On-Call Time, Uncontrolled Standby, Controlled Standby, Response and Reporting Time Pay On-Call Rules

This article summarizes the rules related to on-call time. On-call in this context is meant to mean requiring the employee to be prepared to handle a work situation even when the employee is not at work. For example, if an employee is required to answer his or her phone after his or her shift ends (like in the evenings or on the weekends) and deal with work related situations, then the employee is on-call. Sometimes an employer may operate on a 24/7/365 basis and may require employees to be on-call any time the employee is not at the employer’s facility, essentially making the employee a 24/7/365 employee. In such circumstances, the employee is usually required to respond to a call with a certain time period. The time period to respond to calls may be as short as ten to fifteen minutes. There is no law that requires that an employee be given any certain amount of time to respond in an on-call situation. It is conceivable that the employee may be required to handle a work situation at home or may be required to report to the work facility immediately after receiving a call.

Often employees want to know if they should be getting paid for being on-call. Employees also want to know if there is a minimum amount of time that they must be paid for when they get called into work.

In California, an employer must only pay an employee for the time the employee is subject to the “control of the employer” or for “all the time the employee is suffered or permitted to work.” (IWC Wage Orders, Section 2(K); Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 584 [citing to DLSE Opinion Letter (“O.L.”) 1993.03.31].) There are different rules that apply to employees in the health care industry and or employees who are required to reside on the employer’s premises (like a nanny or other domestic employee). But for all others, the employer is required to pay the employee for all of the time that the employee is subject to the employer’s control. This means that if an employee is called into work, then the employee must be paid for the time that the employee is at work. If the employee is working from home, the employee must be paid for the time that he or she actually worked for the employer at home.

Standby Or Waiting Time.

An employee who is required to remain on the employer’s place of business and respond to emergency calls is working and must be paid for all hours–even if the employee is only waiting around for something to happen. (Armour & Co. v. Wantock (1944) 323 U.S. 126.) However, keep in mind that an employer can pay the employee a different rate of pay for stand-by time, provided that the standby rate is set before the work is performed and the standby rate is at least minimum wage. This type of arrangement makes calculating overtime difficult. For purposes of overtime computation, where an employee is paid two or more different rates of pay, the employer is supposed to use a “weighted average” of the rates of pay for method for overtime calculation be utilized to determine the regular rate of pay. Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates. That is, the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs.

Uncontrolled Standby

An employee who must be available to respond to a request by the employer to return to work for an emergency may be on uncontrolled standby if the employee is completely unrestricted to use his or her time for their own purposes. Such “free” standby time is not under the control of the employer and, thus, need not be paid.

Controlled Standby

If the employee’s time is so restricted that the employee cannot practically pursue personal activities and come and go whenever the employee wants, then the employer is considered to have direction and control of the employee. The California Supreme Court adopted a test to determine when an employee is on controlled standby as opposed to uncontrolled standby in a case called Madera Police Officers Assn. v. City of Madera (1984) 36 Cal.3d 403. This is the test that courts will use to evaluate how on-call time should be classified and ultimately, whether an employee should be paid.

The Madera court applied a two-part preliminary analysis to determine whether the time was compensable. The first part of the test measures whether the restrictions placed on the employee are primarily directed toward the fulfillment of the employer’s requirements and policies. Second, is the employee substantially restricted so as to be unable to attend to private pursuits? Regarding the second prong of the test, the Madera court also indicated that the trier of fact must examine the restrictions cumulatively to assess their overall effect on the worker’s uncompensated time. In other words, the net impact of the restrictions must be considered. The Madera court did not hold that an employer must pay if any restriction is placed on an on-call employee. In other words, an employer can place some level of restrictions on an employee and still not have to pay the employee for his or her time so long as the level of restrictions are not substantial enough to prevent the employee from pursuing private pursuits.

The Madera court held that the following factors should be considered in determining whether an employee is on controlled standby: 1) whether there are excessive geographical restrictions on employees’ movements; 2) whether the frequency of calls is unduly restrictive; 3) whether a required response time is unduly restrictive; 4) whether the on-call employee can easily trade his on-call responsibilities with another employee, and 5) the extent of personal activities engaged in during on-call time.

The simple requirement that the employee wear a cell phone or pager, standing alone, does not require that the employee be paid for all the hours the device is on. Additionally, an employee is not entitled to pay simply because the employee is required to respond to calls unless the call backs are so inherently intrusive as to require a finding that the employee is under the control of the employer.

At the end of the analysis, the rule seems to be that the rule is a kind of balancing test. Courts will consider the amount of “control” exercised by an employer over the employee. If it appears that the employee was mostly able to conduct his or her life without a glaring intrusion by the employer, then pay is most likely not going to be found to be required. Alternatively, if the employer’s rules and requirements substantially inhibit the employee from engage in personal activities, then pay is mostly likely going to be required. The inquiry is into the level of control by the employer and the level of impairment in the employee’s life.

If an employee is on-call, then it can be argued that the employer is always exercising some control over the employee during the entirety of the on-call time. However, this minor level of control alone will not give rise to the a requirement that the employer compensate the employee. But once the employee is activated and called in from the on-call status to perform duties for the employer, then the employer is exercising immediate control over the employee’s activities and the employee must be compensated.

Response and Reporting Time Pay.

If the employee is required to respond to a call or page, all time spent by the employee answering questions or otherwise responding via phone and/or computer is compensable time and must be paid. Employees must keep accurate records of these hours worked. Under California law, only de minimus work (defined as a “minute or two” during the entire workday-not per response) does not have to be paid. If the employee is required to report to the employer’s facility, the provisions of California’s “reporting time” rules may apply.

Section 5 of each IWC Wage Order provides: (A) Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage. . . . [¶] . . . (B) If an employee is required to report for work a second time on any one workday and is furnished less than two (2) hours of work on the second reporting, said employee shall be paid for two (2) hours at the employee’s regular rate of pay, which shall not be less than the minimum wage.”

However, if the employee is on a paid standby and is called to work, the reporting time pay provisions do not apply. In order to qualify as paid standby, the hourly wage for the standby time which has been agreed to or, absent a specific agreement, at the employee’s regular rate of pay must be paid. If the employee is on unpaid standby and is called to work, the reporting time requirements kick in and a minimum of 2 hours of pay is required.

By Janeen Carlberg