An overtime bank (time bank) is an agreement between the employer and individual employees that allow overtime hours to be banked in exchange for time off at regular pay during regular working hours at some later date.
View the Time Bank Agreement Template for an example of what an overtime bank agreement could look like.
Employees Who Can Ask for an Overtime Bank Agreement
All employees who are eligible for overtime can request an overtime bank, including those working fewer than 30 hours per week. However, the employer cannot require employees to enter into an overtime bank agreement.
How Overtime Bank Agreements Work
For every hour of overtime worked, 1.5 hours must be banked. Hours withdrawn from a bank must be taken during an employee's regularly scheduled work hours, and at a time or times agreed to by the parties. If there is no agreement, the employer can schedule the time off by providing the employee with at least one week of notice.
All banked hours withdrawn from the bank are considered regular hours worked and go towards calculating the overtime threshold for the week. Time taken from the bank is paid at the employee's current regular hourly wage.
All banked time must be taken off or paid out at the employee's current regular wage rate within 12 months of the time it was banked. Any banked time not taken within the 12 month period must be paid out at the employee's current hourly wage. Employees can request payouts of banked time; and the employer may make payouts, without closing the bank.
Requirements for Overtime Bank Agreements
All overtime bank agreements must be:
- in writing;
- agreed to and signed by both employer and employees; and
- retained by the employer, with a copy going to each employee covered by the agreement.
Ending or Changing an Agreement
The employer and employee cannot end or change the agreement without giving advance notice in writing. The notice must be given at least one pay period in advance.
If the employee or employer ends the agreement, the employee can be required to use some or all of the time in the bank before the agreement ends. The employer could also choose to pay out the overtime in the bank.
Overtime Banks and Ending Employment
Any remaining banked overtime must be paid out within 14 days of the employee's last day of work.
If the employer is laying off or terminating the employee, the employer cannot substitute banked time for a working notice period required under the Act. In addition, overtime bank payouts cannot replace pay instead of notice.