Banking of Overtime Wages - Act Part 4, Section 42
This section explains how an employer may establish a time bank for an employee’s overtime wages and the rules associated with paying out monies credited to a time bank.
42 (1) At the written request of an employee, an employer may establish a time bank for the employee and credit the employee's overtime wages to the time bank instead of paying them to the employee within the time required under section 17.
(2) Overtime wages must be credited to a time bank at the rates required under section 37 (4), (5) or (6) or 40.
(3) If a time bank is established, the employee may at any time request the employer to do one or more of the following:
(a) pay the employee all or part of the overtime wages credited to the time bank;
(b) allow the employee to use the credited overtime wages to take time off with pay at a time agreed by the employer and the employee;
(c) close the time bank.
(3.1) The employer may close an employee's time bank after one month's written notice to the employee.
(3.2) Within 6 months of closing an employee's time bank under subsection (3.1), the employer must do one of the following:
(a) pay the employee all of the overtime wages credited to the time bank at the time it was closed;
(b) allow the employee to use the credited overtime wages to take time off with pay;
(c) pay the employee for part of the overtime wages credited to the time bank at the time it was closed and allow the employee to use the remainder of the credited overtime wages to take time off with pay.
(4) [Repealed 2003-65-6.]
(5) On termination of employment or on receiving the employee's written request to close the time bank, the employer must pay the employee any amount credited to the time bank.
(6) [Repealed 2003-65-6.]
If an employee makes a written request, an employer can create a time bank and credit overtime wages to the time bank instead of paying the overtime wages each pay period.
Overtime wages must be credited to the time bank at the appropriate overtime rate as set out in section 40, or as required under an averaging agreement under s.37.
Any time an employee requests to be paid part or all of the wages in the time bank, the employer must pay these wages.
An employee may use banked wages to take time off with pay at a time mutually agreed to by the employer and the employee.
An employee earns $15/hour. They make a written request to have a time bank established, and their employer agrees. In January they work a 10 hour shift and their employer credits $45 to the time bank (two hours at the employee's overtime rate of $22.50/hr.) In February the employee works four more hours of overtime, and is credited with another four hours’ pay at time and one half, totalling $90. In March, the employer agrees to the employee's request for a day off. The employee is paid $120 for the day out of their time bank at their regular rate of 8 hours x $15/hour, leaving $15 in the time bank.
At any time, an employee may request that the employer close the time bank.
An employer may close an employee’s time bank after providing one month’s notice to the employee. The notice must be in writing.
Within six months of closing an employee's time bank, an employer must:
- pay the employee all overtime wages remaining in the time bank at the time it was closed;
- allow the employee to use the credited overtime wages to take paid time off; or
- give the employee a combination of pay and paid time off.
Subsection (4). Repealed
When an employee requests at any time to have their time bank closed, all wages must be paid out on the next payday. The request must be in writing.
When employment ends, the employer must pay out any wages in the time bank on the final paycheque as required by s.18 of the Act.
Subsection (6). Repealed
Annual Vacation Pay
Annual vacation pay is payable on all wages including overtime that is banked under this section. Annual vacation pay on overtime wages banked under this section is paid in accordance with s.58 of the Act.
Section 27, Wage statements and s.28, Payroll records set out the records that an employer must keep if a time bank is established. These records must be kept for two years after employment ends.
Employees covered by a collective agreement
Under s.3 of the Act, where a collective agreement contains any provision respecting hours of work or overtime, the provisions of this section do not apply. If a collective agreement does not contain any provision respecting hours of work or overtime, Part 4 except s.37 is deemed to be incorporated in the collective agreement as part of its terms.
Where there is a collective agreement, the enforcement of matters relating to hours of work or overtime is through the grievance procedure, not through the enforcement provisions of the Act.
Certain employees are also exempt from this section, or Part 4 entirely, under the Employment Standards Regulation.
Related sections of the Act or Regulation
- s.1, Definition “day”
- s.1, Definition “overtime wages”
- s.1, Definition “regular wage”
- s.1, Definition “work”
- s.1, Definition “week”
- s.3, Scope of the Act
- s.27, Wage statements
- s.28, Payroll records
- s.32, Meal Breaks
- s.37, Agreements to average hours of work
- s.39, No excessive hours
- s.40, Overtime wages
- s.72, Application for variance
- s.30, How to apply for a variance
- s.33, Exclusions from Parts of the Act and this regulation
- s.34, Exclusions from hours of work and overtime requirements
- s.34.1, Hours of work and overtime for farm workers
- s.35, Resident caretakers
- s.37, Fishers
- s.37.2, Logging truck drivers
- s.37.4, Newspaper carriers
- s.37.8, High technology companies
- s.37.14, Commission sales