Casual Legal: Overtime or time off with pay?

By Andrew Skeith
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

Most employers, including municipalities, are subject to the requirement to pay overtime pay (meaning, pay at 1.5 times the employee’s regular wage rate) when an employee works “overtime”.

Overtime is defined in the Employment Standards Code, RSA 2000, c E-9 as being:

  1. The total of an employee’s hours of work in excess of eight (8) on each work day in the work week, or
  2. An employee’s hours of work in excess of 44 hours in the work week,

whichever is greater.

However, there may be situations in which an employer requires an employee to work a large amount of overtime seasonally, or at specific times in the year. Instead of paying those employees excessive amounts of overtime, a good option is for the municipality to enter into an overtime agreement with those employees. Such an agreement allows the municipality to provide the employee with time off with pay instead of overtime pay whenever those employees work “overtime”.

Overtime agreements can be entered into with individual employees, or a group of employees that meet a certain description, and the overtime agreement will then bind future employees who fall into that group.

All overtime agreements are deemed to include certain terms, most significantly that any time off with pay provided to employees in lieu of overtime pay will be “provided, taken, and paid at the employee’s wage rate at a time that the employee could have worked and received wages from the employer”. Employees are also required to take the time off with pay within 6 months of the pay period in which it was earned, failing which the employer is obligated to pay those employees for their overtime hours as “overtime”, meaning 1.5 times their regular wage rate.

A caution: these overtime agreements must be drafted properly, or they are not only ineffective but may be in breach of the municipalities’ obligations under the Employment Standards Code.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or send an riskcontrol [at] (email) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.