Overtime for managers: What’s in a name?

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

What is a manager? There are a lot of job titles out there that may include the term, but are they really a manager? Should titles of people who manage people and those who manage things like processes and systems be different? For an employer, it’s critical to make the distinction when it comes to employment standards issues such as overtime.

Employments standards vary in each jurisdiction across Canada, but they all have specific overtime provisions, including the exemption for some jobs and positions from overtime pay. But some employers may get tripped up by these exemptions. Yes, managers are generally excluded from overtime pay. But just because an employee is called a manager doesn’t mean she’s exempt.

Employment standards usually have a definition of what constitutes a manager and if an employee doesn’t meet that definition, she is entitled to overtime. An employee may have “manager” in her job title, but if she doesn’t really supervise other employees or company resources, she probably doesn’t qualify to be exempt. Even if someone is normally a manager or supervisor, if the bulk of the overtime work she is doing is non-supervisory in nature, she is entitled to overtime pay.

The standard for who can be considered a manager is there so employers don’t superfluously slap a title on someone just to avoid paying her overtime. But should supervisory function be the standard for the exemption? What about the importance of the work to the employer, or the nature of the work?

On the other side, it’s assumed managers are more well-paid than regular employees and any demand for extra work is part of their regular compensation, which is likely part of the rationale for making them exempt from extra pay for extra hours. But this isn’t necessarily the case, especially in the case of small companies or regular employees with a lot of seniority. Managerial work is also usually more demanding, so more hours could be that much more difficult for them. 

Working extra hours can be seen as part of a manager’s responsibility for which she isn’t entitled to overtime. But what if part of her responsibility is covering for employees who can’t finish everything? Couldn’t performing the non-managerial tasks be considered part of her managerial responsibility? However, if doing those tasks takes up half the manager’s time, she gets overtime if it takes her past normal working hours.

It can be confusing for employers to figure out who is and isn’t exempt from overtime pay when it comes to managerial work. In the end, the safest bet is to be familiar with the employment standards legislation in the employer’s particular jurisdiction — and maybe err on the side of caution, too.

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publicaiton that looks at workplace law from a business perspective. For more information, visit http://www.employmentlawtoday.com.

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