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Banking overtime hours — how does it work? Paying out time bank upon termination.
By Annie Chong
|Canadian Payroll Reporter|Last Updated: 05/02/2016

Banking overtime hours

QUESTION: Our employees are allowed to "bank" their overtime hours so they can take time off work with pay at a later date. For banking their hours, do we use the actual number of overtime hours worked? When they take the time off, do we pay them their regular rate or the overtime rate?

ANSWER: Most jurisdictions in Canada allow employers to set up an overtime bank if their employees agree to it in writing or if it is part of a collective agreement. Instead of paying employees for overtime hours, employers may allow employees to "save" their overtime hours in a time bank and take the time off with pay at a later date.