Can highly paid financial services employees, such as financial advisors, analysts and investment bankers, claim overtime pay?
Yes. Simply because an employee is well remunerated and receives a salary instead of an hourly wage, as well as other forms of compensation, such as a bonus or stock options, does not mean that the employee is disentitled from overtime pay. This is of particular concern in the financial industry, where it is often the norm for employees in the role of financial analyst, investment advisor or investment banker to work long hours. In two class actions, yet to be certified, such employees are claiming unpaid overtime. In one, Rosen v. BMO Nesbitt Burns, Yegal Rosen, on behalf of all investment advisors, financial representatives and investment consultants employed by BMO Nesbitt Burns in Ontario since 2002, is asking the Ontario Superior Court to certify a class action in the amount of $100 million against the brokerage. The claim alleges that Mr. Rosen routinely worked 60 to 70 hours a week, without being paid overtime, and that “the pressure to work overtime …was pervasive.”
Similarly, in Brown v. CIBC and CIBC World Markets, two former CIBC employees are claiming $350 million in general damages for their class for unpaid overtime, as well as an order that CIBC comply with the applicable employment standards legislation. Amongst the allegations contained in the statement of claim, is that it is CIBC policy that employees of CIBC or their subsidiaries with a “Salary Level 6” or higher, are deemed ineligible for overtime pay. The proposed class includes analysts, investment advisors and other well compensated employees. While neither of these class actions have yet been certified, they are indicative of a significant area of potential liability for other employers in that industry.
Why aren’t such employees exempt from overtime?
Under employment standards legislation, such as the Ontario Employment Standards Act, 2000, there exist only a few narrow exemptions from entitlement to overtime pay: occupying a managerial or supervisory role, information technology professionals, and other prescribed professionals such as lawyers, doctors, teachers, dentists and professional engineers (the exemptions vary slightly according to jurisdiction). As a result, most employees in the financial industry, such as financial analysts, investment advisors and investment bankers, are not exempt from overtime. They are entitled to overtime pay (one and a half times their hourly rate of pay) per hour worked in excess of the threshold set out in the applicable employment standards legislation.
What can employers do to ensure they are compliant with overtime legislation?
The first step is to conduct an audit of the classes of employees that are considered overtime ineligible or exempt. This should be compared against the permissible exemptions in the legislation to determine if there are any gaps. Employers should also review their overtime policies, and, at a minimum, ensure compliance on a go forward basis. In some cases it may be appropriate to consider a redress plan.