On-Call Pay Explained: A Simple Guide

What is on-call pay?

On-call pay is compensation given to employees for being available to work outside of their regular hours. It's not about the hours they actually work, but about the hours they spend ready to work. This pay is for their time spent waiting, which might not be active work but is crucial for the business.

On-call pay Vs. Regular wages

The main difference between on-call pay and regular wages is that regular wages are for hours worked, doing actual job duties.

On-call pay, on the other hand, compensates employees for the time they remain available to work if needed. It's a recognition of the restriction on their personal time, even if they're not at the employer's premises.

When do you need to provide on-call pay?

Federal law, especially under the Fair Labor Standards Act (FLSA), requires employers to compensate employees for on-call hours if the employee is significantly restricted from using their time for their own purposes.

This could mean being unable to leave their home, having to stay close to the workplace, or having restrictions that prevent them from enjoying their personal time.

In such cases, the on-call time is often considered hours worked, and employees might be eligible for on-call pay or even overtime pay if they exceed standard work hours.

What industries and job roles require on-call availability?

Many industries rely on on-call employees to manage unexpected demands or urgent situations. Here are examples of professions with on-call duties:

• Healthcare professionals: Doctors, nurses, and emergency medical technicians often have on-call shifts to respond to patient needs.
• IT specialists: To keep networks and systems running, IT staff may need to be on call for technical issues.
• Utility workers: Those in electric, water, and gas services remain on call for emergencies, like outages or leaks.
• Maintenance and repair technicians: Ready to fix urgent problems in buildings, machinery, or equipment.
• Security personnel: On-call to respond to alarms or security breaches.
• Customer service representatives: In some businesses, they provide after-hours support for customer inquiries.

What are the federal rules for on-call pay?

The federal rules for on-call pay are primarily governed by the Fair Labor Standards Act (FLSA), which provides the framework for when on-call hours are considered compensable work time. Understanding whether on-call time is paid depends on several factors, including the degree of freedom an employee has during their on-call periods.

Federal and state laws governing on-call pay

The FLSA establishes that on-call time is compensable when the employee is significantly restricted from using their time for personal activities. This determination is made on a case-by-case basis, considering factors such as:

• The frequency of calls the employee must respond to.
• Whether the employee can trade on-call responsibilities with others.
• The degree of personal activities the employee can engage in while on-call.

For example, if an employee must remain on the employer's premises or nearby, making it impossible to use the time effectively for personal purposes, this time is likely considered hours worked and should be compensated​​.

What is the on-call policy?

An on-call policy outlines the expectations and compensations for employees who are required to be available to work outside of their regular working hours.

This policy ensures that both employers and employees understand the conditions under which on-call workers will be called to work, how they will be compensated for their time, and what is expected of them while they are on call.

Useful Read: Navigating Compensatory Time: What Employers Need to Know

It's a crucial part of managing on-call workers, ensuring compliance with Fair Labor Standards Act (FLSA) regulations, and maintaining clear communication between employers and their on-call employees.

What should be included in an on-call policy?

• Definition of on-call time: Clearly state what qualifies as on-call time for your organization, including the expectations for on-call employees to remain available and how they should respond to calls.

• Compensation: Detail how pay employees for their on-call time. This should cover whether on-call workers will receive their regular rate of pay, if there will be a different rate for time spent on call versus time spent actively working, and how non-exempt employees will be compensated in accordance with the minimum wage and overtime requirements under FLSA regulations.

• Eligibility: Identify which employees are required to participate in on-call shifts. This includes distinguishing between exempt employees (who may not be eligible for additional on-call pay under certain conditions) and non-exempt employees (who are entitled to minimum wage and overtime pay).

• Scheduling: Outline how on-call schedules will be determined, how much notice on-call workers will receive before being required to work, and any shift rotation or fairness principles that will be applied to the scheduling process.

• Response time expectations: Specify the expected response times for on-call employees when they are called to work, including how quickly they must answer calls or report to work if needed.

• Restrictions on on-call time: Explain any restrictions on what on-call employees can do during their on-call hours, such as geographic limitations or prohibitions on consuming alcohol.

• Travel time: Include policies regarding travel time for on-call employees who need to commute to the workplace from their location when called to work, and how this time will be compensated.

• FLSA regulations compliance: Ensure that the policy is in compliance with FLSA regulations, particularly regarding the payment of overtime and the treatment of hours worked.

• Communication procedures: Detail how and when on-call employees will be contacted, including the methods of communication (e.g., phone call, text message, email) and any requirements for employees to confirm receipt of a call to work.

• Exceptions and special circumstances: Address any potential exceptions or special circumstances that may alter the standard on-call policy, such as emergency situations or unexpected increases in workload.

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Conclusion

On-call pay is a crucial aspect of employment that compensates individuals for being ready to work outside regular hours. This recognition of their availability helps ensure businesses continue to operate smoothly, addressing unexpected demands.

Understanding and implementing fair on-call pay policies not only align with legal requirements but also respect and value the time and dedication of employees.

It's essential for industries reliant on on-call workers, like healthcare and IT, to establish clear on-call policies, detailing compensation, eligibility, and scheduling, to maintain compliance and support their workforce effectively.