Overtime Averaging Report Review

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

On February 18, 2005, the Labour Standards Division of the Nova Scotia Environment and Labour Department tabled their report Averaging Review which includes three recommendations on the flexibility of managing overtime hours in the province for consideration. The government wanted to assess the impact of averaging overtime for all employees and employers following changes that were made to the Labour Standards Code in Nova Scotia in 2003, which improved overtime benefits for workers. It permits employees who are required to work more than 48 hours a week to be entitled to overtime pay for the extra hours worked, at a rate of not less than one and a half times the regular wage rate. The regulatory changes extended the workweek from 48 to 55 hours in the road building and construction industry. It also allowed workers in that industry to average their overtime hours over two weeks.

On December 12, 2003, the government implemented new averaging rules for the construction and property maintenance industries. The new rule applies to a broader range of workers and includes construction workers, road builders, snow removal workers, and sawmill workers and allows employees to work a maximum of 110 hours within two consecutive weeks at the regular rate of pay. For hours worked over the maximum, the employee is paid a minimum of 1 1/2 times his or her regular hourly rate. In order to offset an unintended impact, the government increased the overtime threshold for these industry sectors by 14 hours over a two-week period.

The review addressed two specific questions:

* Should changes be made to the averaging provision for the construction and property maintenance industry?

* Should averaging be extended to other industries?

The review concluded and recommended that:

* There should not be any changes to the averaging provision for the construction and property maintenance industry. The current averaging provisions of 110 hours over two weeks for construction and property maintenance sectors should be maintained;

* There should be flexibility for employees to use averaging where there is a greater benefit to the employee in the form of an extended period time off. Thus, the averaging provision should be extended to workplaces where there is a pre-determined, fixed cycle of work that repeats over a specific period of time, provided that the average hours worked does not exceed 48 per week; if the average hours exceeds 48 than overtime is payable.

* Apart from the above circumstances, the review does not recommend extending any form of the averaging provision to other industries. This is because members of the review found no conclusive arguments that such an extension would be favourable for the employee as in the above circumstances.

As indicated in the report, the averaging provision in workplaces where there is a pre-determined, fixed cycle of work that repeats over a specific period of time have to have a cycle of work weeks scheduled in advance. The schedule must show all the workweeks that make up the cycle, the maximum number of hours of work that an employee may be scheduled to work in a day, and the maximum number of work hours that an employee may be scheduled to work in a week. Specifically, an employer may institute a work schedule that provides for a regular schedule of hours (for example 12 per day) and shift cycle (for example 5 on and 5 off). The cycle must repeat itself over a period of time.

To view the report for additional information, click here (in PDF format). The government has released the following document explaining how a fixed cycle averaging agreement should work and the requirements. The document can be accessed by clicking here.

By Yosie Saint-Cyr, Editor at HRinfodesk

Published on HRinfodesk---Canadian Payroll and Employment Law

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