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Averaging Agreements Fact Sheet

by on Apr.08, 2021, under Uncategorized

This type of flexibility can be a big tic for both the employer and the worker in the Plus column, but overtime requirements for labour standards can make flexible hours unsustainable for the end result. So what does an employer do when workers regularly work more than 8 hours a day or 40 hours a week, and the arrangement works well, but leads to regular overtime? One possible solution is a funding agreement. Overtime due is the highest daily or average overtime. As a result, employers must deduct all of the daily overtime paid to workers from the average time owed to determine whether overtime is due at the end of the median period. While means agreements may minimize the amount of overtime an employee must pay, a funding agreement does not eliminate the obligation to pay full overtime. You and a staff member may agree to organize the employee`s hours of work over a period of one or more weeks to the average to determine an employee`s right to overtime. The weeks used for average agreements must start on a Sunday. Such agreements are also necessary: workers who work under medium agreements when working time is on average over a period of more than one week must either benefit from 32 consecutive hours of work for each week during the median period, or receive 1.5 times their normal wage for working time, instead of obtaining time to work. Properly used, funding agreements can save employers a lot of money – why not use one of the few gifts for employers in law? Employers may require or allow workers to work modified hours through a funding agreement. Under a funding agreement, workers who work eight hours or more per day must receive 1.5 times the worker`s normal wage only for hours worked during scheduled hours up to 12 hours. It also means that a worker who has to work up to 12 hours a day is not entitled to overtime pay under a funding agreement.

The funding agreement must only indicate a work plan that applies to the employee. In both cases, hours worked beyond the above-average weekly hours are treated as overtime.

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