Even though employers allow employees to watch TV, surf the Internet, or even sleep, depending on the circumstances such on-call time, even if the employee is not doing any work, still may be required to be paid by the employer. It has been clear since the 1940’s that employers have the obligation to pay employees when the employer requires the employee’s “readiness to serve”:
Of course an employer, if he chooses, may hire a man to do nothing, or to do nothing but to wait for something to happen. Refraining from other activity is often a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer’s property may be treated by the parties as a benefit to the employer. Whether time is spent predominantly for the employer’s benefit or for the employee’s is a question dependent upon all the circumstances of the case.
Armour & Co. v. Wantock (1944) 323 U.S. 126, 133. Most of California Wage Orders define “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.” Wage Order 9, subd. 2(H). As explained in Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 582, “[T]he two phrases – ‘time during which an employee is subject to the control of an employer’ and ‘time the employee is suffered or permitted to work, whether or not required to do so’ – can also be interpreted as independent factors, each of which defines whether certain time is compensable as ‘hours worked.’ Thus, an employee who is subject to an employer’s control does not have to be working during that time to be compensated under [the applicable] Wage Order.”
Courts have looked at various factors to evaluate the level of control over employees in determining whether on-call time needs to be paid by the employer: (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. See Mendiola v. CPS Sec. Solutions, Inc. (2015) 60 Cal 4th 833, 841. In addition, Courts also “take into account whether the ‘[o]n-call waiting time…is spent primarily for the benefit of the employer and its business.” Mendiola at 841 (citing Gomez v. Lincare, Inc. (2009) 173 Cal.App.4th 508).
In Mendiola v. CPS Sec. Solutions, Inc., security guards resided at the employer’s trailers located on construction sites they were responsible for patrolling. They were obligated to respond immediately in uniform when contacted by a dispatcher or became aware of suspicious activity. If guards left the property, they had to report where they were going, and could not be more than 30 minutes away from the site. In addition, the employer placed restrictions on the guards’ living conditions in the employer-provided trailers, and the employees could not have visitors, pets, or consume alcohol. Mendiola at 841. In addition, the California Supreme Court held that the guards’ “mere presence” was integral to CPS’s business, as “the idea that construction sites should have an active security presence during the morning and evening hours.” Id. at 841-42. Given these facts, the Supreme Court held that the security guards’ on-call hours constituted compensable hours worked and, further, that defendant could not exclude “sleep time” from plaintiff’s 24-hour shifts. Id. at 838. Therefore, employers should consider the following five issues:
- Review the overall control over the employee while they are on-call.
- Review the geographic restriction on the employee’s movement.
- Is the employee’s presence or quick response integral to the business?
- Review the frequency that the employee is call while on standby.
- Analyze if other factors establish control over the employee while on-call, such as the requirement that the employee respond in uniform or drive a company car when responding to a call.
It is important for employers to carefully review the total circumstances surrounding employees who are on-call. The penalties can be astounding, and as Mendiola established, employees on-call who are even sleeping may still be entitled to pay.
Photo courtesy of Satish Krishnamurthy