Overtime and Averaging Agreements

Standard Work Week 
The standard work week in Prince Edward Island is 44 hours unless there is an averaging agreement or an Exemption Order issued by the Employment Standards Board. Each hour of work performed by an employee beyond 44 hours in any given week is considered an overtime hour. Each overtime hour must be paid at the overtime rate. Overtime pay must be paid at time and one-half of the employee’s regular rate of wages. 

Banking of Overtime 
Employers are required to pay employees for hours worked in addition to the standard work week. 

However, an employee can choose, instead, to accumulate or “bank” hours worked in addition to the standard work week to be taken later as paid time off if: 

1. The employee gives written notice to the employer to have such hours accumulated; and 

2. The paid time off is taken by the employee within 3 months of the work week in which the overtime was earned. 

Employers must give 1.5 hours of paid time off at the employee’s regular pay for each hour of overtime used. 

If an employee still has unused overtime hours when their job ends, the employer must pay them 1.5 times their regular wage for each hour of overtime.  

It is the employer’s responsibility to keep track of overtime hours and usage for the employee. 

Industry Exceptions to Standard Work Week 
The Employment Standards Board has issued an Exemption Order extending overtime hours for specific industries. Please contact the Branch for details about these industries.

Averaging Agreement 
An averaging agreement is a written agreement between an employer and an employee. It allows work hours to be averaged over 2 to 4 weeks instead of counting overtime each week. The agreement must clearly explain the time period, start and end dates, daily work schedule, and any renewal terms. Both the employer and employee must sign it before it begins. Under this agreement, an employee cannot be scheduled to work more than an average of 44 hours per week. Overtime is only paid if this average is exceeded, at 1.5 times the regular wage rate. The employee must also get at least 36 hours of rest in a row each week. If they do not, they must be paid overtime instead. Employers must keep a copy of the agreement for a set period of time.