Daylight Savings Time: how to handle payroll

Overtime and total hours worked is a key consideration for employers who have employees working when Daylight Savings Time ended on Sunday, Nov. 5, according to Abigail Omale, Associate at Osler, Hoskin & Harcourt LLP.

DST ended on Sunday when the clocks go back at 2 a.m., and some employees are entitled to an additional hour of pay if their shift fell during this time and the employer did not adjust the number of hours worked.

While the rules and overtime limits differ from province to province, employers should be aware if shifts fall during the time change, as the additional hour could go over an employee’s overtime. In British Columbia, employers will also have to consider if the additional hour went over an employee’s weekly overtime, and as the clocks changed on a Sunday, this overtime would be counted in the week following the shift, Omale said.

If a shift does go over an employee’s daily or weekly overtime, employers will have to compensate the additional hour at the overtime rate of time and a half.

“Employers should just be aware of their daily and weekly overtime limits and pay accordingly,” she said.

However, not all employees qualify for overtime pay even if their shift falls during the clock change. Each province has their own exemptions, but generally, true managers, lawyers, law students, doctors, medical students and certain accountants do not qualify for overtime pay. In some provinces, like Alberta, British Columbia and Ontario, IT professionals in charge of developing, analysing and conceptualizing software also fall into the exemption category, Omale said.

“The key ones we usually see – the ones that go across most provinces are managerial exemptions, and professional service exemptions,” she said. “Computer services varies from province to province and each one has slightly different descriptions of what qualifies.”

Not only do employers need to be aware of overtime limits, but they should also be aware of their payroll systems, as some don’t have Daylight Savings requirements in them. Employers may need to make manual adjustments so that these systems accurately reflect the number of hours an employee has worked during this time, Omale said.

“Employers may need to make manual adjustments and should be aware that there might be problems with their first payroll after daylight savings,” she said.