One of the more common issues that employees have with the Employment Standards Act is eligibility for overtime. Although many employees are subject to a Collective Agreement and the ESA may not apply directly, employees need to be aware of both - in case the ESA provides more rights than their Collective Agreement would. Getting to the end of the week having worked 42 or 43 hours, more hours than most people work, and feeling like you should be getting paid more - that instinct is understandable. However, under the ESA, that is not yet the threshold.
How Overtime Actually Works in Ontario
The rule is straightforward: every hour worked beyond 44 in a single work week must be paid at 1.5 times your regular rate. Overtime is calculated weekly - not daily. Working a long 10 to 12 hour day unfortunately does not on its own mean you are owed additional pay. What matters is the total for the week. If your pay includes commission, shift premiums, or variable pay, those amounts also need to be factored into the regular rate calculation - and this is where many employers simplify things in their own favour.
The Salaried Employee Misconception
This is one of the more common misinterpretations, but it is quite straightforward. Being paid a salary does not make you exempt from overtime. To be exempt from overtime pay as a salaried employee you must fall into a specific category - manager or supervisor, a licensed professional as defined in O. Reg. 285/01 (which includes architects, engineers, lawyers, public accountants, and others), or an employee covered by a special industry exemption. The exemption must actually apply to you based on your duties - not just your title or pay structure. The onus is on the employer to prove the exemption applies, not on the employee to disprove it.
The Manager Exemption - and How It Gets Misused
The most commonly applied exemption is for managers and supervisors - and it is also the most commonly misapplied. The exemption only holds if the work is primarily managerial or supervisory in character. A manager who spends most of their time performing the same duties as the employees they supervise does not qualify, regardless of their title or salary.
Consider a retail store manager who holds the title of manager and earns a salary. If that manager spends the majority of their shift running the cash register, stocking shelves, and performing the same tasks as the hourly employees they supervise, they do not qualify for the exemption - regardless of their title. The employer bears the burden of proving the exemption applies. Where a manager does not qualify, they are entitled to overtime pay in the same way as any other employee. It is worth noting that where a valid exemption does apply and overtime pay is not owed, many employers will offer time off in lieu as an alternative - however this is a matter of workplace policy, not an ESA requirement for exempt employees.
Overtime Averaging Agreements
Overtime averaging agreements are increasing in use, and allow employees to enter into voluntary agreements with their employer to flex their working hours - getting a couple more days off during the week, or a long weekend, in exchange for a longer day elsewhere. An example would be an employee working 50 hours in Week 1 and 38 hours in Week 2, for a total of 88 hours over two weeks. With a valid averaging agreement in place, overtime is calculated on the average rather than each week individually - meaning no overtime would be owed in this scenario.
However, if you are an employee in one of these arrangements and do not believe it is being used fairly, there are strict requirements worth understanding. The agreement must be in writing. The employee must receive the Ministry of Labour information sheet before signing. It cannot be a condition of employment. The employee can cancel on two weeks written notice. Your employer simply saying your hours balance out, or making it a condition of your job, does not make the arrangement valid. If you are uncertain, it is worth getting further clarification from a professional.
Time Off in Lieu
Instead of overtime pay, an employee can agree in writing to bank time off at 1.5 hours per overtime hour worked, and flex that time later. It is intended to be used shortly after being accrued - the banked time must be taken within 3 months, or within 12 months if both parties agree in writing to an extended period. If you leave your job before using your banked time, you are entitled to be paid out any accrued time in lieu in cash as part of your final pay.
Most HR and payroll systems can track banked time quite easily. That said, it is always a good idea to keep your own record of each day you have banked time, and to cross-check it against your pay statements. Discrepancies are easier to address early than after months have passed.
The Two-Year Lookback
An issue that most people are unaware of, or assume is too much effort to pursue, is the lookback period for unpaid overtime claims. If you believe you have been denied overtime you were entitled to, you can file a complaint with the Ministry of Labour, Immigration, Training and Skills Development at no cost. The lookback period is two years - meaning you can recover up to two years of unpaid overtime wages.
To put that in practical terms: when the Ontario minimum wage increases to $17.95 on October 1, 2026, an employee who has been missing 3 hours of overtime pay per week for two years could be owed approximately $4,200 in missed wages. That is not a trivial amount, and it is recoverable through a straightforward complaint process.
A Note on the IT Professional Exemption
One exemption worth flagging specifically, particularly given the growth of technology roles in Ontario workplaces, is the IT professional exemption under O. Reg. 285/01. IT professionals are exempt from both Part VII of the ESA - which covers hours of work, daily and weekly rest periods, and eating periods - and Part VIII, which covers overtime pay.
The exemption is narrower than many assume. It applies to employees who are primarily engaged in the design and development of software, or in the management and operation of information technology systems, and who apply specialised knowledge and professional judgement in doing so. It does not cover everyone working in a technology environment. Routine help desk work, technical support, and general IT administration do not automatically qualify. The exemption is definition-based - there is no earnings threshold that triggers or removes it. If you work in technology and are uncertain whether this applies to you, the specific definition is set out in O. Reg. 285/01 and is worth reviewing against your actual duties.
Knowing Your Rights Is the First Step
Although there is a lot of information here and in the ESA regarding overtime, all that is required is an understanding of your rights in your specific job and industry. The rules can look complex on paper, but they are straightforward once broken down - and the partnHR ESA Interactive Index is a useful reference if you want to read the relevant sections directly in plain language.
This article covers employees who are not subject to a Collective Agreement. If you are unionized, your union local is the right first call - they will know your agreement and can tell you quickly whether the ESA or the agreement provides the stronger protection in your situation. Either way, the entitlement exists. It is just a matter of knowing which one applies to you.
Legislation Referenced
- Ontario Employment Standards Act, 2000 - Part VIII: Overtime Pay
- Ontario ESA, s. 22: Overtime pay threshold and rate
- Ontario ESA, s. 22.1: Overtime averaging agreements
- Ontario ESA, s. 22.2: Time off in lieu of overtime pay
- Ontario ESA, s. 21.1: Manager and supervisor exemption
- O. Reg. 285/01, s. 8(1): IT professional overtime exemption
- O. Reg. 285/01, s. 4(3)(b): IT professional hours of work exemption
- Working for Workers Act, 2021 - manager/supervisor exemption tightened
This article is for informational purposes only and does not constitute legal advice. For your specific situation, consult a qualified Ontario employment lawyer. Nothing on partnHR constitutes legal advice - all content is educational and informational only.