Work Averaging Agreements is an effective tool that many companies utilize in order to run their organization efficiently. The Agreement is normally put in place when work flow needs necessitates employees to work extra hours on a regular basis to meet production schedules for timely product delivery. Increased work hours also help the company to remain effective and competitive in the marketplace. Overtime Averaging Agreements, on the other hand, help organizations in remaining cost effective.
There are a few key rules that you will need to be aware of when working with Averaging Agreements:
Work Averaging Agreement
1. Laws dictate that a worker shall not work longer than 8 hours in a day though you may have employees work up to 48 hours a week without the Director’s approval. Approval by the Director is only needed when employer requires an employee to work over 8 hours in a day or 48 hours in a week and up to a 12 hour work day or a 60 hour work week to facilitate the organizational needs.
2. You will need to obtain agreements between the employee and employer or, in the case of a unionized environment, union and employer. This offers transparency to employees by employers and alerts them to their rights under the Ontario Legislation.
3. The application and submission to the Director of Employment Standards should be no shorter than 30 days prior to the desired implementation date. Be aware that you will need to disclose the reason behind the need.
4. Once an approval is in place, an employer may schedule hours of work for an employee(s) according to their company’s workforce needs without interference from any governing legislative body.
Overtime Averaging Agreement
1. Most employers pay their employees 1.5 times the employee’s regular rate of pay for each hour worked after 44 hours on a weekly basis. However, in the case of Overtime Averaging, employers may (with the approval of the Director) alter that method in a variety of methods.
a. An employer may offer the employee an option to take time off regular work with pay in lieu of receiving overtime pay. However, the time off must equal that of the overtime sum. For example, if an employee worked 4 hours of overtime then the employee’s time off would equate to 6 hours off which is 4 x 1.5 hours.
b. A second option is to average the hours of work over a period of not more than four weeks. This serves the purpose of defining an employee’s entitlement to overtime. For example, an employee works 60 hours for the first three weeks and 0 hours for the fourth week totaling 180 hours over the course of four weeks. The employee is then entitled to 176 hours at regular pay (remember overtime is normally paid after 44 hours in a work week and is used in the 4 week calculation) and 4 hours of overtime.
c. Provided their prime responsibility is supervision, supervisors and managers are exempt from overtime guidelines as outlined in the Employment Standards Act.Remember, regardless of the type of Averaging you choose to obtain, both can only occur under the following circumstances, a. A written agreement between the employee or union with the employer has been signed so that his or her hours of work may be averaged over periods of a specified number of weeks; b. Approval from the Director of Employment Standards has been obtained by the employer that applies to the employee or a class of employees to which the employee belongs; and c. averaging period will not surpass the lesser of,
i. The number of weeks that are specified within the agreement, and
ii.The number of weeks that are specified within the approval. (in other words, the numbers in the agreement and approval should match)
d. Lastly, an employer has the right to schedule their employees appropriate to their organizational needs.
To learn more about Averaging call Employment Professionals Canada or visit our website for other relevant employment topics for today’s organizational needs.