Section 22(1) of the Employment Standards Act 2000, S.O. 2000, c. 41 (the “ESA“) says that all employees are entitled to overtime pay if they work over time. That’s our starting point. And that’s the general rule.
Section 8 of the regulation entitled Exemption, Special Rules and Establishment of Minimum Wage, O.Reg. 285/01 talks about certain classes of employees (such as fire fighters, taxi cab drivers, etc.) who are exempt from the general rule. For dentist employers, the most relevant exemption from the overtime provisions of the ESA is section 8(b) which exempts any person “whose work is supervisory or managerial in character and who may perform non-supervisory or non-managerial tasks on an irregular or exceptional basis”. Sounds like dentist employers wouldn’t owe their managerial staff overtime pay, right?
But just hold on a minute… before you go making your office manager work overtime without paying her overtime pay, you should be mindful that section 8(b) has normally been interpreted very narrowly and very literally. Therefore, you should consider what the courts and the Labour Relations Board have said about the exemption…
Just keep reading…
In the recent case of Tsakiris v. Deloitte & Touche LLP, 2013 ONSC 4207 Justice Penny of the Ontario Superior Court of Justice reviewed years of Labour Relations Board decisions and a handful of court decisions regarding the section 8(b) exemption. Justice Penny recognized that:
“the ESA is intended to establish fair, minimum standards of employment in order to remedy the unequal bargaining position of individual, non-organized, employees in relation to their employers… In light of this underlying purpose, it is clear that the reason for the managerial/supervisory exemption is that such employees do not ordinarily fall within the ambit of the group requiring protection. This is because managerial and supervisory employees generally direct and operate the business enterprise. Because they have the power and responsibility to direct, supervise and manage and are paid accordingly, managerial employees do not require the protection afforded to rank and file employees and so they are exempt from the overtime protections incorporated into s. 22 of the ESA.”
For these reasons, Justice Penny devised a “two-step inquiry” for determining whether section 8(b) will apply to an employee:
- there must be a determination of whether the “character” of the employment is managerial or supervisory;
- if the answer to the first question is yes, there must be a determination of:
- whether the individual performs non-managerial or non-supervisory tasks; and, if yes
- whether these tasks are done on an irregular or exceptional basis.
In Tsakiris v. Deloitte & Touche LLP, the employee WAS found not to have performed non-managerial and non-supervisory tasks on a regular basis and was therefore exempt from being paid overtime. However, there are countless other cases where the employee, although given the title of “manager” or “supervisor” was found not to be exempt from overtime pay.
For example, in Baarda v. Plywood and Trim Co. Ltd., 2004 CanLII 16978 (ON LRB) the employee, Mr. Baarda, whose title was “department head” was found NOT to be exempt from the overtime provisions and was entitled to receive overtime pay because the documentary and oral evidence in the case established that he did not have authority to make personnel or other decisions of a supervisory or managerial nature on his own, without the concurrence of the branch manager or other senior manager. His oversight of the welders was very limited in scope and did not meet the requisite indicia of a supervisor. Although the Board found that by virtue of his expertise in commercial products, the employee had significant independence and authority with respect to generating and facilitating commercial sales, the evidence did not establish that these responsibilities were of the nature or extent to render the employee’s duties managerial in character within the meaning of section 8(b).
What does this mean for you?
Ask yourself: do any of your staff direct and operate the dental practice? Other than yourself, the only person who might qualify for this role is an office manager (not an assistant, hygienist or front desk person). Then ask yourself: does your office manager supervise/manage others and have significant independence and authority? And are they ONLY performing non-managerial and non-supervisory tasks infrequently (i.e. not as part of their day-to-day tasks)? If so, then they might not qualify for overtime pay.
In my next blog, I’ll be discussing the amount of overtime pay you need to give your employees and when you need to pay it.
