the federal jurisdiction overtime pay.

What the Canada Labour Code says about hours and overtime

Federal overtime comes from Part III of the Canada Labour Code, and the wording is short enough to read in full. Section 169 sets the standard hours of work at eight hours in a day and forty hours in a week and says an employer shall not cause or permit longer hours except as the Division allows. Section 174 then says that when an employee is required or permitted to work overtime, they are entitled to be paid at not less than one and one-half times their regular rate of wages, or to be granted at least one and one-half hours of paid time off for each overtime hour, under the conditions in the section.

Two worked examples

Long days, short week. You work four 10-hour days (40 hours) at $30.00 an hour. The weekly total never passes 40, but each day is two hours over the daily standard, so there are 8 daily overtime hours. Pay is 32 regular hours × $30.00 = $960.00 plus 8 overtime hours × $45.00 = $360.00, for $1,320.00.

Normal days, extra Saturday. You work five 8-hour days and a 6-hour Saturday (46 hours). No single day is over eight hours, but the week is six hours over forty. Pay is 40 × $30.00 = $1,200.00 plus 6 × $45.00 = $270.00, for $1,470.00. The calculator on this page pays the greater of the daily and weekly overtime totals rather than adding them.

Maximum hours, averaging and modified schedules

Overtime is not the same as the legal maximum. Section 171 caps the total hours that may be worked in a week at 48, or fewer if regulations set a lower maximum for the establishment. Three mechanisms let the pattern of hours depart from the 8-and-40 rule:

• Averaging (s. 169(2)). Where the nature of the work needs an irregular distribution of hours, the daily and weekly hours may be calculated as an average over two or more weeks, in the way the regulations prescribe. Without a union agreement, averaged hours last no longer than three years.
• Modified work schedules (s. 170). An employer can set a schedule that exceeds the daily standard if the average for two or more weeks does not exceed forty hours a week, and the schedule is agreed in writing: with the union where there is a collective agreement, or with the employee (or at least 70% of the affected employees) where there is not. A notice must be posted at least thirty days before a new schedule takes effect.
• Higher maximum schedules (s. 172). Hours can exceed the section 171 maximum only if the average over two or more weeks does not exceed forty-eight a week, with the same written approval and thirty-day notice.

Weeks that contain a general holiday

Section 169(3) has a rule most people miss. In a week in which a general holiday occurs that entitles the employee to a paid holiday, the employee’s hours of work in that week are reduced by the standard hours for each holiday, and hours worked on the holiday are not counted in the week’s total. In practice, a week with one paid general holiday has a lower overtime line than an ordinary week, and the holiday hours are dealt with through general holiday pay instead. If your hours look wrong in a holiday week, this is usually why. The calculator does not model that adjustment; enter the week as the Code treats it.

Time off instead of pay

Section 174 allows paid time off in place of overtime pay only under a written agreement made at the employee’s request. The time off must be taken within three months after the end of the pay period in which the overtime was worked, or within a longer period set by a collective agreement or by the written agreement. For an employee not covered by a collective agreement, the longer period cannot exceed twelve months. Unused time off must be paid out as overtime at 1½ times the regular rate within 30 days after the period ends, or within 30 days after employment ends.

Who is covered, and what this page is not

Part III applies to employment in or in connection with a federal work, undertaking or business, and to the employees and employers involved. It excludes local or private works in the three territories. Division I (hours of work) does not apply to managers, superintendents or employees who exercise management functions, or to members of professions designated by regulation. The majority of employees in Canada are covered by provincial rules instead, so check which jurisdiction your employer falls under before using this page.

The tool gives gross pay for a week. It does not take off tax, CPP or EI, and it does not model any tax treatment of overtime; for take-home pay use the paycheque calculator. For provincial comparisons see overtime by province, including Ontario and Alberta.