Do you have nonexempt employees that are on-call? Are you paying them for their on-call time? Should you be paying them for their on-call time? This is a complex and confusing area of wage and hour law.

The basic standard for determining compensability for on-call time has to do with the control the employer exerts over the employee’s time while on-call. Therefore, not all time spent on-call by employees is compensable. Rather, employees must be compensated only when they are deemed to be “working” while on-call. That, in turn, depends on how much control the employer exercises while the employee is on-call and whether employees can effectively use the time for their own purposes.

For example, if employees’ activities are so restricted that they cannot use the time to run errands, go to a restaurant, do chores, or attend a child’s event, they will be considered to be “working” or “engaged to wait” and must be paid. On the other hand, if employees are free to use their time to engage in their ordinary, daily activities, subject to reasonable restrictions, the law does not require that they be compensated.

Reasonable restrictions on the employee (for example, a no-drinking-alcohol rule) will not convert on-call time into compensable hours worked. But problems arise over the question of when on-call requirements and restrictions become so onerous as to prevent employees from using their time effectively for personal purposes.

Some Factors to Consider

• the frequency of calls during the on-call period;
• the time limit provided to respond;
• the geographic restrictions placed on the employee;
• the ability to trade or swap on-call responsibilities, and the amount of advance notice of assigned on-call time periods;
• the use of a pager or cell phone to contact on-call employee; and
• the employees’ ability to engage in personal activities during on-call time periods

These factors are a ‘moveable target’ and no one factor is determinative.

Best Practices
To minimize the risk of liability, you should

• provide employees as much advance notice of on-call schedules as possible and, if possible,
• provide an opportunity for employees to trade or swap assignments so that on-call schedules impede on personal activities as little as possible,
• on-call employees should be issued a pager, cell phone, or personal digital assistant (e.g. Blackberry) during on-call periods to allow them to travel freely in the local area to run errands, eat meals, and attend child/family events.

The response time should be reasonable and take into consideration the average commute time and other unique factors. While it is permissible to prohibit employees from drinking during on-call time, restrictions on other activities during on-call time should be minimal.

Also, controlled standby time may be compensated at a different rate than is paid for other work by the same employee, so long as the employee is paid at least minimum wage. Therefore you can have an on-call pay rate that is less than the employee’s normal base rate of pay.