COMPLIANCE
The compensability of on-call pay
AndrewGarboden, education, training and enablement manager at Check Technologies, Inc. discusses rules on payment of on-call pay in the United States
O n-call pay can often be confusing when it comes to compensability. Does on-call time qualify as hours worked? Are on-call payments used to determine the employee’s regular rate of pay? The answer is: it depends. On-call pay is time spent calling into work to handle customer emergencies or other responsibilities during a period when the employee isn’t regularly scheduled to work. Complexities of payment for time spent on-call The definition alone can drive payroll professionals nuts, and trying to determine if that time is compensable can be complex and may come down to several factors. For instance, it may depend on how restrictive the company is and how frequently the calls happen. If an on-call employee is merely required to carry a cell phone, respond within an hour, and avoid consuming alcohol or recreational drugs, the time is probably not compensable. Therefore, it wouldn’t be included in either hours worked or the regular rate of pay for overtime purposes. Of course, any time spent working after responding to a call would be compensable and included in both (hours worked and regular rate of pay). Check the laws and regulations of the U.S. states your employees work in and your company policies for determining inclusion as well. If, on the other hand, the employee had to stay on the employer’s premises or respond within a short period of time, was very restricted on extracurricular activities, and the calls were more frequent, then the on- call time is likely going to be compensable. On-call payments guidance In 2009, the U.S. Department of Labor’s Wage and Hour Division (WHD) offered some guidance about the compensability
of on-call time in an opinion letter: http:// ow.ly/Jof030sa1SY/. Two employees of an ambulance rescue service were required to be on-call for two hours before and after their regular shift. While on call, they had to respond to emergency calls within eight minutes by driving to the squad house and picking up the ambulance. During the winter, they often had emergency calls every day — an average of one every four hours — while they had a maximum of two calls per week during other time periods. The WHD said the employees’ on-call time during the winter was compensable due to: ● the short in-person response time ● the high number of calls ● the inability to trade on-call time ● the requirement to respond to every call. The greater the restrictions are on employees in terms of response time, geography, frequency of calls, and personal activities, the more likely the on-call time is compensable worktime The WHD also said their on-call time during other parts of the year wasn’t compensable, however, due to the low frequency of calls, which gave more time for personal activities. In a second opinion letter: http://ow.ly/
qnts30sa1Tz, an employer required its on-call employees to always be contactable, abstain from alcohol or other substances, and report to work within one hour of being called. In this case, the WHD said the on-call time was not compensable because the employer’s requirements weren’t overly restrictive, and the call-backs were rare. So, is your on-call time compensable? Perhaps. Remember, the greater the restrictions are on employees in terms of response time, geography, frequency of calls, and personal activities, the more likely the on-call time is compensable worktime. n The American Payroll Association (APA)is the nation’s leader in payroll education, publications, and training. This nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 19,000 members, the APA is the industry’s highly respected and collective voice in Washington, D.C. Get more information at: http://ow.ly/TQf730sa1VR. The Global Payroll Management Institute (GPMI) spearheads the APA’s global initiatives to provide the world with a leading community of payroll leaders, managers, practitioners, researchers, and technology experts. Subscribers connect with each other through networking discussions, collaborative opportunities, and access to education and publications dedicated to global payroll strategies, knowledge, research, employment and training. GPMI also publishes several global payroll texts and white papers as a benefit to subscribers. Get more information at: http://ow.ly/ qERI30sa1Xh.
| Professional in Payroll, Pensions and Reward | March 2022 | Issue 78 14
Made with FlippingBook - Online magazine maker