written overtime agreement. This agreement allows overtime hours to be banked and later taken off with pay, hour for hour, during regular work hours. The agreement can relate to all overtime pay or part of it. Overtime hours can be banked for a period of 3 months. Banked time not taken within the 3 month period must be paid out at time-and-a-half. There are a number of rules that apply with respect to overtime agreements. For more information on Banking overtime, read Alberta Bank Time Provisions (requires registration).

Averaging of hours

There are no specific provisions for averaging overtime hours under the Alberta Employment Standards Code.

General Holiday (Public/Statutory Holiday)

Hours worked on a general holiday and paid at 1.5 times the regular wage are not used in computing either daily or weekly overtime. However, when employees do not qualify for the general holiday or if they are given another work day off with pay in lieu of working on the general holiday, the hours are counted for the purpose of calculation overtime.

By Yosie Saint-Cyr, Editor at HRinfodesk

Published on HRinfodesk---Canadian Payroll and Employment Law

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