CEDR Two Minute Trainer: On-Call Pay

It’s the weekend!  You send your company cell phone or pager home with your employee so that they can handle emergencies and urgent calls.  Your employee takes one or two work calls, and spends the rest of their weekend doing leisure activities.  You might be thinking, “Do I have to pay my employee for time spent on the couch watching reruns of Seinfeld?”  You might also wonder, “Can I pay my employee at a different rate over the weekend?”

On-call compensation is a common topic of confusion.  But getting on-call compensation right is important in order to help you avoid owing back pay if you are audited by the Wage and Hour Division of the U.S. Department of Labor.

What Is On-Call Time?

On-call time is time a non-exempt employee spends away from the employer’s premises, usually carrying a pager or cell phone, so that they can take calls and handle the employer’s unforeseen business.  This is referred to by the Wage & Hour Division as being “engaged to wait.”

On-call time should not be confused with waiting time.  Waiting time is time spent at the employer’s premises, waiting for a meeting to begin or waiting to be assigned a task.  This is referred to by the Wage & Hour Division as “waiting to be engaged.”

Why do we care about the difference between on-call time (being engaged to wait) and waiting time (waiting to be engaged)?  Generally, you must compensate your employees for on-call time, while you normally do not have to compensate your employees for waiting time.

How do we decide which portion of the employee’s weekend is compensable on-call time?  There are two basic categories of time to consider:

1. Time spent taking calls and managing employer business.  Once an employee answers that phone or engages in the employer’s business, all of their time spent working is paid.  The employee should track that time and add it to their hours worked that week.  This rule applies even if the employee is going into overtime pay!
2. Time where the employee is not actively working.  When an employee is not actively taking calls, the distinction between on-call time and waiting time comes into play.  You should ask yourself several questions when deciding how to categorize your employee’s time:
   1. How restricted is the employee during their on-call hours?  The more restricted, the more likely it is that the time is compensable.
   2. Can the employee engage in personal activities just as they would during normal time off?  The more freedom an employee has, the less likely it is that the time is compensable.
   3. Is the employee restricted by the employer in what they can do, such as travel outside of a geographical area, consume alcohol, or sleep during certain hours? All of these restrictions point to the time being compensable.
   4. How many calls is the employee likely to receive?  If the phone is ringing every 15 minutes, the time is likely compensable.  If they are unlikely to receive more than one or two phone calls, the time may be non-compensable.
   5. What is the time frame in which an employee must respond to a call?  A short response time makes it more likely that the time is compensable.

Let’s consider a real-life example.  In 2011, the Wage & Hour Division ordered a public health care facility to pay more than $77,000 in back wages to its emergency medical technicians (EMTs) for back wages earned during on-call time.  The facility required the EMTs to remain close by and respond to their ambulances within six minutes of being called.  The limitations placed on the employees made it impossible for them to use their on-call time for their own leisure pursuits, thus it was compensable.

How Much Should I Pay?

You are permitted to pay your employees a different rate of pay for on-call time, but only if they are performing duties that are different from their normal job duties.  For example, if a dental hygienist who does not normally answer the phone at work takes a cell phone home over the weekend to answer patient post-op questions, that hygienist is performing on-call duties that are different from her normal job duties.  Therefore, you could pay her a different rate of pay than her normal hourly rate.

In cases where an employee carries a cell phone or pager in order to be available to respond to emergencies in person, or in cases where an emergency requires the doctor to meet a patient at the office after hours and the doctor calls a medical or dental assistant to come in to work to assist, the hours worked by the assistant are paid at his or her regular rate of pay (or overtime rate, if the employee works over 40 hours in that pay week).

Remember, any different rate of pay must be at least minimum wage!  You should also give advance written notification to your employees of any different on-call rate.

Need help?

If you have any questions about on-call pay and whether it is compensable or not, please do not hesitate to contact us. CEDR’s Solution Center advisors are always available to help you work through any situation you encounter. You can call us toll free anytime at (866) 414-6056, or email us at solutioncenter@cedrsolutions.com.

And that’s your Two-Minute Trainer for today. Now, go have a productive, harmonious, and lawsuit-free day!