Time Off in Lieu of Overtime: 3 Things You Need To Know

Time Off in Lieu of Overtime: 3 Things You Need To Know

An increasing number of employers resort to providing employees with time off for the hours they work overtime, instead of paying them overtime pay. Employees may have questions about when they may receive this benefit and the rules associated with it. Here are three things you need to know regarding time off in lieu of overtime. 

  1. What is time off in lieu of overtime?

The Employment Standards Act provides that an employee may be compensated for the hours they work overtime by receiving one and one-half hours of paid time off work for each hour they work overtime, instead of being paid overtime pay. For most employees, this means that they can receive one and one-half hours of paid time off for each hour they work in excess of 44 hours in the work week. Some jobs have an overtime threshold that exceeds 44 hours in a work week, or do not provide for the right to overtime pay, as reported in the Guide to employment standards special rules and exemptions. This applies to every employee working in Ontario, except for employees under federal jurisdiction such as employees working for banks, telecommunication companies, transportation companies, postal services, and most federal Crown corporations. 

  1. Can an employer force you to take time off instead of paying you overtime?

No. Subsection 22(7)(a) of the Employment Standards Act expressly provides that time off in lieu of overtime is only allowed if both the employee and the employer agree to it. This means that an employer cannot refuse to pay overtime pay and impose time off in lieu of overtime if the employee does not agree to it. 

However, this is also means that an employee cannot decide on their own to work hours in excess of the overtime threshold in hopes of receiving additional time off work. For an employee to be compensated with time off for the hours they work in excess of the overtime threshold, both the employer and the employee must agree to it.

  1. When does time off in lieu of overtime expire?

By default, when an employee and an employer agree that an employee will be compensated with time off work for the hours they work in excess of the overtime threshold, the paid time off work must be taken within three months of the work week in which the overtime was earned. There is one exception. The paid time off work can be taken within 12 months of the work week in which the overtime was earned if the employer agrees to it. 

If the employee’s job ends before they were able to take the paid time off in lieu of overtime, the employer is required to pay overtime pay to the employee for their unused banked time off. The employer must do so no later than seven days of the date on which the employee’s job ended, or on the day that would have been the employee’s next pay day. 

We are here to help. If you have questions about your right to overtime pay or time off in lieu of overtime, or any other term in your employment contract, consult our experienced employment lawyers at RavenLaw LLP. Please call 613–567–2901 or email [email protected] to consult one of our experienced employment lawyers.

[This article is for informational purposes only and is not legal advice, which cannot get given without consideration of your individual circumstances.]

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