"On Call" Employees: Do I Have To Pay Them?
Employers often wonder whether they are required to compensate hourly, non-exempt employees for time outside of normal working hours that they spend “on call.” Unfortunately, as with most legal questions, the answer is: it depends. This article will provide guidance on this topic as it relates to hourly employees. This guidance is also applicable to salaried, non-exempt employees for overtime purposes.
The clear answer is that, any time an hourly employee is actually performing work, he or she must be compensated for the time spent doing that work. That is, if an IT employee is “on call” at home and receives a phone call for tech assistance, the hourly employee must be compensated for the time spent resolving the issue. The trickier question comes into play when the employee is not actually working, but is technically “on call” and must be ready to report for duty.
As a general rule, an employer does not need to compensate an employee for on call time when the employee is off of the employer’s premises. If the employee is, for example, required to be on call one night per week but is allowed to be at home or somewhere other than the workplace, compensation is generally not required. However, an employer is required to compensate an employee where the conditions placed on the employee’s activities during the on call time are so restrictive such that the employee cannot use the time effectively for personal purposes. In short, the more restrictions placed on an employee during on call time, the more likely it is that the employee must be paid for that time.
Fortunately, cell phones make it fairly easy for an employee to be on call but also to have the freedom to engage in personal activities. The Department of Labor (DOL) and courts have held that, where an employee must be reachable by cell phone and must immediately respond to calls and report to the workplace within 10-20 minutes, the employee is not unduly restricted from engaging in personal activities and, accordingly, does not require compensation. In this scenario, the employee is clearly free to engage in personal activities such as running errands and going to the movies as long as he or she is reachable by cell phone and is responsive once called to duty.
When an employee is required to remain at home while on call, for example, to immediately access a desktop computer, it is a closer question of whether the employee is unduly restricted from engaging in personal activities. In this scenario, even though the employee is clearly not free to engage in activities outside of the home, some courts have held that the employee is still free to engage in personal activities within the home such as entertaining guests, reading, or watching Netflix. According to these courts, the employee is not unduly restricted from engaging in personal activities and; therefore, no compensation is required. The DOL has disagreed and has taken the position that an employee must be free to engage in activities outside of the home otherwise, compensation is required. In other words, for employers who require their on call employees to remain at home, it may be safest to compensate these employees for on call time or to do away with the “at home” restriction, if practicable.
Regardless of whether the employee is located at home or somewhere other than the workplace, the bottom line is that the employee should be able to engage in personal activities while on call. The DOL and courts agree that, where an employee receives frequent and excessive phone calls or emails such that the employee is constantly interrupted or distracted, the employee is unduly restricted from engaging in personal activities and must be compensated.
Should you have any questions about “on call” pay or any other wage and hour issues, please do not hesitate to contact us.