Think Your Employees Can Waive Their Right to Overtime? Think Again

Overtime may seem like a simple concept, but when you start flipping through the rules, you may find it is actually quite complex. Employers often make mistakes when it comes to overtime rules.

In Saskatchewan, overtime is governed by The Saskatchewan Employment Act (the “Act”), which sets out requirements for when employers must pay an employee overtime. As a general rule, employers are required to pay employees who are eligible for overtime 1.5 times their hourly wage if they require or permit an employee to work overtime. An employee is to receive overtime pay when they work more than eight hours in a day or more than 40 hours in a week (whichever is greater). The weekly overtime threshold reduces to 32 hours in a week with a statutory holiday.

Mistake #1: Thinking an Employee Can Waive Their Right to Overtime

One of the most common mistakes employers make is thinking an employee can waive their right to overtime.

An employee cannot agree (verbally or in writing) to work for straight pay when they would otherwise be entitled to overtime. As with other minimum standards under the Act such as minimum wage, vacation entitlements and scheduling requirements, an employee cannot waive this right. Any attempt to waive this right is invalid and an employee is entitled to the overtime owed.

Mistake #2: Assuming that salaried employees are exempt from overtime

There is a common misconception that salaried employees are exempt from overtime. Unless they are considered a managerial or professional employee or fall within another exemption, salaried employees are entitled to overtime pay. There are no exemptions in legislation for salaried employees simply because they have a weekly or monthly salary instead of an hourly wage.

Mistake #3: Choosing to give paid time off instead of overtime pay

Often, employers give an employee paid time off in lieu of overtime. This is not permitted unless the employer has entered into an overtime bank agreement with each employee in writing. This agreement allows an employee to “bank” overtime worked and receive time off with pay during their regular scheduled work shifts within a 12-month period from when the overtime was worked. For each hour of overtime worked, the employee is credited with 1.5 hours of time off with pay.

Without a banked overtime agreement, providing employees time off in lieu of overtime is not in strict compliance with the Act, even though it is often done, and banking overtime at straight time is clearly not in compliance with the Act.

Learn More at Our Saskatchewan Employment Law Webinar

To learn more, join on us on January 19, 2023, for our SK Top 10 Employment Law Topics Every Employer Should Understand webinar, which will include a presentation on common overtime mistakes and how they can be avoided. We will cover overtime exemptions, overtime bank agreements, modified work arrangements and other important topics. To learn more about the webinar and to register, visit our event page.

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Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.