Canadian Payroll Reporter

5 Canadian HR Reporter, a Thomson Reuters business 2016 Banking overtime hours QUESTION: Our employees are allowed to "bank" their overtime hours so they can take time off work with pay at a later date. For banking their hours, do we use the actual number of overtime hours worked? When they take the time off, do we pay them their regular rate or the overtime rate? ANSWER: Most jurisdictions in Canada allow employers to set up an overtime bank if their employees agree to it in writing or if it is part of a collective agreement. Instead of paying employees for over- time hours, employers may allow employees to "save" their overtime hours in a time bank and take the time off with pay at a later date. Jurisdictions that include provisions for overtime banks in their labour standards laws include Alberta, British Columbia, Mani- toba, Newfoundland and Labrador, Northwest Territories, On- tario, Prince Edward Island, Quebec, Saskatchewan and Yukon. Other jurisdictions may allow employers to establish time banks even though the banks are not covered under labour standards law. Check with the applicable board for more information. In most jurisdictions that have legislated minimum standards for overtime banks, employers are required to credit an employee' s time bank with 1.5 hours of time for each hour of overtime the employee works. Exceptions apply in Alberta, where time is banked at one hour for one hour of overtime. Exceptions also apply in British Columbia, where the number of hours banked for an hour of overtime depends on the legislated overtime rate that applies. For example, the rate is 1.5 hours of banked time for each hour of overtime if an employee works more than eight hours a day or 40 hours a week. However, if the employee works more than 12 hours a day, the rate increases to two hours of banked time for each hour worked in excess of 12 hours. When employees take the time off, employers are expected to pay them their regular wage rate for the hours taken off.* *Note: Ontario's Employment Standards Board says that if an employee's wage rate changes between the time an employee banks overtime hours and takes the hours off work, the employer must pay the employee the rate he is earning when he takes the time off rather than the rate that applied when the employee worked the overtime. CPR | May 2016 MANAGER OF CARSWELL'S PAYROLL CONSULTING GROUP annie.chong@thomsonsreuters.com | (416) 298-5085 Annie Chong ASK AN EXPERT Time limit for using banked hours QUESTION: Are employees required to use hours saved in an overtime bank within a certain amount of time or can they save them indefinitely? ANSWER: Most jurisdictions that have legislated rules for overtime banks require that employees take off the saved time with- in a specified period: Alberta: An employee must take the time off within three months of the end of the pay period in which the employee earned it, otherwise the employer must pay the em- ployee overtime pay (at at least 150 per cent of the employee's wage rate) for the over- time hours worked. Exceptions apply where a longer period is allowed under a permit from the employment standards director or a collective agreement that includes an overtime agreement. British Columbia: The Employment Stan- dards Act does not specify a maximum pe- riod for saving the hours. Manitoba: An employee must take the time off within three months after the end of the pay period in which the overtime occurs or within a longer period if approved by the director of employment standards. If the employee does not take off the banked time within the required period, the employer must pay the employee for the time remain- ing in the time bank at the employee's regu- lar wage rate. Newfoundland and Labrador: An em- ployee must take the time off within three months of working the overtime or, if the employee agrees, within 12 months of work- ing it. If the employee does not take off the banked time within the required period, the employer must pay the employee the over- time rate for the unused hours. Nothwest Territories: Employees must take off the time within three months af- ter the end of the pay period in which they earned it, unless a collective agreement pro- vides for a longer timeframe or the employ- ment standards officer authorizes a longer period. If the employee does not take off the time within the required period, the em- ployer must pay the employee overtime pay for the time remaining in the overtime bank. Ontario: Employees must take the time off within three months of working the over- time or, with the employee's written agree- ment, within 12 months of working it. If the employee does not take off the banked time within the required period, the employer must pay out any outstanding time in the time bank as overtime pay. Prince Edward Island: The employee must take the time off within three months of earning it. If the employee does not do this, the employer must pay any outstanding time in the time bank as overtime pay. Quebec: The employee must take the time off within 12 months of working the over- time. If the employee does not do this, the employer must pay the remaining amount as overtime pay. Saskatchewan: Employees must take the time off within 12 months of banking it. If the employee fails to do this, the employer must pay out any remaining banked over- time at the employee's regular wage rate. Yukon: Employees must take the time off within 12 months. If the employee does not do this, the employer must pay any outstand- ing time in the time bank as overtime pay. Credit: sergign/Shutterstock

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