A dentist had several assistants “volunteer” to take turns being on-call on weekends. One of them filed a wage and hour complaint with the Department of Labor about not being paid for the time she was on-call. This cost the doctor back pay, penalties, and fines. As you can see, little misunderstandings - based on a lack of information or poor communication - can, unfortunately, have big financial repercussions.
Considerations
To determine if on-call or waiting/standby time should be treated as paid work time requires sifting through a number of definitions and requirements. The first involves whether “the time is spent predominantly for the employer’s benefit or for the employee’s.” If the time spent is for the employer’s benefit, then the time is considered compensable.
If the employee is “engaged to wait,” the time must be compensated, but if the employee is merely “waiting to be engaged,” payment for such time is not required. If an employee is not required to remain on the employer’s premises, but is required to leave word about where and how he or she may be reached, the employee is not actually working during on-call time and the time is not compensable.
In addition, most states and the federal Fair Labor Standards Act (FLSA) will consider the following factors in determining if time must be paid:
❶The degree to which the employee is free to engage in personal activities. If employees are able to engage in activities that they normally do while not on-call, it is likely that the time spent on-call is not compensable.
❷The geographical limitations associated with the on-call time. The less geographical restrictions, the more likely it is that the on-call time is not compensable.
❸The number of calls and the frequency of the calls.
❹The fixed time limit(s) for response. The less restrictive the response time, the more likely it is that the on-call time is not compensable.
❺The restrictiveness of the employer’s on-call requirements. For example, if any staff member who accepts an on-call assignment must remain within a reasonable distance from the office or cannot consume alcohol because he or she has to be unimpaired and able to work at any time. If the conditions are considered too restrictive, then the time spent on-call would be compensable.
Solutions
First, if you are going to have on-call employees, be clear about your expectations and requirements for your employees performing this duty. Second, compare your expectations and requirements with the definitions and factors we have listed to determine whether the time is compensable or not. Obviously, the safest approach, if there is a question, is to pay for the time.
The rate of compensation for employees while on-call can vary from their normal pay. The time involved can be broken down into categories, such as in-office time, on-call time, call-back time, travel time, etc. These categories are referred to as “different capacity work” or dissimilar work. Each type of work can have its own rate of pay or a “different capacity work rate.” The different capacity work rate must equal or exceed the minimum wage requirements and the affected employees must be informed of the differing rate(s) of pay. Notification of a different capacity work rate for dissimilar work should occur prior to the on-call duties and, preferably, in writing.
If an employee has to come to the office to assist a patient, you may want to guarantee a minimum number of hours of pay that would include the call time, the travel time, and the time in the office.
If, in the course of being on-call, the total hours worked exceed applicable overtime limits, then overtime compensation must be provided. The rate of pay for any overtime hours - when an employee is paid two or more different rates for hours worked for the same employer during the workweek - is determined by the “weighted-average method.” Using this method, an employee’s total weekly compensation is divided by the total hours worked at all jobs to determine the effective hourly rate for the workweek. The total weekly compensation is all hours worked multiplied by their appropriate rate, plus any other forms of compensation, such as bonuses or commissions. This makes up the total weekly compensation.
With employee wage and hour complaints up 21 percent - and reaching an 11-year record - following the steps we have outlined could save you significant stress and money.
Bent Ericksen is the founder and Tim Twigg is the president of Bent Ericksen and Associates. For more than 25 years, the company has been a leading authority in human resources and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. Both authors are members of the Academy of Dental Management Consultants. To receive a complimentary copy of the company’s quarterly newsletter or to learn more, contact them at (800) 679-2760 or at www.bentericksen.com.
