What is an Averaging Agreement?

Alberta’s Employment Standards Code requires employers to pay employees for all overtime hours worked. However, if an averaging agreement is established, the rules for calculating overtime pay change.

An averaging agreement is an agreement between an employee and employer that allows the employee to work a modified schedule. It also benefits the employer by averaging out an employee’s hours across multiple weeks, which may exempt the employer from having to pay for overtime. Agreements can apply to one employee or a group.

How do averaging agreements work?

A HWAA can be requested by the employee or employer, while a FAA can only be requested by the employee. The agreement must specify only one schedule for the employee to follow and it must be provided to them ahead of time. An averaging period must also be established. Its length will be determined by the type of averaging agreement.

Compressed Work Week Arrangements

Previously, compressed work week arrangements were available as an averaging agreement option. This arrangement allowed employees to work fewer days during the week and over 8 hours on their work days without it being considered overtime.

Do you need advice on overtime pay and averaging agreements?

We help employers comply with the law by understanding how to pay employees correctly for overtime. If you have questions about the types of averaging agreements, averaging periods or daily overtime, speak with one of our advisors today: 1-888-219-8767.