Overtime Exceptions Part 1 - Managers and Supervisors
In our recent blog post, Overtime Entitlements in Ontario, we discussed employees' basic entitlements to overtime in Ontario. As we explained in our post, there are numerous exceptions to the general overtime rules. One important exception applies to employees who occupy managerial and/or supervisory roles.
The Ontario Employment Standards Act ("ESA") establishes the minimum standards for overtime pay. However, Exemptions, Special Rules and Establishment of Minimum Wage, O Reg 285/01 enacted under the ESA, provides that the overtime provisions do not apply to "a person whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis".
There are two requirements to fall within the manager/supervisor exemption:
- The work is supervisory and/or managerial in character; and
- Performance of non-supervisory and/or non-managerial tasks is irregular or exceptional.
Both requirements must be met for an employee to be exempt from overtime pay.
(1) Supervisory or Managerial in Character
In order to be exempt from overtime, the nature of the employee's work must be truly managerial or supervisory. This is determined by looking at the whole of the work performed, and the overall character of the work performed by the employee. The employee's functions, duties and responsibilities must be assessed.
Although they often overlap, a distinction can be drawn between supervisory and managerial duties. Supervisory duties refer to the supervision of other employees. The following are examples of supervisory duties:
- Delegating tasks
- Monitoring performance
- Enforcing deadlines
Managerial duties include the following:
- Hiring and firing employees
- Responsibility for making substantial purchases
- Control over finances and budgeting
- Exercising discretion and judgement in management affairs
An employee will be exempt from overtime if they primarily perform supervisory or managerial duties or a combination of both.
The Ontario courts have made clear that job title or classification is not determinative of whether an employee performs managerial or supervisory duties. Just because an employee's job title includes the term "manager" does not mean the exemption will automatically apply.
(2) Non-Supervisory or Non-Managerial Tasks are Irregular or Exceptional
Importantly, the employee must primarily perform managerial/supervisory duties. The managerial/supervisory duties must form a substantial component of the employee's job. The fact an employee "could" be called on to perform managerial or supervisory duties on an occasional basis is not sufficient for them to be considered a manager or supervisor. Accordingly, assigning an employee some managerial or supervisory duties from time to time will not necessarily disentitle them from receiving overtime pay.
That being said, an employee who is truly a manager or supervisor will not become entitled to overtime pay simply because they perform non-managerial or non-supervisory duties on an irregular or exceptional basis. "Irregular" refers to the fact the performance of such duties is unscheduled or sporadic. "Exceptionally" means the non-managerial/non-supervisory duties are outside the ordinary course of the employee's duties.
The performance of everyday tasks, such as answering the phone, drafting memos or conducting research does not prevent an employee from being a manager or supervisor for the purposes of the overtime exemption, provided such duties are part of the employee's normal supervisory and managerial duties. For example, in Tsakiris v. Deloitte & Touche LLP, 2013 ONSC 4207, the Ontario Superior Court held that the senior manager's performance of research and drafting activities did not prevent him from being overtime exempt, as the duties were part and parcel of his supervisory and managerial duties.
Key Takeaways:
Employees who primarily perform managerial or supervisory duties may not be entitled to overtime pay. The determination of whether an employee is exempt from overtime should be based on the employee's specific functions, duties, and responsibilities, and not their job title or classification. Employees' entitlements to overtime should be assessed on a case by case basis.
If you have any questions or concerns about overtime entitlements, please do not hesitate to contact Lee Workplace Law.
