Compensation and Industrial Relations

Working 9 to 9: Overtime Emerges as a Concern

Overtime practices are coming under scrutiny in Canadian organizations. External factors—such as legal challenges to unpaid overtime—along with internal employee and management concerns are leading employers to review their policies.

Nearly two-thirds of the respondents to a Conference Board survey—published in Working 9 to 9: Overtime Practices in Canadian Organizations—said people in their company had raised concerns about overtime compensation over the past year. Employee eligibility for overtime pay, compliance with legislation, control of overtime costs, and potential legal liabilities associated with unpaid overtime are the key concerns.

Overtime Policies Under Review

Change is underway in many organizations. Almost one-third of respondents have changed their overtime policies and practices in the past few years, while a further 32 per cent have policy reviews underway or planned for next year. 

Issues that organizations have addressed or plan to address during upcoming policy reviews include the following:

• developing a formal corporate policy on overtime compensation;
• clarifying management or employee eligibility;
• ensuring compliance with legislation; and
• changing the rate of payment or time off in lieu granted for overtime worked.

Managing Legal Risks

While most organizations are confident that their overtime policies could stand up to legal scrutiny, 41 per cent are taking steps to mitigate the legal risks that may arise when employees work overtime without compensation. These strategies include the following:

• updating their overtime policies;
• ensuring that no employees work overtime without compensation;
• reviewing or changing employee eligibility rules; and
• instituting overtime pre-approvals.

Personal digital assistants, Internet applications and other forms of connectedness have increased employees’ ability to stay linked to the workplace outside of normal work hours.

The report highlights two thorny issues related to overtime practices. First, some organizations are attempting to manage overtime by monitoring employees using technology, but this practice has raised privacy concerns. Second, personal digital assistants, Internet applications and other forms of connectedness have increased employees’ ability to stay linked to the workplace outside of normal work hours. These technologies have created difficulty for employees in balancing work and family life. They have also raised the potential risk that employers could face substantial claims for unpaid wages.

Tips for Avoiding Lawsuits

The report includes tips to help employers guard against overtime lawsuits. The tips include the following:

• know the legislation that applies;
• review all overtime pay policies and practices;
• ensure that managers understand and implement the policies and procedures;
• determine whether managers are entitled to overtime compensation; and
• determine whether employees work, or have the opportunity to work, “off the clock.”

Karla Thorpe Associate Director Compensation and Industrial Relations Research

Publications Working 9 to 9: Overtime Practices in Canadian Organizations Webinar: Working 9 to 9—September 24th

Related Publication
Learning and Development Outlook 2009: Learning in Tough Times

Related Conferences 
HR Summit 2009: Building Organizational Resilience and Sustainability  
Compensation Outlook 2009: Matching Strategy to the New Economic Reality 
Western Compensation and HR Outlook 2009: Matching Strategy to a Changing Economy 

Related Executive Networks 
Compensation Research Centre 
Council of Industrial Relations Executives
Council on Workplace Health and Wellness