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Can an employer ask me to sign an overtime agreement?

Yes. The Employment Standards Act (ESA) has rules about overtime. And the normal ESA rules that apply to most workers are that the hours they work over 44 hours a week are overtime hours.

But an employer can ask you to sign an agreement that has rules that are different than the normal rules in the ESA.

An employer could ask you to agree to:

  • take paid time off instead of getting overtime pay
  • "average" your overtime hours

Agreeing to paid time off

You can agree to get overtime as paid time off instead of overtime pay. This means you get 1 ½ hours (one hour and 30 minutes) of time off for every hour of overtime that you work.

You must get this time off within 3 months of the week in which you earn it. This does not apply if you sign an agreement with your employer to get the time off within 12 months.

Agreeing to "average" overtime

You can agree to have your overtime "averaged". This means you get overtime on the average number of overtime hours you work during a period of 2 weeks or more, not the actual number of overtime hours you work in each week.

Employers use averaging agreements to avoid paying overtime. If you sign an averaging agreement, you get less for your overtime.

Rules about overtime averaging

Your employer has to apply to the Director of Employment Standards at the Ministry of Labour for approval to average overtime hours.

Your employer must post their application and the Ministry’s approval where workers can see them. But before they can go ahead with averaging, they need your agreement.

An overtime agreement must be in writing and should be dated and signed by you or your union and your employer.

An agreement to "average" overtime must also:

  • include a date when it ends
  • not be for more than 2 years
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Consider your options if asked to sign an agreement

You don't have to sign an agreement. But if you're applying for a job and won't sign, the employer might decide not to hire you.

If you're already in the job, it's against the law for an employer to punish you or fire you if you refuse to sign an agreement.

But some employers don't follow the law. And if you're punished or fired, you will need to find out what you can do to take action against the employer. If this happens to you, get legal advice

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Figure out what you'd get with an averaging agreement

Figure out the difference in the amount of overtime you'd get if you sign or don't sign an averaging agreement.

You can use the Ministry of Labour's Averaging & Time Off in Lieu Calculator to see how much overtime you'd get over 2, 3, or 4 weeks if you have an averaging agreement.

In most jobs, the hours you work over 44 hours a week are overtime hours. The examples below show the difference in how much overtime you get with or without an averaging agreement if:

  • your regular work week is 35 hours
  • you work a total of 180 hours in 4 weeks

No averaging agreement

 

hours worked

overtime
hours over 44

Week 1

35

0

Week 2

50

6

Week 3

60

16

Week 4

35

0

Total

180

22

Without an averaging agreement, you’d have 22 hours of overtime.

Averaging agreement

To find out your average overtime hours in the 4 weeks, take the total number of hours you worked in the 4 weeks and divide by 4.

Then subtract the 44 hours you must work in a week to qualify for overtime. This gives you the "average" number of overtime hours per week.

Then multiply this by 4 to get the averaged number of overtime hours.

 

hours worked

averaged overtime hours

Week 1

35

180 hours ÷ 4 weeks = 45 hours

45 hours - 44 hours = 1 hour

1 hour x 4 weeks = 4 hours

Week 2

50

Week 3

60

Week 4

35

Total

180

4

With an averaging agreement, you'd have 4 hours of overtime.

Try to cancel an averaging agreement

To cancel an averaging agreement before it ends, you and your employer must both agree.

And when an agreement ends, you don't have to renew it.

It's against the law for an employer to punish or fire you if you ask to cancel an agreement or refuse to renew an agreement.

But some employers don't follow the law. Sometimes an employer will say you made an agreement but:

  • you didn't make an agreement
  • you didn't understand the agreement
  • your employer forced you to agree even though you didn’t want to

If any of these apply to you, you might need to get legal help.

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Reviewed: 
June, 2015

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