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Understanding On-Call Pay – What You Need to Know

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On-call time often presents wage and hour issues. If an employee’s freedom of movement while on call is restricted, compensation may be required under specific state and federal laws.

If the on-call duties do not interfere with an employee’s ability to conduct personal activities effectively, they might not need to be paid for this time. Read on to learn more.

What is On Call?

If your business requires employees to be available for work at any time of the day, you may need to pay them for on-call hours. It’s common for IT and repair services to have employees on call, but the practice can also be found in professions such as nurses, doctors, and firefighters.

Employers use on-call scheduling to staff for unpredictable events, such as natural disasters and unexpected illnesses. While the practice is controversial, it saves businesses money on staffing and other overhead expenses.

In many cases, requiring employees to be on-call without paying them for their time is illegal.

Understanding the laws regarding on-call pay before implementing a company plan is essential. Federal law says that if an employee’s on-call time is restricted, it’s generally considered hours worked, and employers must compensate them for their waiting time. However, if the on-call hours are not restrictive, you may not need to provide compensation.

To determine whether an employee’s on-call hours are restricted, you must consider where the employee is and what they can do while on call. If they must remain on or near the workplace or can only go to designated areas, this is likely considered restricted on-call time and should be paid at minimum wage.

Are You Required to Be On Call?

It’s common for employees in professions that require them to respond quickly to unforeseen circumstances, like IT workers and utility repair professionals, to be required to be on call. These workers might need to drop whatever they’re doing on short notice to help out a customer with an issue or attend to an emergency.

HR leaders must know when employees qualify for on-call pay, as these rules vary by employer and state. For example, some states have laws that say an on-call worker must be paid if required to stay at work or near the company premises and cannot effectively use their time for personal activities.

Federal regulations involving on-call pay are less clear cut and largely depend on whether the worker is restricted to where they can go and what they can do, reports Legal Information Institute. For example, nurses who must stay on their employer’s premises and cannot sleep or watch TV could qualify for on-call pay.

On-call rules also differ for exempt employees who are paid a set salary and do not have to count their hours, as these workers can be allowed to leave the company premises while on-call. However, for nonexempt workers who must count their hours, federal regulations require that they receive on-call pay if the company can control where and how much they move around.

Are You Eligible for On-Call Pay?

Whether an employee is eligible for on-call pay depends on many factors. It can be a complex issue, especially since some employers have policies that contradict federal regulations. It also depends on where the employee has to be when they are on call and how many calls they receive. For example, a trauma nurse who has to stay on call at home and return to the hospital immediately if paged is likely entitled to compensation while they wait for their employer to call.

The same goes for employees on call at their office or within a reasonable distance from the workplace.

Similarly, suppose the frequency of calls is enough to disrupt an employee’s activities and prevent them from planning or engaging in those activities during their on-call hours. In that case, the employee should qualify for on-call pay.

Employers still determining their on-call pay policies should consult an experienced employment attorney. Not only will this help ensure that the company follows federal wage and hour laws, but it can also help avoid costly lawsuits over unpaid minimum wage or overtime. It is also good to check state laws, which may be more restrictive than federal laws regarding who qualifies for on-call pay.

How Do You Calculate On Call Pay?

Whether or not an employee must be paid for on-call hours depends on whether their time on call is considered “hours worked” under federal or state law. Under the Fair Labor Standards Act, on-call hours are considered hours worked if the employer requires employees to be available for work by phone, either at home or within a reasonable distance of their workplace.

If an employee can watch television, sleep, or otherwise conduct personal activities without interruption but receives a call that requires immediate attention, on-call hours are compensable. The same is true if an employee must be at the workplace or near it for any time, even 30 minutes.

The deciding factor is how many calls an employee must respond to while on-call. The more calls, the more likely those hours will be compensable. It also matters how long an employee is on-call after receiving a call. If they must remain at the workplace or within a specified distance, the clock starts ticking when they receive the call.

For some physicians, being on-call is just part of their job and not worth additional compensation. Others may be eligible for additional on-call pay rates, especially those on staff at large hospitals or in highly specialized fields.