In today's flexible workplace, traditional 9-to-5 schedules don’t work for every business—or every employee. Whether you're managing field crews, hospitality staff, or professional service teams, you may have employees asking to work longer days and enjoy more time off in return.
Enter the averaging agreement, also known as overtime averaging. Averaging agreements are a powerful scheduling tool—especially in British Columbia—that can help employers and employees strike the right balance between productivity and flexibility. But tread carefully: these agreements come with legal obligations, and rules vary province-to-province.
What is an averaging agreement?
In British Columbia, an averaging agreement is a written agreement between an employer and employee that allows work hours to be averaged over a 1- to 4-week period. This means employees can work more than 8 hours on some days without triggering daily overtime, as long as their total hours stay within the averaged weekly limits.
This can be a game changer for industries with seasonal or project-based work, and a win for employees who prefer compressed workweeks—say, four 10-hour days instead of five 8-hour ones.
Employer perspective: why consider an averaging agreement?
From an employer's standpoint, averaging agreements can:- Reduce overtime costs while staying compliant with the law.
- Offer flexible scheduling that supports project or operational demands.
- Increase employee satisfaction by supporting alternative work patterns.
- Improve recruitment and retention—especially with younger workers valuing flexibility.
But be warned: to stay compliant in BC, you must follow the Employment Standards Act to the letter. That includes:
- Putting the agreement in writing, clearly stating the work schedule.
- Giving employees at least 48 hours notice before any schedule changes.
- Keeping the agreement on file for 4 years.
- Still paying overtime if the average weekly hours go beyond 40, or if daily/weekly maximums are exceeded.
Quick example: If an employee works four 10-hour days per week over a 2-week period (80 hours total), no daily overtime is required. But if they work more than the agreed 10 hours on any day or more than 40 hours in a week, overtime kicks in at time-and-a-half 1.5 x for up to 12 hours and double time after 12 hours of continuous work.
Employee perspective: what’s in it for me?
For employees, averaging agreements offer a legally protected way to enjoy more flexible work patterns—especially:
- Longer days, more days off (e.g., 4-day workweeks)
- Better work-life balance for family, school, or personal time
- Less commuting time and costs in compressed schedules
However, employees should:
- Read the agreement carefully and understand the impact on overtime eligibility.
- Know they are not obligated to agree to an averaging agreement.
- Ask questions about schedule changes and how overtime is tracked.
Averaging agreements are a great option for industries with seasonal or project-based work.
What about other provinces?
While BC leads the pack with a clearly defined “averaging agreement” structure, other provinces have their own variations:
| Province | Similar Framework | Key Points |
| British Columbia | ✔ Averaging Agreement | 1–4 weeks, strict compliance required |
| Alberta | ✔ Averaging Arrangement | Up to 52 weeks, written schedule required |
| Ontario | ✔ Averaging of Hours Agreement | Up to 4 weeks; may need government approval |
| Manitoba | ✔ Averaging via permit | Permit required from Employment Standards |
| Other provinces | ❌ No formal framework | Standard overtime rules apply |
Important: Just because a province allows “averaging” doesn’t mean the rules are the same. Each province has unique requirements, including documentation, overtime thresholds, and duration limits. BC-based employers expanding across Canada should review local employment standards or consult an HR advisor before applying a similar approach elsewhere.
Final thoughts on averaging agreements
Averaging agreements, when implemented correctly, can be a strategic advantage —offering employers operational flexibility and giving employees the gift of more time. But legal compliance is non-negotiable.
If you're considering using averaging agreements in your business:
- Document everything properly
- Communicate clearly with your team
- Understand province-specific rules if operating outside BC
- Review agreements regularly to ensure they still meet operational and legal requirements
Need help drafting compliant averaging agreements or implementing them across your team? MyHR can help you build flexibility without risk. Get started today at myhr.works/ca/book-a-demo.
