What are Averaging Agreements? 

When an employee exceeds their normal working hours, any additional hours are considered overtime. And as an employer, you are required to pay your employees for all overtime hours worked in accordance with the minimum overtime rate in Manitoba. 

However, an alternative is to enter into what is known as an Averaging Agreement with the employee. An Averaging Agreement averages out an employee’s hours over a set period (a maximum of 12 weeks) instead of working the same amount each week. But, the average work hours cannot exceed the maximum number of work hours set by the province, which is 40 hours per week. On odd weeks, an employee may work a maximum of 60 hours a week. However, the total work period must average out to 40 hours a week. For an employee to qualify for an Averaging Agreement, they must work a minimum of 30 hours per week. Averaging Agreements can be in place for a maximum of three years. 

Averaging Agreements are an ideal for workers whose hours fluctuate. 

What is required in an Averaging Agreement? 

For an Averaging Agreement to be considered valid, there are criteria that it must satisfy. 

It must be: 

  • Presented in writing
  • Drafted at least one week before the new schedule begins
  • Specific about the employee or group of employees the agreement is referencing 
  • Signed by the employer and employee or by at least 75% of affected employees
  • Posted on the premise where the affected employees can see it.
  • Posted on the premise where the affected employees can see it.

It also must specify the: 

  • Start and end dates, to a maximum of three years. 
  • Length of the averaging cycle to a maximum of 12 weeks. 
  • New work schedule to reflect daily and weekly hours. 
  • Employee or group of employees the agreement is referencing. 

Averaging Agreements do not require approval from Employment Standards. 

The Averaging Agreement Cycle Guidelines 

Averaging Agreements allow employers a level of flexibility and access to their employees when they need them most. However, they must adhere to these guidelines:  

  • Schedules can be flexible. However, an employee may not work more than 12 hours per day and 60 hours per week without the hours being considered overtime.
  • The Averaging Agreement cycle can be set to a maximum of 12 weeks. However, the total hours must average back 40 hours or less per week over the cycle.

Can I exceed the maximum number of hours of an Averaging Agreement? 

No. If you would like to exceed the maximum hours of the Averaging Agreement cycle, you must apply for an Averaging Permit. 

An Averaging Permit is used when an employer requires an employee more hours than an Averaging Agreement allows for. Unlike Averaging Agreements, Averaging Permits must be approved by Employment Standards. 

Need help with Averaging Agreements? 

Thinking about entering into an Averaging Agreement? Need help drafting the documentation? Looking for advice on a pre-existing agreement? Employ Line is the spot for you. Call Employer Line today at 1-888-219-8767 , and an Employer Line expert will be happy to help with all things Averaging Agreements.