Recording and reporting employee work hours

By Yosie Saint-Cyr, LL.B., Managing Editor, HRinfodesk.com---Canadian Payroll and Employment Law News, September 2009

Do you track employee work time (i.e., record and report on employee work hours)? Out of 227 HRinfodesk poll respondents, 115 (50.66%) indicated that they recorded and reported work hours for all employees, while 86 (37.89%) poll participants track employee work time but exclude the work hours of salaried employees. Surprisingly though, while only few in number, 26 respondents (11.45%) do not track employee work time at all (see details in the chart below). As a general rule, under employment/labour standards legislation, employers are required to record all hours worked for their employees. For basic salaried employees, this rule is sometimes relaxed; however, for hours in excess of regular daily and weekly hours, they still need to be recorded. For employees who are exempt from the hours of work and overtime pay requirements under employment/labour standards legislation, there is no requirement to record hours of work.

What are the legal requirements?

The law sets minimum standards for hours of work and overtime and imposes detailed record-keeping obligations on employers in every jurisdiction in Canada.

Employers must create detailed records pertaining to the employment of each employee, and retain those records over specified periods of time.

In all jurisdictions, employers must record all hours employees work, and hours per day (except in Nova Scotia). For example, in Saskatchewan, employers must keep records of the times when work begins and ends each day and the times when daily meal breaks start and finish. In federally regulated workplaces, if hours of work are averaged, employers must also keep records of notices of reductions in an employee's standard and maximum hours of work and any notices concerning averaging. In Ontario, employers are not required to record daily and weekly hours for salaried employees if the employer keeps track of the number of hours in excess of those hours the employee works in a regular work week and the number of hours over eight that the employee works each day (or if the employee's regular work day exceeds eight hours, the number of hours exceeding those hours), or if the sections of the Employment Standards Act dealing with limits on work hours, hours free from work, and overtime pay do not apply to the employee.

The records that employers must keep vary by jurisdiction, as do the lengths of time they must keep them. The purpose of hours of work and overtime records is to ensure employees are not working more hours than the law prescribes, that they are paid accordingly, and to serve as evidence of compliance in the event of a complaint or audit under employment/labour standards legislation. Employers must make these records readily available for inspection by an employment standards/ministry of labour officer, even if a third party manages or retains them.

Overview of hours of work and overtime rules

Working time is the period of time that an individual spends at paid occupational labour. In general, employment/labour standards legislation provides for a standard workday or workweek, which provides a legal maximum number of hours per day or week that employees are permitted to work. In some jurisdictions, the maximum workweek seems to be an absolute maximum whereby employees are not permitted to work any hours in excess of those stipulated. Other jurisdictions allow maximum hours to be exceeded where the employer meets certain conditions or obtains a permit, such as when work is urgently required to maintain or repair equipment (for requirements specific to your jurisdiction, see below).

Employees are considered not to be working when they are permitted to take time off work for their own private affairs or pursuits. If an employer cannot identify with accuracy when an employee was or was not working, it might not be able to defend itself against employee complaints regarding wages owing.

Without records to support the fact that employees were granted the time off and how long they were off, courts, arbitrators or employment standards officers will assume that an employee was working and is entitled to be paid. Further, if the work exceeds overtime thresholds, then the employer will be obliged to pay overtime pay.

Most employees covered by employment/labour standards must receive a certain number of hours free from work, between shifts, or weekly/bi-weekly. These requirements vary by jurisdiction.

Overtime

Overtime is an employment/labour standard that sets the threshold for hours of work after which most employees receive overtime pay. The threshold varies among jurisdictions, and some industries have different overtime daily and weekly hours for the purpose of calculating overtime pay.

For most employees (whether they are full-time, part-time, students, salaried or casual workers), overtime rates apply after they have worked the defined threshold in a workweek (for requirements specific to your jurisdiction, see below). In general, the employee must receive 1½ times her or his regular rate of pay for each hour of overtime worked (also called time and a half).

Some employees' wages are not based on the number of hours they work in a week but instead on the number of pieces they complete or commission. These employees must be paid at least the minimum wage for all the hours they work. They are also usually entitled to overtime if they work more than the threshold.

Not all employees are covered by the hours of work and overtime provisions; several groups of employees are exempt from employment/labour standards provisions relating to overtime. There is a long list of fully excluded workers.

Travel time

Employment/labour standards legislation does not specifically deal with travel time. Travel to and from a job is not considered to be work. However, travel for business purposes is considered to be work. For example, if an employee's job requires him or her to take a flight outside of business hours and stay in a hotel, the employee is considered to be working for the entire duration of the travel until he or she arrives at the hotel.

Travel time is the time spent by an employee who, while acting on instructions from the employer, is providing a service to the employer when travelling to and from a workplace. This means bringing employer-provided services, tools, equipment, materials, supplies and in some cases, other employees, to the workplace. Time spent travelling during the working day—going from one workplace to another—is work for which the employer must pay wages.

Travel time need not be paid at the same rate as other work, but must be paid at a rate at least equal to minimum wage. Travel time is also subject to overtime. It is considered to be work, and if performed in an overtime situation (for example, after the eighth hour of work), it must be paid at the applicable overtime rate of pay.

Meetings, conferences, etc.

Generally, employees are considered to be at work while attending meetings conducted or arranged by their employer where they are either instructed or provided with information that serves a business purpose. For example, a meeting to review new procedures is considered to be work. Even if attendance at such a meeting is optional, this does not mean attendance will not be considered work. Those who do attend are considered to be working. No element of volunteerism changes a business meeting into something other than work, whether called by the employer or someone on behalf of the employer.

Employees are entitled to at least minimum wage or their regular rate of pay for such work. Unless their entitlements are affected by regulation, employees are entitled to minimum daily/reporting pay when they attend such a meeting on a day off work, and to overtime if attendance results in their working more than eight hours.

Structure of a workweek

The definition of a workweek is critical to the calculation of an employee's entitlement to overtime pay. A workweek is sometimes defined as a recurring period of seven consecutive days selected by the employer for the purpose of scheduling work, or if the employer has not selected such a period, a recurring period of seven consecutive days beginning on Sunday and ending on Saturday. The manner in which overtime pay is calculated varies depending on whether the employee is paid on an hourly basis, on a fixed salary, or has a fluctuating salary. Overtime pay calculations may also be affected by public holidays.

Eating period and breaks

In general, employees must not work more than five consecutive hours without getting a 30-minute meal period. The employer does not have to pay for the meal period unless there's an employment contract that says otherwise. Employees and employers can agree that the 30-minute meal period can be taken as two shorter breaks within a period of five hours. Together the two eating periods must total at least 30 minutes.

Under employment/labour standards legislation, an employer is not required to provide any breaks other than the 30-minute meal period for every five consecutive hours of work. However, if the employer does provide another type of a break, such as a coffee break, and the employee must remain at his or her workplace during the break, the employee must be paid at least the minimum wage for that time.

Flexible work arrangements

Averaging agreements

Sometimes employees need to work variable hours to meet family responsibilities, or employers might need employees to work extra hours during a peak period, in order to fill customer orders. If the employment/labour law allows, an employer and an employee can agree in writing to average the employee's hours of work over a specified period of two or more weeks for the purposes of calculating overtime pay. Under such an agreement, an employee would only qualify for overtime pay if the average hours worked per week during the averaging period exceeded the specified threshold. The agreement should have an expiry date.

An averaging agreement cannot be revoked by either the employer or employee(s) before its expiry date, unless both the employer and employee(s) agree in writing to revoke it.

In some jurisdictions, in addition to having agreements in writing, the employer must also obtain an approval to average hours for overtime pay purposes from the Director of Employment/Labour Standards.

Compressed workweeks

A compressed workweek is a scheduling of hours of work that has employees working longer hours each day, and is balanced by having employees working fewer days each week.

A compressed workweek can be implemented by an employer at any time by preparing a schedule that meets the required criteria for a compressed workweek arrangement. Permission from Employment Standards may be required.

The arrangement vary between jurisdictions, but in general, must meet the following criteria:

• Employees may not be scheduled to work longer than the daily maximum allowable work hours (10 or 12 hours)
   
• Hours worked in excess of the scheduled daily hours, and/or in excess of the weekly overtime threshold, are overtime hours

Accurate and complete records

The onus is on the employer to keep the required records of who does what and when. To defend against allegations of unpaid overtime, the employer must document that the employee did not, in fact, work unpaid overtime hours. That means developing a way to track hours worked and to check that against hours paid or time taken off in lieu.

As stated before, accurate and complete records can provide evidence of compliance with employment/labour standards legislation.

If the employer fails to keep complete and accurate records, an employment standards officer will have to determine compliance based on the best evidence available. For example, records kept by employees may provide the basis for evidence where the employer has failed to meet its record-keeping obligation.

Fines and administrative penalty may be levied for record-keeping violations and for the advance destruction of records that are required by law.

For legislated hours of work rules by jurisdiction, refer to the following comparative chart: www.hrinfodesk.com/index.asp?article=23565

For employment/labour standards record-keeping and retention requirements by jurisdiction: www.hrinfodesk.com/index.asp?article=30839

By Yosie Saint-Cyr, LL.B., Managing Editor at HRinfodesk.com

Published on HRinfodesk---Canadian Payroll and Employment Law News and Developments

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