A Primer on Payroll in Canada MODIFIED HOURS OF WORK AGREEMENTS AVERAGING HOURS Averaging hours means that hours of work may be averaged over two or more weeks if the nature of the work results in an irregular distribution of hours (as long as the averaged hours do not exceed the daily or weekly maximum hours of work). Example: Albert is employed in Ontario under a two-week averaging agreement. He works 50 hours in one week and 30 hours the next week. Under the two-week averaging agreement there would be no overtime payable because his average hours for the two weeks period are 40, which is below the weekly overtime requirement of 44 hours. (50 + 30) ÷ 2 = 40 COMPRESSED WORKWEEK A compressed workweek is one in which the number of working days per week is reduced and the number of hours worked per day is increased. This type of arrangement is suitable for such jobs as nursing and fire-fighting where employees generally work long hours for a few days in a row and then are off for several days. Example: Jane is a nurse and her regular workweek is 36 hours. Jane has selected to work a compressed workweek of three 12-hour shifts a week. ESTABLISHING A MODIFIED WORK AGREEMENT In jurisdictions that allow modified work agreements, the employer and employee must agree, in writing, and in some jurisdictions that agreement must be approved by the Director of Employment Standards. When designing a modified work agreement the employer must comply with legislation that defines: The maximum averaging period Maximum daily or weekly hours permitted When overtime becomes payable Whether ESA approval is required © The Canadian Payroll Association/L'Association canadienne de la paie 2020 11-103