Protect your company from overtime complaints and costs

Protect your company from overtime complaints and costs
The latent issue of overtime has the potential to become explosive and imminent, enflamed by society’s 24/7 connectivity and stoked by recent overtime class action suits in Canada’s financial sector, says lawyer Mort Mitchnick of Borden Ladner Gervais LLP. On February 19th, an Ontario court allowed a class action suit against the Scotiabank over overtime to proceed. This, despite a dismissal last year of a similar class action suit against the CIBC.

Both cases are being appealed, but in the meantime employers may be left wondering how to handle the issue of overtime in their workplaces. The bottom line is that if a business requires employees to be on-call 24-hours-a-day, or to work overtime regularly, the employer must explicitly state this. Mitchnick cautions that employers should not automatically consider a salaried employee exempt from being paid for overtime hours. Instead, wise managers will examine their workforce to determine which departments, or which individual jobs, will likely fall under the requirement to work overtime.

Moreover, company policies and practices need to address the requirement upfront, and procedures be developed to advise how to get overtime approved, record keeping requirements and how to handle after-hour emails and mobile devices such as Blackberries.

In fact, employers may wish to consider limiting the number of employees who are issued company Blackberries or other communication devices.

Employers have the right and the obligation to deter overtime, Mitchnick notes. Yet, in our overly connected world, the temptation to send emails, or otherwise contact employees outside of normal business hours, can be hard to resist. Mitchnick suggests managers not only develop procedures outlining who needs mobile devices, but also have set rules for those employees who do have them about when the devices should be turned off. For example, Mitchnick points out that the federal government has implemented a policy that such devices are turned off between 7:00 p.m. to 7:00 a.m. for most employees.

Mitchnick warns that while overtime cases in Canada have so far been limited to the financial sector, this has not been the case in the U.S., where such cases have filtered into industry in general. The two Canadian cases may ultimately offer some guidance, however, in the meantime Mitchnick offers the following tips:

3 Tips to Manage 24/7 Connectivity
  1. Overtime must be pre-approved, except for specifically exempted jobs or departments. Discover and identify in writing who those exemptions are. Mitchnick notes that these exemptions must be driven by the role, or job description, not whether it is a salaried position or not. It’s important to check out the employment standard rules that govern your jurisdiction for guidance – know the rules, Mitchnick insists.
  2. Set out the policy to cover these exemptions and make sure all managers and employees know the policy and live by it.
  3. Employers are obligated to record all overtime hours accurately, and in a time fashion. This way, all parties are made aware of any claims for overtime payments at the earliest possible time.