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Posted on March 1st 2009 in Employment Law

Don’t Mess with Employment Standards

Dara Fresco has spent the past 10 years working as a bank teller at more than a dozen branches of CIBC. Ms. Fresco claims that she is routinely required to work two to five extra hours a week without being compensated. By her calculations she is owed about $50,000 in overtime pay.

Alison Corless worked for KPMG from 2000 to 2004 as a technician compiling corporate tax returns. She claims she is owed $87,000 in overtime.

The Minimum Standard
Most jurisdictions in Canada have laws that provide minimum employment standards to protect otherwise vulnerable employees. Employment standards legislation addresses a myriad of issues, including overtime. Since banking falls within the federal jurisdiction, employees like Ms. Fresco are subject to the rules set out in the Canada Labour Code. Pursuant to that law, bank tellers, who work in excess of 40 hours a week, must be compensated. They are entitled to time and a half or they may agree to equivalent paid time off.

Ms. Corless’s employment was governed by Ontario’s Employment Standards Act, 2000. Pursuant to that Act, overtime is payable at time and a half for each hour worked in excess of 44 hours per week. Employers are prohibited from requiring employees to work more than 48 hours a week unless the employee agrees. Even if an employee is agreeable to the extended hours, the employer cannot require an employee to work more than 60 hours a week1.

Minimum employment standards can be improved upon by an employment contract, the employer’s policies or a collective agreement. The minimum standards do not apply to managers or supervisors.

He Said She Said
Both CIBC and KPMG maintain that they have clearly defined policies concerning overtime, which comply with the applicable laws. Despite such policies, Ms. Fresco alleges that she is discouraged from recording her overtime hours. Ms. Corless claims that KPMG supervisors “from time to time required workers to charge 50 to 60 hours per week of work to projects – and “it is well known in the accounting and professional industry that hours worked by a productive employee are approximately one-third more than the hours charged.”

Although it will be some time before we will know whether these ladies will be successful, their claims are certainly not without precedent. Similar lawsuits have been successfully launched in the United States. In 2005, Wal-Mart was ordered to pay $172 million in overtime pay to employees it had failed to compensate. And over the past two years some well-known financial institutions, including Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley have all made multi-million dollar agreements to settle suits accusing them of not paying their stockbrokers overtime.

The Moral
These lawsuits should be a wake up call to employers to review the wording and enforcement of their overtime policies. Our lawyers are well versed in all aspects of employment law. If you have questions regarding your rights and responsibilities as an employee or an employer please contact Howard Steinberg.