This week we bring you another in our Bill 148 client questions series. Today we will tackle the three hour rule. This change comes into effect on January 1, 2019, in the category of Employment Standards Act scheduling changes.

Q: Does the three hour rule apply to salaried employees?

A: It’s easy to see how to calculate three hours of pay for an employee who is paid by the hour. This client question asks if salaried employees are entitled to the three hours of pay. They are! Our answer to this question will also address how to calculate the entitlement when a worker is paid a salary.

The three hour rule, which again does not come into force until January 1, 2019, reads:

Three hour rule

21.3 (1) If an employee who regularly works more than three hours a day is required to present himself or herself for work but works less than three hours, despite being available to work longer, the employer shall pay the employee wages for three hours, equal to the greater of the following:

1. The sum of,
   1. the amount the employee earned for the time worked, and
   2. wages equal to the employee’s regular rate for the remainder of the time.
2. Wages equal to the employee’s regular rate for three hours of work. 2017, c. 22, Sched. 1, s. 12.

Exception

(2) Subsection (1) does not apply if the employer is unable to provide work for the employee because of fire, lightning, power failure, storms or similar causes beyond the employer’s control that result in the stopping of work. 2017, c. 22, Sched. 1, s. 12.

The three hour rule entitles employees to be paid for three hours of work, even where they did not actually work for three hours. This covers situations such as being sent home early from a shift. Other sections of this amendment specify that employees will be entitled to be paid for three hours when their shift is canceled on less than 48 hours notice and when they are required to be on-call, regardless of whether or not they are called into work, or called in for less than three hours.

Employees who are paid a salary are still entitled to pay under the Three Hour Rule, even though they are not paid by the hour. Under the three hour rule, the employee is entitled to three hours at their regular rate. To arrive at the regular hourly rate of a salaried employee divide the amount earned by the employee in a given work week by the number of non-overtime hours the employee actually worked in that week.

Also note the exception to this rule, which provides that it will not apply, and the employer will not have to pay the employee for three hours, where they are unable to provide work because of “fire, lightning, power failure, storms or similar causes beyond the employer’s control that result in the stopping of work.”

Navigating the changes brought by Bill 148 presents a serious challenge for most employers. If you’re interested in reading more about Bill 148 check out our FAQ blog from last week on vacation entitlements as well as our previous blog posts on the subject. We are also in the process of rolling out a full Bill 148 compliance program, including webinars and an ebook, designed specifically for employers.

If you need help understanding how to comply with the new and upcoming law, we’d be pleased to assist.