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Understanding Overtime Agreements in Alberta
November 26, 2024

Understanding Overtime Agreements in Alberta

As the holiday season approaches, many Alberta hotels experience a surge in business, requiring longer hours for staff. Managing these additional hours in compliance with Alberta's Employment Standards Code is crucial. Overtime agreements can help hoteliers navigate this busy period while balancing costs and employee well-being.
 
What Is an Overtime Agreement?
An overtime agreement allows employers and employees to agree on substituting time off (banked hours) for overtime pay. Unlike the standard overtime rule—paying employees 1.5 times their regular hourly rate for extra hours worked—an overtime agreement lets you offer time off instead, at a rate of 1 hour of banked time for every overtime hour worked.
 
Benefits of Overtime Agreements for Hoteliers
1. Cost savings: Banking hours reduces immediate payroll expenses by substituting time off for overtime pay.
2. Employee Satisfaction: Many employees value time off more than extra pay, especially after working long hours during peak periods.
3. Operational Flexibility: Overtime agreements give hoteliers more leeway to manage resources effectively while providing a fair arrangement for staff.
 

Overtime Agreement Requirements

  1. Decide on the type of agreement you’d like to use in your hotel. An Individual Overtime Agreement or a Group Overtime Agreement. 
  2. Provide employees with a copy of the written agreement.
  3. Bank overtime hours worked.
  4. Take banked hours off when the employee could have worked.
  5. Give at least 1 hour off for each overtime hour worked.
  6. Pay regular wages for banked time off.
  7. Use banked time off within 6 months of the overtime pay period.
  8. Pay 1.5x the rate if time off isn’t taken within 6 months.
  9. Include overtime agreements in collective or written agreements.
 
 
 
 
 
Resources
 
Note: Employers must ensure compliance with Alberta’s Employment Standards Code to avoid penalties and maintain trust with their team. If you are unsure or for more guidance or resources, contact the Alberta Hotel and Lodging Association or visit Alberta’s Employment Standards website.