Can an Ontario employer average an employee's hours over multiple weeks to avoid paying overtime?

Yes, but only within the specific framework the Employment Standards Act, 2000 sets out for averaging agreements, not informally. An averaging agreement lets an employer and employee agree, in writing, to average the employee's hours of work over a defined number of weeks for the purpose of calculating overtime, rather than looking at each week in isolation. This can genuinely change when overtime pay is triggered, but it has to follow the Act's requirements to be valid — including being in writing, being properly agreed to rather than simply imposed, and complying with limits the Act places on how long an averaging period can run before it needs to be renewed.

A common mistake is an employer assuming a verbal understanding, or a clause buried in an employment contract without the employee's genuine agreement, is enough to establish a valid averaging arrangement. If the agreement doesn't meet the ESA's specific requirements, the employer can end up owing overtime calculated week by week as if no averaging agreement existed at all, along with exposure for the shortfall.

Given how easy it is to get the technical requirements wrong, employers wanting to use hours averaging should have the agreement reviewed before relying on it to reduce overtime costs.