The best questions always come from our CEA subscribers—the ones toiling away in the HR trenches. During each month we’ll reprint some of the questions they’ve put to our editors, and the answers we’ve provided. Here’s one that many employers have wondered about:
What are the pay requirements when a non-exempt employee is on-call by cell phone 24 hours a day?
There are two basic types of on-call time: controlled and uncontrolled.
Employees are on uncontrolled on-call time if they are completely free to use the time for their own purposes. Such “free” on-call time is not under the control of the employer and, thus, need not be paid.
Employees are on controlled on-call time if they are restricted in a way that means they cannot reasonably pursue personal activities and come and go as they please. Employees on controlled on-call time must be paid for all on-call hours, but they can be paid at a different hourly rate than the employee’s usual rate—provided that this rate is not less than the applicable minimum wage.
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The California Division of Labor Standards Enforcement (DLSE) and California courts apply what’s called the “Madera Test” to assess the extent of an employer’s control over an on-call employee. The test measures whether any restrictions placed on the employee during the standby time are primarily intended to benefit the employer, and if the employee is so restricted that he or she can’t attend to personal activities.
While this test is applied on a case-by-case basis, the DLSE and the courts consider the following five factors in each case: (1) geographic restrictions on the employee’s movements; (2) required response time; (3) the nature of the employment (e.g., emergency or health care services); (4) whether the on-call employee can easily trade his or her on-call responsibilities with another employee; and (5) the extent the employer’s policy would affect personal activities during on-call time, depending on the personal activities that the employee engages in.
The bottom line is the amount of “control” exercised by the employer over the activities of the employee. The greater the control, the greater the likelihood a court or the DLSE would rule that you should be paying for that time.
To avoid having to pay for on-call time, make sure you’re adequately staffed to call on more than one employee if needed. Also, if applicable, your on-call policy should inform employees that they are not restricted in their movements or the kinds of activities they can pursue.
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