I'm a little bit confused about how time off in lieu is calculated. I'm in Alberta where the government says:
"Sometimes, instead of paying overtime pay, an employer may give an employee time off work with pay (banked overtime) at a rate of 1.5 hours for each overtime hour worked as part of an overtime agreement between the employer and employee."
Notice it says "with pay". I realize the rules in different jurisdictions may be different, but I'm assuming the rules are typically very similar and so somebody should be able to clarify this for me.
So let's say this is a normal work day for Joe.
But yesterday he worked an extra hour.
Obviously the first 8 hours are paid. Let's say, for simplicity's sake, $10 per hour. Now if we paid the last hour as overtime, we would pay for that hour $15. So that would be a total of $95.
However, if we give this employee time off in lieu for that over time hour instead, according to the rule I posted above, then don't they also get that same $95 plus 1.5 hours off work?
That seems like a double benefit to me so why on earth would an employer give them that? Why not just pay the $15 for the overtime and let them come to work their regular shift. Yet a lot of employers do this, so this is why I feel like I'm misunderstanding this.
Can somebody explain to me how this works?