June 7, 2024
Seasonal employers and overtime: Are you risking a costly settlement?
By Lai-King Hum

Seasonal employers in Ontario, such as landscapers, winter services and pool maintenance providers, face unique challenges when it comes to overtime rules under the province’s Employment Standards Act, 2000 (“ESA”).

These rules can be complex to navigate. Failing to comply may result in investigations by the Ministry of Labour (MOL), incurring additional administrative costs and even legal proceedings. It is important for employers to understand the intricacies of industry-specific exemptions to effectively navigate the distinct overtime rules outlined in the ESA.

Are you a seasonal employer?

Section 22(1) of the ESA outlines the general overtime entitlements of employees who work more than 44 hours per week. Section 22(9) states there are exemptions from the general overtime entitlement. Sections 8, 14 and 15 of the Ontario Regulation 285/01 (the “Regulation”) list the exemptions commonly known as “seasonal work exemptions.”

For the purpose of this article, a "seasonal employer" is an employer who hires employees falling within Section 8 of the Regulation, which sets out certain categories of employees who are not entitled to overtime pay, no matter how many hours they work in a week. These include landscape gardeners, or those responsible for installing and maintaining swimming pools. Employees engaged in specific agricultural activities such as growing mushrooms, flowers for retail and wholesale trade, laying sod, and growing trees and shrubs for retail and wholesale trade are also exempt from overtime entitlements.

Does the overtime exemption apply to your business?

It is critical to note that even if your business falls under this category, it does not necessarily mean the special rules about overtime pay apply to all your employees. The exemptions are tied to the specific duties outlined in the Regulation. In the real world, it is common for job roles to have overlapping duties that fall within and outside of the overtime exemption, sometimes known as "on-site" and "off-site" duties. While "on-site" tasks may not trigger overtime, "off-site" activities, such as administrative work, could fall under the general overtime rule under the ESA.

Legal examples

In Greg Howlett v 2417890 Ontario Inc. o/a JKAT Landscaping, the employee, Mr. Howlett, disputed the MOL’s investigation decision ("MOL Decision"), which stated he was not eligible for overtime as a landscape gardener. The Ontario Labour Relations Board (the "Board") considered this case and altered the MOL Decision. The main question was whether the landscape gardener exemption applied to all work performed by Mr. Howlett, given he spent some time doing construction work, which is outside the scope of landscaping. The Board concluded Mr. Howlett was entitled to overtime pay for the construction period. In other words, the employer was ordered to pay overtime for the work performed outside the scope of landscaping.

Similarly, while someone may be responsible for the duties exempted from overtime entitlements, such as pool maintenance during the summer months, if this designation does not continue when they perform different tasks for their employer during the winter, the employer has to pay overtime for their winter works.

Second, it is important to note not all employees in seasonal businesses are exempt from overtime pay. In Riverside Landscape Contractors Inc. v. Carr, the Board ruled an employee who drove a truck and worked on the construction of a stormwater facility for a landscape company was not a landscape gardener, and the landscape company was ordered to pay him overtime.

Seasonal employers need to understand the differences between duties that are and are not exempted from overtime pay before making overtime policies or budgets. This is particularly important when an employee's role involves a combination of different duties. To prevent legal complications, it is essential to keep accurate documentation of the time spent on different duties. A lack of clarity in determining job duties, such as in the cases discussed above, can lead to misunderstandings regarding overtime entitlements and result in expensive tribunal or court procedures.
Lai-King Hum is senior partner and founder of Hum Law in Toronto, specializing in employment law.
If you need guidance call (416) 214-2329 or complete a free assessment form online at gfl.me/hbJ7.

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