Salary Employees Entitled to Overtime

The first installment in the “Ask the Expert” Series! 

There is a common misconception that if you pay an employee by salary, instead of an hourly wage, then the employee is not entitled to overtime. THIS IS NOT TRUE!

The only employees who are not entitled to overtime are Managers, Supervisors, and some “white collar” professionals such as Engineers and Doctors.  (See the “Special Rule Tool” here)

Let’s use an example: “Steve” is a sales rep. He is not in a managerial or supervisory role (i.e. he has a boss to report to who dictates what Steve is to do each day and reviews his performance).

Steve works 5 days per week and is paid $500 per week. The employer does not have an “Averaging of Hours” agreement with the employees.

Steve worked 50 hours in the week, so he is entitled to overtime for those extra six hours. His overtime would be calculated as follows:

$500 ÷ 44 = $11.36 (this is his hourly rate)

$11.36 x 1.5 = $17.04 (his overtime rate)                $17.04 x 6 = $102.24

His pay would be:            $500 regular rate + $102.24 0vertime = $602.24

You can see the Ministry’s calculations Here