Your on-call pay policies should be in line with industry standards. Researching what other professionals in your field are being paid for on-call work can help you negotiate a fair compensation package and ensure you comply with the law.
On-call hours are considered part of regular hourly work, so if you restrict your employee’s free time while on call, it must be compensated. The details of your on-call pay model will depend on your business and the frequency of incidents.
Time and Attendance
In some industries, like IT and repair services, it’s common for hourly employees to be on call, meaning they are expected to drop whatever they are doing to answer a work phone call or text. This can be a major disruption to their personal lives, forcing them to rearrange schedules or find child care, and often results in extra work hours without overtime pay. When this happens, it can be a real morale killer for staff members, especially if the frequency of on-call shifts is high.
When deciding whether on-call pay is necessary, it’s important to consider the number of on-call shifts per week and their duration. Websites of companies like ADP have ample information about payroll, and the industry standards and minimum wage laws in your area also play a role in determining whether this compensation is required.
You should consult with a lawyer or your state’s employment laws before formulating on-call policies for your business. This ensures you are following local and federal regulations and providing the best possible compensation for your employees.
Employees should also be paid for any time they spend traveling while on-call, whether going to or from home to the workplace. This is a crucial consideration because it can add up quickly and lead to burnout if employees feel they are being made to work for free.
Overtime
Sometimes, an employee’s on-call time may be compensable for overtime. For example, if an employee is at home and receives a call that requires them to come into the office, their compensable work hours should include the phone call and travel time, according to federal labor laws. For hourly employees, this is considered overtime and should be calculated accordingly.
The old adage that “time is money” hits especially hard for paid on-call workers. Nurses, firefighters, police officers, and other public safety personnel, for instance, are often required to be on-call at work. They are often on-call for shifts that last 12 or even 24 hours and must be prepared to respond to emergency calls during these periods.
Depending on your state’s law and your policies, being on-call may or may not be considered as hours worked. If your on-call hours count toward an employee’s regular work week, the federal Fair Labor Standards Act requires that you pay them for all on-call time they perform.
If you are still determining whether your on-call policy complies with the FLSA, consult your legal counsel. If you decide your on-call pay qualifies as overtime, use an on-call payroll calculator to determine how much each hour of on-call work should cost. You can also encourage your team to reduce overtime costs by establishing and enforcing clock-in/clock-out regulations to ensure that your team members don’t unnecessarily accumulate extra hours.
Expenses
Many workers in the public sector work tethered to contingencies: healthcare staff, emergency utility technicians, and relief agency employees are just some of the professions that frequently serve when businesses and families need them. The adage that time is money holds for these employees, who deserve to be compensated fairly. Suppose their on-call compensation plan isn’t considered, formalized, and communicated. In that case, they may feel uncompensated when they must be available to the company outside regular working hours.
Whether hourly employees are exempt or non-exempt from FLSA, an important consideration is whether their on-call time is restricted. Suppose they must remain near the business, expected to drop whatever they’re doing to answer a call, or be contacted frequently enough to disrupt their personal activities. In that case, the law considers on-call time compensable under FLSA.
For salaried professionals, such as John, a nurse, their status on call could be clearer. They probably qualify for on-call pay if they are expected to be near the hospital and have restrictions on using their time. An on-call pay calculator can help determine the additional salary that should be paid for an employee’s time spent on call. This tool allows for input of an employee’s regular hourly wage, the number of on-call shifts per month, and the expected workload during those weeks.
Insurance
If you employ employees required to be on call, your company must maintain sufficient insurance to cover the time they’re on call. This will prevent the company from being held responsible if an employee is injured or killed during an incident that occurs while they’re on call.
If your employees must stay at the workplace during on-call shifts, their time is generally considered work hours and must be reimbursed accordingly. For example, let’s say your employee John is on-call for four hours during the day, but he receives only one call requiring him to leave his home and go into the office. Therefore, only 30 minutes of his on-call time counts as actual hours worked, and he isn’t paid for the remaining three hours and thirty minutes.
In some industries, like healthcare and air control towers, employees must follow strict on-call policies to ensure safety and security for the public. In such cases, the employer must adhere to federal and state laws regarding on-call pay for their employees. In these situations, an on-call pay calculator can help determine how much your company should compensate its employees for their on-call shifts based on the frequency and restrictiveness of their policies. This will make your company’s on-call pay model fair and equitable.
