What began as a dispute over a few days of unpaid wages escalated into a $185,000 award for unpaid overtime, wages and reprisal.
The Ontario Employment Standards Act (the “ESA”) sets out a baseline rule for overtime, providing that most employees are entitled to 1.5 times their regular pay for each hour worked beyond 44 hours per week. Certain employees, however, are exempt from overtime or are subject to a different overtime threshold.
Employers who misunderstand these rules, or retaliate against employees who assert them, can face substantial financial consequences, as was the case in a recent decision from the Ontario Labour Relations Board (the OLRB).
An Ontario employer attempted to avoid paying overtime by arguing that the employee’s records were inaccurate and that the employee was exempt from the standard overtime rules. Both arguments failed.
The Board ultimately ordered the employer to pay $185,000 in unpaid wages, overtime, and damages for reprisal, demonstrating how quickly an overtime dispute can escalate when employers fail to comply with the ESA.
An employer’s costly miscalculation of overtime
An Ontario employer was ordered to pay $185,000 after miscalculating overtime and terminating an employee who filed a claim under the Ontario Employment Standards Act. The Ontario Labour Relations Board found the employer failed to maintain overtime records, incorrectly applied overtime exemptions, and terminated the employee in reprisal for asserting their legal rights. The decision highlights the importance of proper record-keeping, correctly identifying overtime eligibility, and avoiding retaliation when employees raise employment standards concerns.
What the Ontario Labour Relations Board considered?
The Ontario Labour Relations Board (the “Board”) dealt with two key issues:
- Whether the employee was owed unpaid overtime wages
- Whether the employer terminated the employee in reprisal for asserting rights under the ESA.
Both findings ultimately worked against the employer.
The employer was ultimately ordered to pay a hefty sum of $185,000 for unpaid wages and compensation for reprisal.[1]
The decision serves as a cautionary tale for Ontario employers.
Where did the employer go wrong and what lessons can be learned?
Mistake #1: Failing to maintain proper overtime records
The employer attempted to argue that the employee’s overtime claim was inflated because it was calculated based on inaccurate timesheets.[2]
This argument failed in large part because the employer did not maintain its own records of hours worked for the employee, including overtime hours. The Board, therefore, relied entirely on the employee’s timesheets.
The Board also noted that the employer had reviewed and accepted those same timesheets during employment, only challenging their accuracy after the claim was advanced.
Employer Takeaway:
The ESA requires employers to:
- Keep accurate records of hours worked each day and week
- Overtime hours
In a dispute, inadequate record-keeping will almost always favour the employee’s evidence.
Mistake #2: Misapplying the overtime threshold
The employer argued that the employee was subject to a higher overtime threshold than the standard 44 hours per week.
The Board rejected this argument, finding that the employee’s duties did not fall within any exemption under the ESA.
Under the ESA, certain roles may be exempt from overtime, but exemptions depend on the employee’s real job duties, not their job title.
Once the correct 44-hour threshold was applied, the employee’s regular rate of pay and overtime hours were recalculated. Over a two-year period, that recalculation resulted in a significant amount owed for unpaid wages.
Employer Takeaway:
Before assuming an employee is exempt from overtime, employers should:
- Carefully review the ESA
- Examine the employee’s actual job duties
- Consult with an experienced employment lawyer
These steps should be taken before assuming an employee is exempt from overtime (or any other statutory entitlement).
It is the employee’s actual duties and the true nature of the working relationship, not their job title, that determine their legal rights and entitlements.
Incorrectly applying an exemption can create years of retroactive liability.
Mistake #3: Reprisal for asserting ESA Rights
The most costly mistake involved reprisal.
After the employee advanced a claim for unpaid overtime, his employment was terminated.
The Board concluded that the termination was in reprisal for asserting rights under the ESA.
Reprisal findings are serious and significantly increase financial exposure that can result in compensation well beyond unpaid wages.
Employer Takeaway:
When an employee raises an ESA issue, do not take it personally. Rather, treat it as a compliance matter and not as insubordination or misconduct.
Employers should avoid:
- Discipline or termination in close proximity to an ESA complaint
- Any action that could be interpreted as retaliation
In reprisal cases, the burden is on the employer to prove the decision was unrelated to the complaint.
Key lessons for Ontario employers
This decision highlights several important compliance lessons:
1. Maintain accurate time records
Employers must track hours worked and overtime to defend wage claims.
2. Apply overtime exemptions carefully
Employee duties, not job titles, determine eligibility.
3. Avoid reprisal when employees assert legal rights
Termination or discipline following ESA complaints will attract close scrutiny.
4. Seek legal advice before disputing overtime claims
Small disputes can escalate quickly when the ESA is misapplied
Frequently asked questions about overtime in Ontario
When are employees entitled to overtime pay in Ontario?
Most employees in Ontario are entitled to overtime pay of 1.5 times their regular wage for hours worked beyond 44 hours in a week under the Ontario Employment Standards Act.
Can an employer deny overtime if an employee’s timesheets are inaccurate?
Employers can challenge inaccurate records, but if the employer fails to maintain its own records, tribunals may rely on the employee’s evidence.
Are all employees eligible for overtime pay?
No. Certain roles are exempt from overtime, but eligibility depends on the employee’s actual job duties, not their title or position.
What is reprisal under Ontario employment law?
Reprisal occurs when an employer penalizes or terminates an employee for asserting rights under the Ontario Employment Standards Act, such as filing a complaint about unpaid wages.
What happens if an employer retaliates after an overtime complaint?
Employers may be ordered to pay unpaid wages, damages, and additional compensation, which can significantly increase financial liability.
Conclusion
Overtime disputes can quickly escalate when employers misunderstand their obligations under the Ontario Employment Standards Act, 2000. What may begin as a disagreement over a few unpaid hours can ultimately lead to significant liability, particularly where overtime exemptions are misapplied, proper records are not maintained, or an employee faces adverse treatment after asserting their rights.
The recent decision from the Ontario Labour Relations Board serves as a clear reminder that compliance with Ontario’s employment standards legislation is not optional. Employers must carefully assess overtime eligibility, maintain accurate time records, and approach employee complaints as compliance issues rather than disciplinary matters.
For employees, the case highlights an equally important point: you have legal protections when asserting your rights under the ESA, and employers cannot retaliate against you for doing so.
If you believe you have been denied overtime pay or experienced reprisal after raising concerns about your wages, the experienced employment lawyers at Whitten & Lublin can help.
Our team regularly advises employees across Ontario on their rights under employment standards legislation and can guide you through the process of recovering unpaid wages or pursuing a claim. Contact us online or call 416 640 2667.
Author – Marilou Lopes
[1] 614128 Ontario Ltd v Kinzett, 2026 OLRB 3771 at paras 30, 48.
[2] 614128 Ontario Ltd v Kinzett, 2025 OLRB 62626 at paras 20-24.
