By: Jasmin Aujla
Overtime is one of the most commonly misunderstood areas of employment law—and one that can lead to costly compliance issues if handled incorrectly. Whether you’re an employer navigating payroll or an employee trying to understand your entitlements, knowing the rules around overtime pay in British Columbia is essential. This article outlines who qualifies for overtime, how it’s calculated, and the impact it has on other entitlements like vacation pay.
Who gets OT Pay?
Overtime pay in British Columbia applies to all employees within the province, regardless of whether they are casual, probationary, temporary, full-time or part-time workers, as long as the person meets the definition of employee as defined in the Act. Certain industries have varying overtime rules, such as oil and gas and transportation. Employers should review these regulations under the ESA.
Standard OT calculation
The standard working time in BC is 8 hours a day and 40 hours per week. If an employee exceeds that standard, overtime pay is calculated at 1.5x more than the employee’s regular hourly pay for time worked between 8-12 hours. For any time worked over 12 hours in a day, employees are paid 2x their regular rate of pay.
Example: Alex works a 14 hour shift in one day. His regular hourly rate is $20.00/hour.
| Hours Worked | Pay Rate | Calculation | Total |
| First 8 hours | Regular pay (1x) | 8 x $20.00 | $160.00 |
| Next 4 hours | Over time (1.5x) | 4 x ($20.00 x1.5) | $120.00 |
| Final 2 hours | Double time (2x) | 2 x ($20.00 x 2) | $80.00 |
Banking OT Wages
Employees may request, in writing, to bank their overtime hours instead of receiving immediate payment. In this case, the employer must credit the time at the appropriate overtime rates, either 1.5x or 2x as outlined above.
Employees can later use their banked time in several ways:
- Request payment of some or all of the banked time
- Take paid time off, scheduled at a mutually agreed-upon time
- Close the bank and receive a full payout
If an employer decides to close a time bank, they must provide at least one month’s written notice, and ensure that all banked time is used or paid out within six months. Upon termination or at the employee’s request to close the bank, the employer must pay out any remaining time bank balance.
Overtime Pay’s Link to Vacation Pay
In BC, vacation pay is calculated as 4% or 6% of an employee’s total wages, depending on their length of service. Total wages include:
- Regular pay
- Bonuses and commissions
- Overtime pay
- Any other amounts required under the Act
Therefore, overtime wages earned by an employee are included in their total wages and used in calculating vacation pay. This means that the more overtime pay an employee earns, the higher their total wages in the year, which results in a larger vacation entitlement.
Understanding overtime obligations helps create fair and compliant workplaces. Employers must ensure their practices align with the Employment Standards Act, and employees should feel confident that their time is being valued appropriately. If you have questions about how overtime pay applies in your workplace or industry, our team is here to help you navigate the details and ensure compliance!