Call Time Compensability
The federal Fair Labor Standards Act (FLSA) and Wisconsin’s wage and hour law requires employers to compensate their non-exempt employees a rate of pay equal to or greater than the minimum wage for all hours worked. Employers who require their employees to be “on call” must answer whether employees’ on call time is hours worked that must be paid consistent with minimum wage and overtime requirements. This article provides employers with the guidelines and principles that will help answer the question of whether employees’ on call time is compensable hours worked.
Answering the question: Is on call time compensable hours worked?
The primary question to ask for purposes of determining if on call time must be paid as hours worked is whether the time predominantly benefits the employer or whether the employee can use the time effectively for personal pursuits. The FLSA and Wisconsin regulations governing on call time mirror each other and explain that employees who are required to remain on call on the employer’s premises or so close to the premises that they cannot use the time effectively for their own purposes are working while on call. On the other hand, employees who are not required to remain on the employer’s premises but are merely required to leave word at their home or with company officials where they may be reached are not working while on call.
Sounds simple, right? In reality, the question of whether on call time is compensable depends on the particular facts of each on call situation. Courts asked to decide whether on call time is compensable hours worked look at a variety of factors that are aimed at determining whether on call employees can indeed use the time effectively for their own personal pursuits. These same factors are used by the federal Wage and Hour Division, which enforces the FLSA, and the Wisconsin Labor Standards Bureau, which enforces Wisconsin’s wage and hour law. Some of the factors include:
- Whether a fixed time limit for response is unduly restrictive
- Whether a pager or cell phone is used to ease restrictions
- Whether on call employees can easily trade on call shifts or responsibilities
- Whether there are excessive geographical limitations imposed while on call
- Whether the frequency and length of calls during the on call period is unduly restrictive
- Whether the on call policy is based on an agreement between the employer and employees
No one factor decides the question of the compensability of on call time. It is a combination of the factors as applied to the specifics of each on call situation that ultimately determines whether on call time must be paid as hours worked.
The Department of Labor provides an example
This on call question came to the Department of Labor Wage and Hour Division from a non-profit ambulance rescue service serving two small communities. Emergency response employees reported to the squad house from 8 a.m. to 4 p.m. and were paid an hourly wage for this time. In addition, employees were on call from 6 a.m. to 8 a.m. and from 4 p.m. to 6 p.m., five days per week, without compensation. Employees used pagers while on call.
For emergency calls during the on call period employees were required to drive their vehicle to the squad house, pick up the ambulance, and respond to the call. Employees were required to wear identifying attire, such as a jacket, when reporting. On call employees were required to stay within the ambulance service’s coverage area and were required to respond to a call, with the ambulance, within eight minutes. It took longer than eight minutes to drive to the squad house from some of the towns within the coverage area. The number of calls requiring employees to respond varied throughout the year with calls occurring almost every day during the winter and only once or twice a week, or in some weeks, not at all, during the remainder of the year. Employees were paid one and one-half times their hourly rate for time spent on an emergency call.
Employees were unable to exchange their on call duties with any of the volunteers who also served the ambulance service. The ambulance service had in place disciplinary penalties that could result for failure to respond to a call within the eight-minute response time although there was no history of imposing discipline against employees who failed to respond.
The opinion of the Wage and Hour Division’s Office of Enforcement Policy was that on call time during the winter season, but not the remainder of the year, was sufficiently restrictive to make it compensable hours worked under the FLSA. The conclusion was based on a combination of factors. First, in the opinion of the Division, the shortness of the in-person response time requirement precluded effective use of the on call time for all but a small range of personal purposes, all of which had to take place within a restricted geographic area in order to meet the eight-minute response time. Second, the high number of call-ins (averaging one response every four hours) restricted employees’ ability to use the time for their own purposes. Third, the impossibility of trading on call responsibilities meant employees were on call five days per week, and fourth, the inability to turn down any of the call-ins was a factor in the determination. The Division viewed the use of pagers as providing only limited relief given the very short in-person response time.
The Division specifically discussed the frequency of the calls, noting that if the frequency of call-ins during the winter decreased to fewer than the average one call per four-hour shift, the conclusion that the employees were unable to use the on call time for their own purposes would need to be reevaluated. Similarly, the Division cautioned that if the frequency of the calls during non-winter months increased, the employees’ ability to use on call time effectively for their own purposes would need to be reevaluated to determine if the on call time had become compensable. Wage and Hour Opinion Letter, FLSA2008-8NA (May 23, 2008).
Often employers provide some form of payment, such as stipends or a small dollar amount for each on call hour, to compensate employees for the inconvenience of being on call. It is a mistake to believe that these types of “inconvenience payments” are all that is required to compensate on call employees in every situation. Evaluation of whether on call time is compensable time is a must to ensure compliance with minimum wage and overtime requirements applicable to non-exempt employees. Reevaluation of the compensability of on call time is prudent if circumstances change, such as increased frequency of call-ins.
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