On-Call Time: Engaged to Wait or Waiting to Be Engaged?

For employers with on-call employees, a recent case from the U.S. Court of Appeals for the Tenth Circuit offers a good reminder of the rules regarding the compensability of on-call time under the Fair Labor Standards Act.

In Barnes v. Omnicell, a medication device company’s customer contracts required it to have a technical service engineer (TSE) make initial contact within an hour of a service request, with an on-site visit to follow within 6 hours for urgent issues, and up to several days later for non-urgent ones. The TSE here was paid for a 40-hour week, covering 5 8-hour days, plus overtime. When he was not working his regular workweek, he was on call, during which he was free to spend his time as he wished, as long as he could respond to calls within one hour. The TSE filed suit, seeking unpaid wages of more than $2 million, alleging that “he was on duty 24 hours per day, 7 days per week.”

As the Tenth Circuit reminds us, whether waiting time is compensable time worked under the FLSA depends on the circumstances. The test for compensability – whether the employee is engaged to wait (compensable) or waiting to be engaged (non-compensable) – considers factors including the agreement between the employer and employee, the nature and extent of the restrictions, and the relationship between the services rendered and the on-call time. An employee is engaged to wait where waiting is an integral part of the job – such as when the employee must remain on the employer’s premises or their time is so restricted that it interferes with their personal pursuits. On the other hand, an employee is waiting to be engaged where they are completely relieved from duty and the time is sufficient for them to use it effectively for their own purposes. Another way of looking at it is whether the on-call time is spent primarily for the benefit of the employer or the employee.

In this case, the Tenth Circuit found that the employee was not entitled to be paid for his on-call time – he could engage in personal activities, he was not required to remain on the premises, the frequency of calls was not unduly restrictive, and he was not typically required to conduct immediate on-site visits, but could do much of the work over the telephone. Although his time may have been somewhat restricted, those restrictions were not so significant to consider the time as being spent predominantly for the employer’s benefit.

Employers with on-call employees should review the rules carefully – and consult with employment counsel – to ensure that they are properly compensating their employees.