FAQ - How should we compensate employees who are on call?
Q. We have exempt and non-exempt employees who work on call shifts. How should we compensate these employees?
A. Hourly or non-exempt employees tend to be the ones eligible for on-call pay. However they tend to only be compensated for the time they actually perform the work in response to the call in. However this has been a gray area with the Department of Labor because the FSLA does not properly outline the issue. Court rulings in these cases have given the impression that compensation for response time only is okay unless the entire on call time causes the employee to not be able to effectively use the time for their own purposes. It is recommended that you get an opinion letter from the Department of Labor regarding this issue to keep on file should a legal issue arise.
In terms of managers, they are exempt and therefore are not generally compensated for on call time because it falls within the expected duties of their position. Some companies are offering some forms of perk or pager pay for manager call in''s but this can be seen as overtime payment and could get the company into legal issues.
For additional information concerning the legalities of providing on call pay, you should contact your states Department of Labor office or a labor attorney.