Manager or Employee – Why Does It Matter?

With contributions by Trevor Thomas, Lawyer.

Manager-corp ladder

You’ve just been offered a promotion to [Fill in the Blank] Manager – congratulations! If you’re lucky, your change in job title will bring with it increased compensation and authority.

In British Columbia, there are also employment law implications to holding a management position. This post deals with some of the most basic of these implications, which are contained in provincial employment standards legislation. Under the Employment Standards Act, a worker’s entitlement to overtime or statutory holiday pay depends on whether she is a “manager” or an “employee”: employees are entitled to additional pay for working overtime and stat holidays, but managers are not.

Given this, employers looking to cut costs might be tempted to start using the Manager title more liberally. Not so fast. Just calling a person a manager is not enough to make him one. Rather, it is the substance of a person’s employment – what the worker actually does on a daily basis – that determines whether he is a manager or employee. If a worker’s principal employment responsibilities consist of supervising or directing (or both) human or other resources, he’s a manager.

So, what constitutes supervising or directing? Here are some examples of activities that may qualify:

    • hiring, supervising, evaluating, disciplining and dismissing staff;
    • directing what work is to be done, how it is to be completed, when it is to be completed and being accountable for the outcome of such work;
    • developing, delivering, and evaluating programs and services;
    • leading projects including strategic planning, budgeting, project monitoring and evaluation;
    • committing and/or authorizing the use of company resources;
    • preparing, delivering and evaluating business and marketing plans; and
    • developing, monitoring, and evaluating financial plans, including budgets, cost estimates and tenders.

Keep in mind that occasionally performing supervising and/or directing activities will likely not be enough to make a person a manager. Rather, to be a manager under the Employment Standards Act, a person must perform supervising/directing activities as her principal responsibilities. Whether a worker’s supervising/directing duties are her principal responsibilities will depend on the following:

    • the amount of time she spends supervising and directing;
    • her employment duties and the reason for them;
    • the degree to which she exercises management power and authority and its impact on the business;
    • the priority placed on the responsibility by the employer; and
    • the nature and size of the business.

manager-clockOTEmployers should keep all of the above in mind when establishing and implementing overtime policies, and when handing out the title of Manager. You may also find it helpful to review the Fact Sheet on Managers prepared by the Employment Standards Branch.

Have questions about your overtime policies, or whether an employee is an employee or manager? Contact us!

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