Don't Forget About Pay for Waiting Time and On-Call Time
The federal Fair Labor Standards Act (FLSA) requires employers to compensate non-exempt employees at least the minimum wage for each hour worked and pay them overtime (at 1.5 times the employee's regular rate of pay) whenever they work more than 40 hours in a workweek.
The amount employees should receive in pay cannot be determined accurately without knowing the number of hours worked. This can be especially tricky when the employee has waiting time or on-call time during the workweek. To help you navigate these situations, here's a summary of the federal rules and guidance.
Waiting time
Whether the time an employee spends waiting is considered hours worked under FLSA depends upon the particular circumstances. Keep in mind that states may have their own rules about when waiting time is compensable. Where federal and state rules conflict, the rule more beneficial to the employee generally applies.
What is considered hours worked under federal law
Generally, if the facts show that the employee was engaged to wait, the time must be considered hours worked, according to guidance from the U.S. Department of Labor. This means the employee is waiting for work to do, or for repairs to be made, while on duty.
Here are some examples of when periods of inactivity must be considered hours worked:
- A receptionist who reads a book while waiting for customers or telephone calls.
- A messenger who works a crossword puzzle while awaiting assignments.
- A firefighter who plays checkers while waiting for emergency calls.
- A factory worker who talks to fellow employees while waiting for machinery to be repaired.
- A waitperson in a restaurant waiting for customers to arrive.
The inactive time is hours worked even if the employee is allowed to leave the premises or the job site during such periods of inactivity, according to FLSA regulations. That is because the period during which the inactivity occurs is unpredictable and/or usually of short duration, so the employee is unable to use the time effectively for their own purposes.
Download our complimentaru guide: FLSA & Overtime Rule Guide
What isn't considered hours worked under federal law
By contrast, if the facts show that the employee was waiting to be engaged, it isn't considered hours worked under the FLSA, according to the Department of Labor. This means there are minimal restrictions on the employee's activities so they can use the time effectively for their own purposes. The Department of Labor says that waiting time isn't hours worked if:
- The employee is completely relieved from duty;
- The periods are long enough to enable the employee to use the time effectively for their own purposes (consult legal counsel if necessary to help make this determination);
- The employee is definitively told in advance that they may leave the job; and
- The employee is advised of the time that they are required to return to work.
For example, a truck driver is sent from Washington, D.C. to New York City, leaving at 6:00 a.m. and arriving at 12:00 noon. If once the driver arrives, if they are completely and specifically relieved from all duty until 6:00 p.m. when they go on duty for the return trip, the time of inactivity isn't hours worked, according to the Department of Labor.
On-call time under federal law
Generally, on-call means being available to be contacted to work if necessary but not formally on duty. Whether on-call time is hours worked under FLSA depends upon the particular circumstances.
An employee who is required to remain on-call on the employer's premises (or so close to the workplace that they cannot use the time effectively for their own purposes) is working while "on-call," and all of the time is considered hours worked and therefore must be paid, according to the Department of Labor.
By contrast, an employee who is required to remain on-call at home isn't necessarily working while on-call. The inactive time might not be considered hours worked if the employee is still able to use the on-call time effectively for their own purposes. According to guidance from the U.S. Department of Labor, the employer may require the employee who is on-call at home to be accessible by mobile phone without the inactive time being considered hours worked.
As such, employers must be careful about any restrictions they put on such employees because additional restrictions on the employee's freedom could require that the inactive time be considered hours worked.
For example, if the employee is interrupted with work calls to such an extent, or required to report to work so quickly, that they cannot conduct their regular personal activities, such as cutting the grass, going to the movies, going to a ball game, or engaging in other activities of their choosing, the inactive time may need to be considered hours worked. Employers should consult legal counsel to help make such determinations.
Conclusion
Employers that face waiting-time and on-call situations should review federal rules and guidance, consult legal counsel, and ensure that they are paying employees properly. They should also keep in mind that some states have their own rules for these situations, which may differ. Check your state law for details.
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This article was originally published as an "ADP HR Tip of the Week," a communication created for ADP's small business clients.
