On call time/overtime

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We are located in PA and have several questions regarding ON CALL pay? Is there any problem developing on ON CALL pay program that pays $2.50/ hour while on call and then pay their hourly rate for what ever time the employee is on the phone or working to correct the problem? Does ON CALL time and time worked while on call go toward overtime? How would ON CALL time be counted for exempt employees as well?

Holly Jones

Under the FLSA, on-call time is something of an all or nothing deal. Either the on-call hours are also considered "working" hours, for which you must pay at least minimum wage, or they are not considered working hours, and are not compensable at all.

What determines whether you must pay or not is whether the employee's on-call hours primarily benefit you or the employee. In other words, is the employee "engaged to wait" (compensable) or "waiting to be engaged." (noncompensable)

There's not a hard and fast rule for what determines whether the employee is engaged to wait or waiting to be engaged; rather, it's a function of situational factors. How much freedom does the employee have to use the on-call time for personal pursuits? Is the employee required to remain on the work premises (or so close to the premises that the time is not really his/her own)? How frequently are assignments actually received while on-call? Does the employee have a particularly restrictive period of time within which he/she must respond to the call? Etc.

The more restrictive the employer policies are on the employee's time, the more likely the employee's on-call time is work time.

From this, if the on-call time is work time, then (a) it must be paid at least at the minimum wage, and (b) it would count toward overtime calculation. So you could set up a pay scheme that pays this on-call time differently, but not at $2.50 an hour.

For exempt employees, so long as the employee is correctly classified as exempt, on-call time really isn't a concern, as the primary advantages of exemption from FLSA are that you don't have to track employee hours or pay overtime. You'd just want to be very sure that your employees are properly classified, and you couldn't "dock" your employees' salary from what it typically is because they were spending time on-call during that week.