By: Katie Stargardter
Overtime pay in British Columbia continues to be one of the most misunderstood aspects of employment in British Columbia. Even well-intentioned employers can find themselves dealing with the Employment Standards Branch (ESB) because of assumptions, inconsistent practices, or casual interpretations of “flexibility.” Here are the most frequent overtime pay mistakes (and how to avoid them):
1. Confusing Overtime with “Extra Hours”
One of the most common mistakes is assuming that overtime only applies when employees work over 80 hours in two weeks or beyond a full-time schedule. In BC employment law, overtime rules apply as follows:
- Time-and-a-half applies after 8 hours in a day or 40 hours in a week.
- Double time applies after 12 hours in a day.
Even if an employee volunteers to stay late, employers must still pay overtime.
2. Assuming Salaried Means Exempt
Many employers mistakenly believe that salaried or “management” employees are automatically exempt from overtime pay. In reality, title alone doesn’t determine exemption: the employee’s actual duties do. Under BC’s Employment Standards Act (ESA), only certain “managerial” or “supervisory” positions are exempt. To qualify, the employee must regularly exercise independent authority over significant decisions and not perform the same work as their direct reports for a substantial portion of their time. If a salaried “Manager” spends most of their day doing front-line tasks, they’re likely entitled to overtime.
3. Failing to Track Time Accurately
Another frequent issue is not tracking time for salaried or remote workers. BC law requires employers to keep daily records of hours worked for all employees, including start and end times, meal breaks, and overtime. Without these records, the burden of proof in a dispute falls on the employer. Even if your team works flexible hours, you must have a reliable way to track time that captures hours worked accurately.
4. Unauthorized Overtime ≠ Unpaid Overtime
Employers may inform their employees not to work extra hours, but unauthorized overtime is still payable. If the work is performed and the employer knew or ought to have known about it, it must be paid. You can address any violation of scheduling or authorization rules, but you can’t withhold pay for time already worked.
5. Ignoring Averaging Agreements and Variances
Averaging Agreements can be a helpful tool for workplaces with fluctuating hours (like construction, healthcare, or hospitality). However, a valid Averaging Agreement must:
- Be in writing;
- Be signed by both the employer and employee;
- Clearly state the period of averaging (up to 4 weeks), and
- Specify the schedule of hours.
Without this, averaging hours may not be legally recognized, and you may owe retroactive overtime if challenged.
6. Averaging Agreements Confused with Flexible Scheduling
“Flex time” is not the same as an averaging agreement. Letting an employee work longer on one day and shorter on another doesn’t exempt you from daily overtime unless there’s a formal agreement in place.
Without it, hours beyond 8 in any given day still calculate as overtime, even if the weekly total is under 40.
7. “Banked Time” Without Written Agreement
Many workplaces let employees bank overtime hours to take as future paid time off instead of being paid immediately. If that’s the case for you, ensure it is in writing and follows ESA rules:
- Overtime must be banked and taken at the correct premium rate (e.g., 1.5 or 2.0 times the regular rate).
- If employment ends, unused banked time must be paid out.
8. Failing to Apply Overtime to Variable Pay
Overtime applies to all earnings tied to hours worked, including commissions, performance bonuses, and certain allowances. Employers sometimes calculate overtime pay based only on base wages, but the “regular rate of pay” must include all monetary compensation earned during that pay period.
Final Thoughts
Overtime compliance isn’t just about avoiding penalties, it’s about fairness and trust. When employees feel confident they’re being paid correctly, morale, engagement, and retention all rise.
If you have questions about how overtime pay applies in your BC workplace or industry, or need guidance on creating compliant overtime and time-tracking policies, our HR consulting team is here to help! Contact us today for a free consultation!