Highlights
- On-call pay is required in “engaged to wait” scenarios, where employees’ time and freedom are quite restricted.
- The Fair Labor Standards Act (FLSA) provides a baseline for on-call pay regulations, but many states have their own, often stricter, rules.
- EPAY Systems helps you track work hours (including those on-call) and manage on-call pay for your hourly workforce with simple, yet powerful, tools. Learn more about our solutions.
Need to understand on-call pay for your hourly employees? From emergency repairs to IT support, on-call needs are a reality for many businesses.
This article clarifies the rules, explaining the difference between “engaged to wait” and “waiting to engage,” outlining FLSA regulations, and providing guidance on creating a compliant on-call policy.
Let’s dive in!
What is On-Call Pay for Hourly Employees?
On-call pay compensates non-exempt employees (typically paid hourly and entitled to overtime pay) for the time they are available and responsive to work requests, even if they are not actively working or present at the workplace.
This type of payment recognizes the inconvenience and restrictions on employees’ time and freedom while waiting for work.
When Should Employers Provide On-Call Pay?
Employers must provide on-call pay at their regular hourly rate to non-exempt employees when they are considered “engaged to wait.” This means that the employee is not entirely free to pursue personal activities and must be available to work if called upon. During on-call periods, employees can be required to stay at or near the workplace, carry a pager or a company phone, and respond immediately to any calls.
A few examples of “engaged to wait” scenarios:
- An on-call maintenance technician at a manufacturing plant is required to carry a company-provided pager at all times, even outside of their regular shift. They must remain within a 15-minute radius of the plant and respond to any page immediately.
- An IT support specialist for a hospital is required to carry a company-issued cell phone and be available to provide remote support 24/7 while on call. They must answer calls within 5 minutes and resolve the issue either remotely or by coming on-site within 30 minutes.
- A registered nurse at a small clinic is required to be on-call one weekend a month. They must carry a cell phone and be able to arrive at the clinic within 20 minutes if called.
When Is On-Call Pay Not Required?
If an employee is “waiting to engage,” meaning they are free to pursue personal activities and are only required to respond if called, they may not be entitled to on-call pay. They must, however, be paid for all hours worked if called in.
Here are some examples of “waiting to engage” situations:
- An IT support technician is on a weekend on-call rotation. They are expected to monitor their email for any urgent support requests. They are not required to be online constantly, but they must check their email every few hours.
- A security guard is on-call overnight. They are provided with a company cell phone and can be reached if an alarm is triggered at the facility. However, they are not required to remain on the premises or even nearby. They can go home, visit friends, or engage in other personal activities as long as they have the phone with them and can respond within a reasonable timeframe.
As you can see, the differences between “engaged to wait” vs “waiting to engage” can be very subtle. They depend on the amount of control from the employer, such as the frequency of calls, the response time required, and the geographical limitations imposed on the employee.
Employers should evaluate on-call situations carefully to ensure compliance with labor laws.
FLSA On-Call Pay Rules
The Fair Labor Standards Act (FLSA) is the federal law governing on-call pay for non-exempt employees in the U.S. Under the FLSA, employers are required to compensate employees for all hours worked. And this includes time spent on-call, as long as certain conditions are met:
- When employees are considered “engaged to wait,” they must be paid at least the federal minimum wage (and, if applicable, overtime) for all on-call time, even if they are not actively working.
- If employees are “waiting to be engaged,” they are only entitled to compensation for the time they are actually called in to work.
State Laws on On-Call Pay
Beyond the FLSA, many state laws provide additional protections or specific requirements regarding on-call pay.
California, for example, requires employers to pay non-exempt employees for all on-call time, even if they are not actively working, regardless of whether they are engaged in work or not.
Other states, like New York, have adopted the “engaged to wait” and “waiting to engage” principles from the FLSA but have added their own nuances. For example, New York law specifies that employees who are required to remain at the employer’s premises or a prescribed work site are considered “engaged to wait” and must be paid for all on-call time.
Many states have specific regulations regarding the minimum compensation for on-call time, such as requiring employers to pay a certain percentage of the employee’s regular rate or a flat fee for each on-call shift.
Building an On-Call Policy for Your Hourly Workforce
Creating an on-call policy ensures your employees are paid fairly and in compliance with labor laws. Keep this in mind when building yours:
- Clearly outline the circumstances under which employees are considered on-call and the specific responsibilities it involves. Are employees required to carry a company-provided device, report to work within a specific timeframe, or handle work-related tasks remotely?
- Determine how on-call employees will be compensated for their availability.
- Pay a flat rate for each on-call shift
- Provide additional hourly wages for time spent actively working
- Offer a combination of both
- Develop a fair and transparent process for scheduling on-call shifts.
- Specify the expected response time for employees to respond to on-call requests and the consequences for failing to meet these expectations. Are there any additional restrictions during on-call periods, such as limitations on travel or alcohol consumption?
- Implement a reliable, easy-to-use system for tracking and recording employees’ work hours during on-call periods, including any time spent actively working.
- Review and update your on-call policy from time to time, to address any changes and keep the process fair and compliant.
Simplify On-Call Pay with EPAY Systems
Transparent on-call pay policies demonstrate that you value your employees’ time and effort. It goes far beyond legal obligations: It helps create a positive work environment and keeps employees engaged.
At EPAY Systems, we offer HR solutions to simplify on-call pay for hourly employees. Our advanced payroll and time-tracking tools ensure accurate compensation for on-call hours, keeping your business compliant with federal and state labor laws. Easily track and calculate on-call pay, even with complex schedules or compensation structures, saving you time and resources.
Request a demo today to see how EPAY Systems can streamline your on-call pay process.
