Making Sense of On-Call and Standby Pay

Employers who need to keep their employees close for emergency reasons or work fluctuations have probably heard of standby or on-call pay status. These two are almost interchangeable; it more so depends on how you define the employee’s status and how quickly you expect them to respond. Closely related to these two practices is Reporting Time Pay.

We want to simplify these confusing and trouble prone employment practices, so you don’t have to.

Many California employers require employees to be available within a specific period of time on an occasional or regular basis. They might be required to have with them at all times a cell phone or other form of communication while they go about the affairs of their personal life. Some employers require employees to be available within a very tight time or distance radius. What’s the difference and when do you to have to actually pay an employee for this time?

For non-exempt, hourly employees, whether the standby or on-call time is “controlled” or “uncontrolled” depends on the unique facts of the situation and defines whether the time would be paid or not.

Controlled Time
Controlled standby generally means that an employee is required to remain on-call or in close proximity to the employer’s premises, so close to it that the employee does not have the freedom to pursue their own purposes. For example, suppose you have a shipment of material that will show up two hours after the employee’s shift is over, and you ask them to remain close by for 2 hours. Controlled standby time would be compensable and subject to overtime wages if the time exceeds 8 in a day. Controlled standby time may be compensated at a different rate than is paid for other work by the same employee, so long as the employee is paid at least minimum wage. (Seek advice from Infinium HR before changing an employee’s payrate).

Uncontrolled Time
Uncontrolled standby generally means that an employee is not required to remain on the employer’s premises and is merely required to respond within a reasonable time (30 minutes – 1 hour). Uncontrolled standby time may be spent primarily for the employee’s own purposes. It is recommended that with uncontrolled time, you have alternate employees you can call in case your first choice is unavailable or otherwise incapacitated (yes, we’re talking about too much to drink).

What does California Say?
The California Department of Labor Standards (DLSE) considers the following standards to determine if 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 impacts personal activities during on-call time.

What if an employee refuses to work?
Employees should know, that part of their job is to be on-call occasionally or regularly. This fact should be explained in their job description and be part of a company policy that clearly details the expectations, rotation schedule, if any, and what the consequences are for failure to be available for on-call work. Employees can be disciplined for not participating in the on-call needs of the business.

Whatever your situation is, Infinium can help you develop an effective policy and guide you through the process so you don’t have any potential issues. Check in with our HR experts at info@infiniumhr.com.