Overtime Under the Canada Labour Code: A Guide for Federally Regulated Workers

The federal regime is the only one of the three covered here with a daily overtime threshold. Under s. 169(1), standard hours are eight hours in a day and forty hours in a week. Overtime is any time worked beyond those standard hours — meaning you can earn overtime by exceeding 8 hours in a day even if your week stays under 40, or by exceeding 40 hours in a week even if no single day passed 8. Whichever limit you cross first triggers the premium.

Under s. 174(1)(a), overtime must be paid at a rate of wages not less than one and one-half times the regular rate of wages. That 1.5× is the legal floor — your collective agreement can promise more, never less. See Overtime Pay in Canada: When You're Owed Time-and-a-Half for how the base rate is defined.

The federal Code offers an alternative to cash: time off in lieu. Under s. 174(1)(b), on the employee's written request the employer may grant not less than 1.5 hours of paid time off for each hour of overtime worked, instead of paying it. But this banked time comes with strict timing rules that protect you:

• It must be taken within 3 months of the pay period in which the overtime was worked — or a longer period agreed in writing, up to 12 months maximum outside a collective agreement (s. 174(3)).
• If it is not taken in time, it converts back to a monetary debt. Under s. 174(4), the employer must, within 30 days after that period ends, pay the overtime at not less than 1.5× the regular rate the employee earned on the day the overtime was worked.
• The same applies on termination (s. 174(5)): unused banked overtime becomes payable in money.

The practical upshot: banked overtime that was never actually taken as time off does not disappear. It becomes a 1.5× cash debt — so if you left a job with unused banked hours, or an old bank was never drawn down within its window, that is money owed.

Where the nature of the work requires an irregular distribution of hours, the Code allows hours to be averaged over a period of two or more weeks under prescribed conditions (s. 169(2)). A valid averaging arrangement changes how the weekly threshold is applied — the 40-hour line is assessed on average over the period rather than week by week. Averaging only bites where a proper arrangement is in place; absent one, the firm 8-hour-day and 40-hour-week thresholds govern.

Two distinct clocks run in the federal regime, and confusing them can be fatal to a claim:

• The complaint deadline is 6 months. A complaint of unpaid wages must be filed within 6 months of the last day the employer was required to pay them (s. 251.01). The Head can extend this in certain cases.
• The recovery depth is 24 months. A payment order cannot reach wages owed for the period before the 24 months immediately preceding the complaint — or, if employment ended first, the 24 months before termination (s. 251.1(1.1)).

So you must act within 6 months, and when you do, the order can reach back up to 24 months. Do not assume the two-year reach gives you two years to complain — it does not.

The employer's own records are your evidence. Under the Canada Labour Standards Regulations, s. 24, a federal employer must keep, for each employee, the hours worked each day and the amounts paid as overtime pay, and must retain these records for at least 36 months (three years). If your employer's payroll shows fewer overtime hours than your own log, that gap is the heart of a claim — and the employer is obliged to have kept the underlying record.

• Unpaid Overtime in Canada: The Complete Guide
• Are You a Federally Regulated Employee? Why It Changes Your Overtime Rights
• 40 or 44 Hours? The Overtime Threshold That Decides When You Get Paid More
• Overtime Pay in Canada: When You're Owed Time-and-a-Half (1.5×)