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Are Your “High-Tech” Employees Exempt From Overtime Under the Employment Standards Act?

Nitrogen Studios, the Vancouver animation firm behind the animated film Sausage Party, was recently ordered by the BC Employment Standards Branch to pay overtime pay to non-unionized animators on the basis that its employees did not fall within the “high technology professional” exemption in the Employment Standards Regulation. The animators claimed that they were owed overtime for the lengthy shifts they put in during the production of the film. Nitrogen Studios responded that it did not have to pay overtime to the animators because the work was covered under the “high technology professional” exemption from hours of work and overtime requirements under the Employment Standards Act (the “Act”) and Regulation. 

Given the flurry of questions received from our high-tech clients, this is a good time to review the provisions of the Act with respect to how the legislation defines high-tech companies, employees and what provisions of the Act apply to those individuals employed in that sector. 

Under the Act, a “high technology company” is a company in which more than 50 percent of the employees are either “high technology professionals” or managers of those professionals, or are employed in an executive position. 

Certain provisions of the Act, including those regulating hours of work, meal breaks, split shifts, minimum daily pay and hours free from work each week, as well as the overtime and statutory holiday provisions, do not apply to “high technology professionals”. 

“High technology professionals” are only those who are primarily engaged in:

  • Analyzing, designing or developing information systems based on computer or other technologies;
  • Analyzing, designing or developing scientific or technological products, materials, devices or processes;
  • Carrying out scientific research and experimental development; or
  • Sales or marketing professional in relation to the above services, systems, products or research.

In the Nitrogen Studios decision, the Employment Standards Branch ruled that the exemption in the Act does not apply to animators because they create visual effects utilizing software that is already commercially available. In effect, the animators are end users of technological products, but are not involved in creating or developing them.

The decision is a good reminder for employers in the high-technology sector to evaluate the composition of their workforce to determine which employees are “high technology professionals” and which are not. For example, retail sales personnel who may work for such companies are not considered “high technology professionals” for the purposes of the Act. Additionally, any employees who are end users of software or other technological products but are not primarily engaged in any of the categories of work listed above are not “high technology professionals”.

The line drawn between an employee who is and an employee who is not a “high technology professional” may not always be clear. The lawyers in Lawson Lundell’s Labour, Employment, and Human Rights Group would be pleased to assist you in determining what exemptions from employment standards requirements may apply to your employees.

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Lawson Lundell's Labour and Employment Law Blog provides updates on the most recent legal developments impacting the Canadian workplace and offers practical tips for employers. We cover a range of topics, including labour relations, employment law, collective bargaining, human rights, employment standards, employment equity, workers' compensation, business immigration, privacy, occupational health and safety and pensions and employee benefits. 

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