In California, the state’s Wage Orders generally define an employee’s hours of work 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.” Although this basic rule appears relatively straightforward on its face, disputes regarding whether employees are entitled to be paid for time spent engaged in certain activities are increasingly common, and claims alleging that employees should be paid for time spent “on call” or “on standby” are prime examples.

Yes, Employees May Be Entitled to Pay Even When Not Actually Working

According to California’s Division of Labor Standards Enforcement, “an employee who has the choice of being available or not available to respond to a request by the employer to return to work for an emergency may be on uncontrolled standby if the employee is completely unrestricted to use his or her time for their own purposes.” Such “free” standby time is not controlled by the employer and, thus, it does not count as hours worked for payroll purposes. In contrast, when an employee is “controlled” by the employer during on-call time, the time counts as hours worked and is compensable.

Employers may pay “controlled” standby time at a rate different than the employee’s usual base hourly rate as long as the employee is paid at least the minimum wage. Employers must also consider all compensation paid to employees when they are on-call, whether controlled or not, when determining the so-called “regular rate” used to calculate overtime wages.

What does “control” mean in the context of on-call time?

In a 2015 case, Mendiola v. CPS Security Solutions, Inc., the California Supreme Court set forth various factors that courts should consider to determine whether an employer exerts sufficient control over an employee during “on call” or “standby” time to make the time compensable:

The California Supreme Court stated that none of these factors are dispositive, but greater restrictions to employee movement or time generally signal a greater degree of control.

Requiring employees to confirm “on-call” shifts may trigger reporting time pay

In addition to assessing whether on-call time is “controlled” or “uncontrolled,” employers must also be cautious about requiring employees to call in prior to the start of a shift to learn if work is available. In 2019, a California Court of Appeal decided that, under certain circumstances, an employee may be considered as having “reported to work,” and therefore entitled to reporting time pay, if the employer requires the employee to call in before their shift to see if they are needed.

Calculation of hours worked is a seemingly basic step in the payroll process. Many mistakes result from misunderstanding the rules relating to “on call” time, however. Whether “on call” or “standby” time should be treated as compensable hours worked can be a complex question that must be answered on a case-by-case basis rather than by mechanically applying a set of rigid rules.

What should employers do now?

Source: Hopkins & Carley

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