In Alberta, a common practice among employers and employees is to enter into an averaging agreement. This agreement allows employers to average an employee`s hours of work over a period of time to determine if they have met the minimum standards for overtime pay.
However, it is important to note that there are specific requirements that must be met in order to create a valid averaging agreement. These requirements are outlined in the Alberta Employment Standards Code and failure to comply with them can result in significant penalties for employers.
Firstly, the agreement must be in writing and signed by both the employer and employee. It must also specify the duration of the agreement, which cannot exceed 12 months. Additionally, the agreement must specify the start and end dates of the averaging period, which cannot exceed four weeks.
Furthermore, the agreement must outline the types of hours that are eligible to be averaged, such as regular, overtime, and vacation pay hours. It must also identify the number of hours that the employee is expected to work during the averaging period.
Lastly, and perhaps most importantly, the agreement must provide that the employee’s average wage for all hours worked during the averaging period must be equal to or greater than the minimum wage requirements set out in the Alberta Employment Standards Code. This means that employees cannot be paid less than the minimum wage for their standard hours of work, even if the averaging of these hours brings the total hourly wage up to the minimum standard.
It is important for both employers and employees to understand their rights and obligations when entering into an averaging agreement. Employers should ensure that their agreements comply with the requirements set out in the Employment Standards Code to avoid penalties. Employees should be aware of their right to fair compensation for all hours worked and should seek legal advice if they believe their employer is violating the terms of the agreement.
In conclusion, while averaging agreements can be beneficial to both employers and employees, it is critical to ensure that they comply with the Employment Standards Code. Failure to do so can result in significant financial penalties and legal consequences. Employers and employees should seek out legal advice to ensure their agreements are valid and in compliance with the law.