Overtime for managers, supervisors explained

By Ellen Low

Law360 Canada (October 25, 2023, 2:27 PM EDT) --
Ellen Low
Ellen Low
Managers and supervisors are typically exempt from overtime pay pursuant to the Employment Standards Act, 2000 (ESA) “if the work they do is managerial or supervisory,” but there is much more to the analysis than many realize.

Just because an employee has the word “manager” or “supervisor” in their title, does not mean they will never be entitled to overtime. There is a whole host of criteria to review as well as different cases to consider.

Across different industries and all levels of employment, people seem to be under the impression that managers and supervisors are never entitled to overtime. But it is certainly not a hard and fast rule and, instead, requires some additional analysis based on an employee’s actual managerial status, the tasks they are assigned and how often those tasks are being performed before determining if they fit into the ESA overtime exceptions.

Ontario workers are typically entitled to overtime pay — sometimes colloquially referred to as time and a half — of 1.5 times their normal rate of pay for every hour worked in excess of 44 hours in a single week unless there is a contract to the contrary that bargains for a lower overtime threshold, or, alternatively if the worker is subject to what is called an averaging agreement.

There are many employees who are excluded from statutory overtime pay, including lawyers, accountants, IT professionals and engineers, but there are some surprising and specific, exceptions, including, for example, mushroom farmers.

With respect to the exception for managers and supervisors, there is a multipart test, looking not only at the employee’s role, but the work they are doing, and how often they are doing it.

A manager or supervisor may perform other tasks and duties along with their managerial or supervisory roles. If so, then the question becomes whether those tasks are done so on an irregular or exceptional basis.

There is also some flexibility built into the ESA allowing employees to have multiple jobs where they do two or three different types of work. Some of that work may specifically be exempt from overtime but other parts may be eligible.

There is not that much jurisprudence on the issue, but what is available includes Glendale Golf and Country Club, Ltd., [2010] O.E.S.A.D. No. 76 wherein the Ontario Labour Relations Board (OLRB) was told Massimo Sanago was employed as head chef in Hamilton.

His job “was to supervise and administer all phases of kitchen operations including food selection and purchase as well as the supervision of subordinates and coordination of the kitchen service with other departments,” as the evidence showed.

However, he also worked overtime when assuming the duties of kitchen workers during staff shortages. Based on his records, the man said he spent more than 55 per cent of his time doing non-supervisory duties.

The OLRB stated the ESA overtime exemption can apply even if the manager or supervisor sometimes performs non-managerial or non-supervisory duties.

However, the OLRB found that “the significant quits/firings of the kitchen staff, which occurred at the commencement of Sanago’s employment, placed the executive chef in such a position that he had no alternative but to regularly perform the day-to-day duties of non-supervisory/non-managerial employees in order to keep the kitchen operational.”

Those duties could not “be characterized as ‘irregular,’” according to the OLRB, who awarded $9,443 in overtime and associated vacation pay.

Conversely, in Tsakiris v. Deloitte & Touche LLP [2013] O.J. No. 2905, the Ontario Superior Court expressed the test to establish if someone is entitled to overtime as a two-step inquiry:

1. there must be a determination of whether the “character” of the employment is managerial or supervisory;

2. if the answer to the first question is yes, there must be a determination of whether the individual performs non-managerial or non-supervisory tasks, and, if yes, whether these tasks are done on an irregular or exceptional basis.

In that case, the court found despite the fact that the plaintiff was performing non-managerial duties such as drafting memos and performing secretarial work, on the balance of probabilities those duties did not change the character of his overall employment. Therefore, he was not entitled to overtime.

Employees should seek clarification if they have questions about overtime entitlements. The cases can be lucrative if the employee has been performing unpaid overtime for a period of time.

Those who are contemplating pursuing an overtime claim should be documenting their hours. They should also put their questions to employers in writing and keep records.If it is in writing, such as an email, there is a proof of what was discussed. With a conversation, people tend to only remember the part of the agreement that they prefer.

Further, workers should not be afraid to ask questions about overtime and their entitlements. Pursuant to  ss. 74(1) of the ESA, “no employer or person acting on behalf of an employer shall intimidate, dismiss or otherwise penalize an employee” who is seeking to uphold their workplace rights.

In summary, overtime entitlement can be a murky issue and determining what is considered irregular and non-exceptional duties may require a deep dive into eligibility requirements.

Receiving a third-party assessment about whether the work being performed is subject to the exemption or whether there may legitimately be a claim in accordance with the ESA can be invaluable. Remember, simply holding the title manager or supervisor is not enough to dispositively obviate an entitlement to overtime.

Ellen Low has been working exclusively in employment and human rights for over a decade. She obtained her law degree from the University of Ottawa, articled at Gowlings and practised as a partner with a boutique Toronto employment law firm and founded her own firm, Ellen Low & Co. Employment Law, in 2018.

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