Overtime & Overtime Pay

What is Overtime?

Except as noted below, overtime is all hours worked in excess of:

• eight hours a day, or
• 44 hours a week.

Overtime hours are to be calculated both on a daily and on a weekly basis. The higher of the two numbers is overtime hours worked in the week.

All employees, including those who are paid a weekly, monthly, or annual salary, must be paid overtime pay for overtime hours they work.

Industries with Different Overtime Rules

A number of industries and occupations are subject to variations in daily and weekly hours worked before overtime is payable.

How is Overtime Paid?

Overtime must be paid at the rate of at least 1.5 times the employee's regular wage rate. The sole exception applies where the overtime is accumulated under an overtime agreement.

Employees, who are paid exclusively by incentive pay such as commission, piecework or a similar method, have no established rate of pay. Therefore, for the purpose of calculating overtime entitlements the wage rate is deemed to be the minimum wage. If the incentive pay is less than what would have been earned applying the minimum wage, the employer must top up the incentive pay earnings.

If an employee is paid by a combination of salary and incentive pay, and the salary is greater than minimum wage, the salary establishes the hourly rate for the purpose of calculating overtime entitlements.

Overtime Agreements

Some employers and employees agree to replace overtime pay wholly or partly with time off with pay. This is done through the use of an overtime agreement.

An overtime agreement allows overtime hours to be banked and later taken off with pay, hour for hour, during regular work hours. There are a number of rules that apply with respect to overtime agreements:

• The agreement can be between an employer and a single employee or with a group of employees, or the overtime agreement can be part of a collective agreement.
• Overtime hours are calculated the same way under an overtime agreement as it would be if overtime pay is to be paid at time-and-a-half.
• The Code requires an overtime agreement to be in writing. Employers must give employees who are covered by an overtime agreement a copy of the agreement.
• Time off must be taken within three months of the end of the pay period in which the overtime was earned.
• If time off is not taken, overtime hours must be paid out at time-and-a-half.

Sample Overtime Agreements

Document Title and Description	Date (dd/mm/yy)	Format
Overtime Agreement Sample overtime agreements are found at the end of this fact sheet	19/06/09