It is sometimes necessary to have employees available on stand-by, ready to respond to emergencies or customers on an as-needed basis. “On-call” time, or “standby,” can constitute hours worked which must be compensated if the employer places too many restrictions on the employees’ ability to engage in non-work activities. Of course, employers must pay wages for the time spent by an employee actually responding to calls. Employers must also be careful that their on-call policies are not so restrictive that employees will be entitled to compensation for time spent on-call as well.
The determination of whether on-call time is compensable is highly fact-driven. California’s Division of Labor Standards Enforcement (“DLSE”) does not take the position that simply requiring a worker to respond to calls is so inherently intrusive as to require compensation. The DLSE considers the following factors in determining whether on call time is compensable:
(1) geographical restrictions on the employees’ movements; (2) required response time; (3) the nature of the employment; and (4) the extent the employer’s policy would impact on personal activities during the on-call time.
These factors are considered in the context of the specific policy. Geographical restrictions may be more reasonable depending upon the length of time involved. For example, a fifty mile limit for an “overnight” on-call period is more reasonable than a fifty mile limit over a weekend period. Similarly, a short required response time acts as a geographic limitation, and the employee may be entitled to compensation if it is “unreasonable.” The DLSE will consider the standards of the industry, for example, whether there is a reasonable and longstanding practice in the particular industry that indicates that uncompensated on-call time is expected and whether depriving employers of uncompensated on-call time will have a serious negative impact on the employer’s business. Any limitations on the personal activities of the employee while on-call (e.g. prohibitions on alcohol consumption) will, along with temporal and geographic limitations, be considered in determining the extent of control. Further, the ability of employees to trade on-call shifts with other employees can be a factor weighing against compensation.
Therefore, when drafting an on-call policy, an employer should place as few restrictions on the employees’ use of time as possible while still being able to achieve its goal of having employees available to respond to calls or emergencies.