When Must Employers Pay For On-Call or Standby Time?

The DLSE takes the view that, on-call or standby time at the work site is considered hours worked for which the employee must be compensated even if the employee does nothing but wait for something to happen. “[A]n employer, if he chooses, may hire a man to do nothing or to do nothing but wait for something to happen. Refraining from other activities often is a factor of instant readiness to serve, and idleness plays a part in all employment in a stand-by capacity”. (Armour & Co. v. Wantock (1944) 323 U.S. 126) Examples of compensable work time include, but are not limited to, meal periods and sleep periods during which times the employees are subject to the employer’s control. (See Bono Enterprises v. Labor Commissioner (1995) 32 Cal.App.4th 968 and Aguilar v. Association For Retarded Citizens (1991) 234 Cal.App.3d 21)

Whether on-call or standby time off the work site is considered compensable must be determined by looking at the restrictions placed on the employee. A variety of factors are considered in determining whether the employer-imposed restrictions turn the on-call time into compensable “hours worked.” These factors, set out in a federal case, Berry v. County of Sonoma (1994) 30 F.3d 1174, include whether there are excessive geographic restrictions on the employee’s movements; whether the frequency of calls is unduly restrictive; whether a fixed time limit for response is unduly restrictive; whether the on-call employee can easily trade his or her on-call responsibilities with another employee; and whether and to what extent the employee engages in personal activities during on-call periods.
 

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When Do Employers Have To Pay For On-call Time?

The line between when employees are on or off the clock have become more and more grey with the advent of Blackberries, iPhones, and providing employees with remote login access from their homes. On-call time is considered compensable work time if it is spent primarily for the benefit of the employer and its business. In making this determination, the on call waiting time is spent predominantly for the employer’s benefit depends on two considerations: (1) the parties’ agreement, and (2) the degree to which the employee is free to engage in personal activities.

The Ninth Circuit Court of Appeals in Owens v. Local No. 169, Association of Western Pulp and Paper Workers (9th Cir. 1992) 971 F.2d 347, 350-355, provided a nonexclusive list of factors courts would examining in determining whether the employee was free to engage in personal activities (note that none of the factors is determinative by itself):

  1. whether there was an on premises living requirement;
  2. whether there were excessive geographical restrictions on employee’s movements;
  3. whether the frequency of calls was unduly restrictive;
  4. whether a fixed time limit for response was unduly restrictive;
  5. whether the on-call employee could easily trade on-call responsibilities;
  6. whether use of a pager could ease restrictions; and
  7. whether the employee had actually engaged in personal activities during call-in time.

In addition, the California Division of Labor Standards Enforcement published this guideline on call back time and stand by time. Employers need to conduct a review of each case when on-call time may be an issue in order to determine whether pay is owed.
 

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On-Call Time - When Do Employers Have To Pay?

The question whether an employer is obligated to pay an employee for time on-call depends on interpretation of the term “hours worked.”

In a recent opinion regarding class action issues (Ghazaryan v. Diva Limousine, LTD), an appellate court offered an analysis of what would be considered “hours worked” and, therefore, entitling the employee to pay. The court examined this definition by turning to the IWC’s Wage Order No. 9. This provision defines “hours worked” as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

The court also looked to California’s Division of Labor Standards Enforcement (DLSE). The DLSE offers opinions on California employment issues, and while the DLSE’s opinions are not binding on the courts, they are given some weight by the courts. The court in Diva explained the DLSE opinion letter on the issue of what constitutes hours worked by an employee:

One such advisory letter, issued on March 31, 1993,  acknowledges the inquiry is “highly fact-driven,” but “[t]he bottom line consideration is the amount of ‘control’ exercised by the employer over the activities of the worker. . . . [I]mmediate control by the employer which is for the benefit of the employer must be compensated.”

The court continued to explain that in another opinion letter dated December 28, 1998, the DLSE summarized the factors relevant to this inquiry:

  1. Whether there are excessive geographic restrictions on the employee’s movements;
  2. Whether the frequency of calls is unduly restrictive;
  3. Whether a fixed time limit for response is unduly restrictive;
  4. Whether the on-call employee can easily trade his or her on-call responsibilities with another employee; and
  5. Whether and to what extent the employee engages in personal activities during on-call periods.

While the court's decision is primarly dealing with class action issues, this analysis of what constitutes compensatable time is a good overview.

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