The legislation on this page is now in effect

For information on Employment Standards legislation that was in force until December 31, 2017, go to https://work.alberta.ca/employment-standards-2017.html

Basic rules

  • There are 2 types of averaging agreements:
    • hours of work averaging agreement (between a group of employees or an individual)
    • flexible averaging agreement (individual only)
  • They allow employers to schedule an employee, or group of employees, to work longer hours per day paid at the employee’s regular wage rate.
  • The employer will average an employee’s hours of work over a period to determine overtime pay or time off with pay.
    • Up to 1-12 weeks for hours of work averaging agreements (HWAA)
    • Up to 2 weeks for flexible averaging agreements (FAA)
  • Extending the averaging period for an HWAA beyond the 12-week maximum requires a variance issued by the Director of Employment Standards.
  • Extending the averaging period for an FAA beyond the 2-week maximum will not be allowed.

Previous compressed work week arrangements

Compressed work week arrangements entered into before January 1, 2018 will remain valid for a transitional period.  This period depends on how the arrangement was entered into.

If the compressed work week arrangement was entered into through a collective agreement, it remains valid until the day a new collective agreement is entered into.

Otherwise, the compressed work week arrangement remains valid until the earlier of:

  • January 1, 2019 or
  • termination of the compressed work week arrangement

Hours of work averaging agreements (HWAA)

HWAAs can be between groups of employees and an employer or an individual employee and employer. The agreements provide predictability in scheduling for employees.

HWAA requirements

Group HWAAs can be entered into at the request of a group of employees or employer, with consent to enter the agreement by majority support of the affected employees. If a group agreement applies, any new employees hired into the group after the agreement is made are deemed to consent and are bound by the agreement.

Individual HWAAs can be entered into at the request of an individual employee or employer.

HWAAs can be entered into as part of a collective agreement. They must be in writing between an individual or group of employees and the employer and include:

  • start and end date
  • term of agreement that cannot exceed 2 years unless it is part of a collective agreement and terminates the day a subsequent collective agreement is entered into
  • number of weeks the hours will be averaged over (up to 12 weeks)
  • work schedule which identifies all the work days and the number of hours to be worked on each of those work days in the averaging period
  • only one work schedule per agreement
  • scheduled daily and weekly hours of work cannot exceed:
    • 12 hours per day, and
    • 44 hours per week or an average of 44 hours per week
  • how overtime pay and time off with pay will be calculated

Samples: individual HWAA (PDF, 100 KB) or group HWAA (PDF, 100 KB)

Notice of agreement

Employees must be provided with a copy of the agreement, whether it’s an individual or group agreement, as soon as possible. However, before the commencement of the agreement the employer must (subject to collective agreements):

  • post a copy on the employer’s website and in the workplace where it can be seen by affected employees (for group agreements)
  • provide a copy to each employee who is party to the agreement

These requirements also apply when HWAAs are amended as a copy must be provided before the amendments come into effect.

Hours of work

The averaging agreement must specify only one work schedule that applies to the employee or employees bound by it.

An employee’s work schedule must be provided in advance.

Change in work schedule

Employers can occasionally make a temporary change to the work schedule that was not requested by the employee if they provide the employee with 2 weeks’ notice. If a change is made with less than 2 weeks’ notice, any hours worked in excess of 8 hours in a work day that were not in the previous schedule are calculated as overtime hours.

Exceptions exist if the change was made because:

  • an accident occurs
  • urgent work is necessary
  • an unforeseen or unpreventable circumstance occurs

However, 24 hours’ notice of shift changes and 8 hours rest between shifts is always required.

Making-up missed shifts

If an employee makes up a shift on an unscheduled work day as a result of being absent on a scheduled work day within the same averaging period, the employee is paid regular wages and any applicable overtime in accordance with the originally scheduled shift.

Overtime

Overtime calculated on a daily and averaging period basis. Overtime is calculated on the greater of hours worked in excess of:

  • 8 hours a day (if scheduled for less than 8 hours) or daily scheduled hours (if 8 or more hours were scheduled)
  • 44 hours a week (in a 1-week averaging period) or an average of 44 hours a week (in a multi-week averaging period)

When overtime is payable

Overtime is payable as daily overtime or averaging period overtime.

  • Daily overtime is payable at the end of the pay period.
  • Averaging period overtime is payable at the end of the averaging period.

Overtime owed is the greater of the daily or averaging period overtime. Therefore, if the employee is to receive overtime pay, employers must subtract the total daily overtime paid to employees from the total averaging period overtime owed to determine whether overtime is owed at the end of the averaging period.

Payment of any remaining averaging period overtime is to be paid within 10 days of the end of the pay period that the averaging period ends.

Banking overtime

If an employer and employee agree to time off with pay instead of overtime pay, overtime hours are banked at a rate of 1.5 hours per overtime hour. See Overtime hours and overtime pay for more information.

Termination or end of agreement

When an employee’s employment terminates or is no longer bound by the agreement, the overtime hours are calculated the same way as if the employee worked the remaining scheduled shifts in the averaging period (daily or averaging period rules apply).

Cancellation of an HWAA

  • Employers and employees may renegotiate or cancel the individual or group (if majority consents) agreement at any time.
    • An individual employee can’t exit a group agreement.
  • Either party of the agreement may cancel the agreement with 30 days’ notice.
    • Cancellation takes effect at the end of the averaging period in which the 30 days’ notice ends, which may be longer than 30 days in some cases.
  • If a collective agreement is in place, the cancellation must be in accordance with the collective agreement.

Cancellation of an HWAA by the Director of Employment Standards

The Director of Employment Standards may cancel an averaging agreement at any time after considering any factors the Director deems relevant. These may include:

  • whether the employer has a history of non-compliance with Employment Standards
  • if the employer has outstanding enforcement actions

If the Director cancels an agreement, the employer will be notified and can appeal the Director’s decision. See Filing an appeal for more information.

Flexible averaging agreements (FAA)

FAA can only be between an individual employee and an employer. The agreements provide flexibility in scheduling for an employee.

FAA requirements

FAAs between the employer and employee can be entered into only at the employee’s request. It can only be entered into if the employee works at least 35 hours per week.

FAAs can be entered into as part of a collective agreement. They must be a written agreement between an individual employee and employer and include:

  • Start and end date
  • Term of agreement that cannot exceed two years unless it is part of a collective agreement and terminates the day a subsequent collective agreement is entered into
  • Number of weeks (maximum of two) the hours will be averaged over
  • Number of work days and hours per day in the averaging period
  • How overtime pay and time off with pay will be calculated
  • Daily overtime threshold (which cannot exceed 10 hours)

The scheduled daily and weekly hours of work must not exceed 12 hours per day or an average of 44 hours per week.

A copy of the FAA must be provided to all affected employees. An employee’s individual work schedule must be provided in advance of when they are expected to work, and an agreement can only have one work schedule.

Sample: FAA (PDF, 100 KB)

Notice of agreement

The employee must be provided with a copy of the agreement as soon as possible. However, before the commencement of the agreement the employer must provide a copy to the employee.

These requirements also apply when FAAs are amended as a copy must be provided before the amendments come into effect.

Hours of work

The averaging agreement must specify only one work schedule that applies to the employee.

An employee’s work schedule must be provided in advance.

Change in work schedule

Employers are not restricted from making changes to the employee’s work schedule, however, 24 hours’ notice of shift changes and 8 hours rest between shifts is always required.

Overtime

Overtime calculated on a daily and averaging period basis. Overtime is payable on the greater of hours worked in excess of:

  • the daily number of hours specified in the agreement (which can’t be more than 10)
  • 44 hours a week (in a 1-week averaging period) or an average of 44 hours a week (in a multi-week averaging period)

When overtime is payable

Overtime is payable as daily overtime or averaging period overtime.

  • Daily overtime is payable at the end of the pay period.
  • Averaging period overtime is payable at the end of the averaging period.

Overtime owed is the greater of the daily or averaging period overtime. Therefore, employers must subtract the total daily overtime paid to employees from the total averaging period overtime owed to determine whether overtime is owed at the end of the averaging period.

Payment of any remaining averaging period overtime is to be paid within 10 days of the end of the pay period that the averaging period ends.

Banking overtime

If an employer and employee agree to time off with pay instead of overtime pay, overtime hours are banked at a rate of 1.5 hours per overtime hour. See Overtime hours and overtime pay for more information.

Flexible time

Flexible time is paid time off that is provided when an employee works more than their scheduled hours in a day, but not overtime hours.

When an employee earns flexible time, the employer must provide the employee with time off with pay at their regular wage rate.

The time off must be taken before the end of the next averaging period. If it isn’t the employer must pay the employee their regular wage rate for the hours not taken.

Calculating flexible time

Before calculating flexible time owed, overtime owed must be calculated.  See Overtime for more details.

The calculation of flexible time depends on whether averaging period overtime is owed.

If no overtime is owed or daily overtime is owed, flexible time is calculated on a daily basis.  Daily flexible time owed is any hours more than scheduled hours but less than the daily overtime threshold.

If averaging period overtime is owed, some additional calculations are needed.  These calculations ensure that hours are not double counted as both averaging period overtime and flexible time.  The calculation is as follows:

  • Daily flexible time is calculated as any hours more than scheduled hours but less than the daily overtime threshold.
  • Averaging period flexible time is calculated by adding up daily flexible time for all the days in an averaging period.
  • Averaging period overtime is calculated as any hours over an average of 44 hours a week.
  • Total flexible time owed is calculated as averaging period flexible time minus averaging period overtime.

Termination or end of agreement

When an employee’s employment terminates or is no longer bound by the agreement, the overtime hours are calculated the same way as if the employee worked the remaining scheduled shifts in the averaging period (daily or averaging period rules apply).

Cancellation of an FAA

  • Employers and employees may renegotiate or cancel the agreement at any time.
  • Either party of the agreement may cancel the agreement with 30 days’ notice.
  • Cancellation takes effect at the end of the averaging period in which the 30 days’ notice ends.If a collective agreement is in place, the cancellation must be in accordance with the collective agreement.

Cancellation of an FAA by the Director of Employment Standards

The Director of Employment Standards may cancel an averaging agreement at any time after considering any factors the Director deems relevant. These may include:

  • whether the employer has a history of non-compliance with Employment Standards
  • if the employer has outstanding enforcement actions

If the Director cancels an agreement, the employer will be notified and can appeal the Director’s decision. See Filing an appeal for more information.

How the law applies

Part 2, Section 23.1 of the Employment Standards Code and Part 2, Division 1 and Division 2 of the Regulation outline the rules for averaging agreements.

Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.

Contact

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