Entitlement to Overtime Pay in Investing Banking Sector – Basic Legal Principles [video]

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This lecture deals specifically with the investment banking sector and the rights of non-managerial employees to overtime pay in this sector.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

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Welcome everyone, this is Amer Mushtaq from You Counsel. Today, we’ll talk about overtime pay with respect to the Investment Banking sector. Over the course of the last few years, we have had a large number of employees from Investment Banking sectors who approached us for different Employment Law matters, and we realized that almost all of them had no understanding of their overtime pay rights in their sector. So, we decided to present this lecture so that other employees in the Investment Banking sector can understand this area of law.

We’ll begin with our usual disclaimer that this course is not legal advice, so, if you have any specific questions you must contact a legal professional.

When we’re talking about overtime pay in Investment Banking sectors the kind of employees we’re talking about are Equity Research Associates, Equity Research Analysts, Investment Banking Analysts or any other term, similar term that is used for these employees, those are sort of the subject matter of today’s discussion.

But keep in mind that the principles we’re talking about for overtime pay are equally applicable. We actually have another lecture on overtime pay in general, which talks about who are people who are entitled to overtime pay and what kind of employees are exempt for overtime pay. So if you want to understand the overtime pay area of law more broadly please check our other lecture on overtime pay.

So, is an Equity Research Associate or an Analyst entitled to overtime pay? The answer is absolutely yes. And this entitlement arises from Employment Standards Act 2000, which is a Provincial Legislation. So if your employer, your Investment Bank, is provincially regulated then the legislation that governs your employment relationship is Employment Standards Act 2000 and this legislation says that if you work for more than 44 hours in a week then you are entitled to time and a half or the additional hours of the time that you work per week. Similarly, if you work for a federally regulated employer then the Canada Labor Code would apply, and then Canada Labor Code has hours for overtime, I believe it’s 40 per week so any time if you work for more than 40 hour you may be entitled to overtime pay. And so these legislations are quite detailed you can review those and they’re also covered in our other lecture, but the idea is that you are entitled to overtime pay unless you fall under some of the exemptions.

So everybody’s entitled to overtime pay unless an exemption applies, and you can look at those exemptions. But we’re covering specifically the Investment Banking sector so I will briefly tell you whether you are entitled to or not and what are the things to look for.

One of the issues that we always deal with our clients is somehow our clients believe that if they earn a lot of money $200,000, $300,000 or so that you may disentitle them to overtime pay. What I want you to understand is that whether you earned $30,000 per year or $150,000 or more, in law it makes no difference. The law, the statute, does not say that overtime pay is limited to people who earn X amount of dollars. So your income level or your bonus entitlements have no bearing on your right to overtime pay.

What does matter is whether you are an employee in a supervisory capacity or not. If you are a supervisory employee, meaning that you have people reporting to you, you have some role in hiring and firing of employees, you write evaluation reports, you have some control over other employees who may be considered your subordinates, then in that situation you will fall under the supervisory exemption or the managerial exemption for overtime pay, and you will not be entitled to overtime pay. But in our experience most of the Equity Research Associates or Analysts have no one reporting to them, and they are essentially on their own, or reporting to their manager or supervisor for their work. And they work long hours, and essentially under the legislation they’re entitled to overtime pay.

When you understand the basic part that you are indeed entitled to overtime pay you also must understand that if you seek in a court the payment of unpaid overtime, the burden lies on you the claimant to prove that you have indeed worked overtime. And so you must have some records to prove that you have worked overtime hours, and then at times the court asks you to prove on a week by week basis what hours you had actually worked.

So, how do you get the proof of overtime pay or overtime hours? There are different ways that you can figure that out. Obviously the most simple way is that you have a spreadsheet or some document where you have documented all the hours that you have worked and you keep those as record and that will be your contemporaneous record that you can you can show to the court to establish that you have worked overtime hours. But if you are going backwards, having now realized that you are entitled to overtime pay and had not maintained any records, one way that you can figure out what hours you have worked is really by computer log-ins. These could be local log-ins to your computer or to your company’s intranet or your Citrix logon and that information is maintained in the security system security logs of that company, and so you are entitled to obtain that information in litigation and the employer is required to produce that information, so that’s one source of information. That can give a very good sense of what were the hours that this particular employee had worked.

Another piece of information comes from the access cards. These are the scan cards that you used to enter into your office building or your office and they can also either confirm the computer login information or add some more value to it. Obviously the access cards will not provide complete information because oftentimes employees are not working from their office, they may be working from home or elsewhere, so access cards will not provide complete information, but at least they can provide or substantiate information of your claim about the hours that you have worked.

Also that you can look towards your email correspondence or other electronic transactions that you may have done. You know the emails that you may have sent at the late hours or early hours of the morning or late hours in the evening, they have time stamps so they can prove that you were actually working at that time. And with the present social media you know all the activities that one person is performing in different places are somehow being logged, and so I think increasingly in the coming years it will be possible to actually accurately determine what a person was doing at what time and what kind of activity. So it’s not something that’s that is too complicated, it is spread over a different number of, you know, sources of electronic information, but it can be obtained. And there could be employee logs that you may have maintained or the company may have maintain, sometimes especially in large accounting firms we know that they have a time capturing mechanism, electronic mechanism by which they capture each employee’s time at work. And so that information can be obtained if your company uses that information.

What you want to understand is that under the Employment Standards Act the burden is on the employer to make sure that they keep all those records for overtime hours. But when you are an Investment Banking Associate or Analyst there’s a basic challenge between what you are saying and what your employer’s position is. An employer may take the position that you’re not entitled to overtime pay and therefore they had no reason to log your overtime hours. So it may come down to you to make sure that you have some evidence to substantiate that you had indeed worked long hours.

Another factor that is helpful is obviously witnesses, you can bring in witnesses who have worked with the you who can substantiate your claim that you had worked long hours, and similarly industry practices are also relevant. I mean it is commonly known that employees who work in Investment Banking sectors work significantly long hours, this is not a surprise, it shouldn’t come as a surprise to the decision makers or to anybody who is dealing with this matter.

What about the time period? If you if you figure out or you learn that you’re entitled to overtime pay how far can you go back? If you are bringing an action in the court then you can go as far back as two years, and if you are bringing a complaint under Employment Standards Act to the Ministry of Labor for unpaid overtime hours then the end time period is much less, I believe it’s a maximum of six months from the day that you file your complaint or maybe even less. So your better approach in with respect to seeking unpaid overtime is commencing a court action, which is two years.

And the other part that you want to keep in mind is the Principle of Discoverability and we actually had effectively argued this principle. Principle of Discoverability essentially takes away this two years limitation. So you can go as far back as 15 years or 20 years of unpaid overtime if you can argue this Discoverability principle. And I’ll tell you briefly what it is by giving an example.

So, let’s say if you have a car accident, and after the accident you go and get some medical tests done and the determination is that you have no injuries arising from that accident, you’re absolutely fine. And then four years down the line you have some sort of medical problem, and when that is investigated through medical examinations it is revealed that the source of that problem was really the accident that took place four years ago. Now you had done everything reasonable post the accident to figure out whether there was some problem caused by the accident and you found nothing, and it was not until four years later that you found that the accident did indeed cause you some problems. So in that situation what the court will consider is that the discoverability of that problem was when you could objectively find out when the problem arose, which was four years after the accident. So from that time onward you’ll have two years to file your claim.

So, how does that apply in overtime situations? Until today you may not have known that you are entitled to overtime pay, and you have worked for a company or companies for the last 10 years, and you believe that, you know, you fit in the criteria that you are entitled to overtime pay and it is only today that you have learnt it was the employer’s burden to make sure that they document overtime hours, they give you overtime pay. They failed to meet those obligations, you discovered it today, and so as of today, from today onwards, you have two years to sue, to bring a court action against all of those employers for the past 10 years, 12 years or whatever. And we were able to make this argument in a class action lawsuit against a very large company and that issue was never tested in court but it got resolved through settlement of that matter.

So, keep the time period in mind, keep an understanding of the fact that you may be entitled to overtime pay and make sure that you keep records, these records could be as simple as spreadsheets that you have maintained contemporaneously while you are working with that employer, but keeping those records is important.

So, what I want you to carry from this lecture essentially is that do not assume that you’re not entitled to overtime pay. Also keep in mind that if you are entitled to overtime pay it may have a significant impact on your severance payment. How? Because severance payment is calculated on the basis of your total income and if you were entitled to overtime pay for the past periods then your total income was actually higher, and if your total income was higher your severance payment correspondingly should be higher too.

So, always keep records, you know document, document, document, at this point cannot be emphasized enough because you would need some evidence to prove that you had worked long hours and if you are in doubt always consult an employment lawyer to make sure that you know what your rights are.

Hopefully, this was helpful in giving you some understanding of your rights for overtime pay. Please provide us with your comments, any more questions, any specific issues with respect to these legal matters that you have in mind, please let us know, and we’ll be happy to talk about those issues in our future lectures and thank you for watching.

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