On-call pay: when on-call time counts as work

A practical guide for employers who need people available outside normal shifts, from maintenance teams to home care and IT.

In shortUnder federal rules, the question is whether the employee is “engaged to wait” or “waiting to be engaged.” If on-call rules are so restrictive that the person cannot use the time for their own purposes, the on-call time is generally hours worked and must be paid. If they can go about their life and only need to answer the phone, usually only the time actually spent working is paid. Time spent responding to a call is always work for non-exempt employees.

What on-call time is

On-call means an employee is not on a scheduled shift but must be available to respond if needed. It is common in facilities maintenance, healthcare, home care, utilities, security, IT support and field service. Some employers call it standby, being on call or carrying the pager.

For non-exempt employees, the key payroll question is which parts of that time count as compensable time. Getting it wrong can lead to unpaid wages, and the amounts add up quickly because on-call periods are often long.

The federal standard

The Department of Labor’s interpretive rules on hours worked (29 CFR Part 785) describe two situations. An employee who is required to remain on the employer’s premises, or so close by that they cannot use the time effectively for their own purposes, is working while on call. An employee who only has to leave word where they can be reached, or carry a phone, is generally not working during the waiting time.

Courts look at the full picture rather than a single factor. Questions that often come up include:

Examples along the spectrum

Fictional examples of on-call setups
Setup Likely treatment under federal rules
A technician must stay in a break room at the plant overnight in case a machine fails On-call hours are likely hours worked
A nurse must stay within the hospital building during the on-call period On-call hours are likely hours worked
An IT admin carries a phone on weekends, may go anywhere within reasonable reach and rarely gets calls Waiting time is likely not hours worked; time spent fixing issues is
A maintenance worker is on call at home but must answer within five minutes and is called several times every night Risky; the restrictions and frequency may make the whole period hours worked

These are simplified illustrations, not legal conclusions. The answer depends on the specific facts and on state law.

Time that is always paid

Even when waiting time is not work, the time spent responding usually is. For non-exempt employees, count:

These hours are added to the employee’s other hours in the workweek, and may push the total over 40, triggering overtime. Our guide to FLSA overtime rules explains the calculation.

State and local rules

Some states go further than the federal standard. A few have specific rules for on-call time, minimum call-in or reporting time pay when an employee is called in but sent home early, or rules for particular industries. Some cities with predictive scheduling laws also limit on-call shifts or require extra pay when shifts are added or cancelled at short notice. Always check the rules where your employees work.

Paying for on-call availability

Beyond what the law requires, many employers choose to pay something for availability itself, such as a flat amount per on-call shift or a reduced hourly rate for standby time. This can make on-call duty fairer and easier to staff. If you do this for non-exempt employees, remember that some payments may need to be included in the regular rate used for overtime. Ask your payroll professional how your on-call pay affects overtime calculations.

How to set up an on-call policy

  1. Decide which roles need on-call coverage and how often.
  2. Set clear expectations: response time, how the employee will be contacted and any limits on location.
  3. Keep restrictions to the minimum the business really needs. The more freedom employees have, the less likely the waiting time is to count as work.
  4. Rotate on-call duty fairly and publish the on-call schedule in advance.
  5. Define how call time and call-outs are recorded, and make sure employees log every response.
  6. State any availability pay in writing, and review the policy at least once a year.

Tracking on-call work

The weak point in most on-call setups is the record. A call at 2 a.m. is easy to forget by payday. Give employees a simple way to log time the moment they start responding. With the EZTime mobile app, an employee can clock in from wherever they are, with GPS location if you enable it, and clock out when the issue is solved. On-call duty can be added to the schedule so everyone can see who is covering, and managers approve the hours along with the rest of the week’s time.

Frequently asked questions

Do I have to pay employees for being on call?

It depends on how restricted they are. If they must stay at or near the workplace and cannot use the time freely, the time is generally paid. If they can go about their own activities, usually only the time spent responding is paid.

Is answering a work call from home paid time?

For non-exempt employees, time spent handling a work call is generally hours worked, even if it is short and happens at home.

Does on-call time count toward overtime?

Any on-call time that counts as hours worked, and any time spent responding, is added to the workweek total and can trigger overtime.

Can I pay a lower rate for on-call waiting time?

Many employers pay a flat or reduced rate for standby, but all hours worked must still meet minimum wage and overtime rules. Check how the payment affects the regular rate.

Do exempt employees get on-call pay?

The FLSA does not require extra pay for exempt employees, but some employers offer an on-call stipend as a benefit.

Where to go next

More on this topic

Labor rule alerts

Set overtime thresholds and weekly hour limits in EZTime and managers get an alert while there is still time to change the schedule. Expect a $20 monthly minimum, with per-employee plans from $2 a month.

Disclaimer: This guide is general information only and is not legal, payroll or tax advice. Federal, state and local rules vary and change over time, so check current requirements with the Department of Labor, your state labor agency or a qualified attorney or payroll professional before making decisions. Examples are fictional.