Regular rate of pay

A buyer meets the regular rate when calculating overtime and holiday pay for the staff who come with the business. Section 1(1) of the Act defines it, subject to any regulation, as the amount earned for an hour of work in the employee’s usual work week, not counting overtime hours, for an employee paid by the hour. Otherwise it is the amount earned in a given work week divided by the non-overtime hours actually worked in that week.

Where it is used

Section 22(1) requires overtime pay of at least a stated premium on the regular rate for each hour over the overtime threshold, subject to s.22(1.1) where an employee has two or more regular rates. The ministry’s overtime guide says an employer cannot drop an employee’s regular rate in a week when overtime was worked and then calculate the overtime on the lower rate. The Act also refers to the regular rate for wages for hours worked on a public holiday.

What to ask

• Which employees are paid by the hour and which are not.
• Which employees have more than one rate of pay for the same employer.
• How the seller’s payroll records the regular rate and the overtime hours.

See payroll on closing day and the managerial or supervisory exemption. This entry covers Ontario only; check the rules where you are.