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November 19, 2010
On-Call Pay and Overtime Requirements

In a BLR webinar entitled "Overtime: Legal Strategies for Whittling Down Your Payouts Without Breaking the Law," Harold (Hal) M. Brody, Esq., partner, and Fredric C. Leffler, Esq., Senior Counsel in the Labor and Employment Law Department of Proskauer Rose LLP described the relationship between on-call pay and overtime requirements.

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There are number of variables that dictate whether or not on-call pay is compensable:

  • Whether it is controlled or uncontrolled standby
  • The extent of control the employer exerts over the employee and whether the employee has the ability to effectively use the waiting period for his/her own private uses

The tests for the above are as follows:

  • Are the restrictions primarily directed toward the fulfillment of the employer's requirements and policies?
  • Is the employer substantially restricted so as to be unable to attend to private pursuits?
  • Other factors to consider are:
    • On-premises living requirement
    • Excessive geographic restrictions of an employee's movements
    • Frequency of calls
    • Time limit given to respond
    • Ability to trade on-call responsibilities with another employee
    • Use of electronic devices
    • Whether an employee actually engages in personal activities during the on-call time

If the employee is required to have or wear electronic devices and stay within a certain radius of the workplace while on-call but not otherwise limited in conducting personal affairs, the on-call time is not compensable .

Shift differentials, once paid, must be computed into the regular rate.

Generally any payment made pursuant to a bona fide employee benefit plan is excluded from the regular rate calculation.

Harold (Hal) M. Brody, Esq. is a partner in the Labor & Employment Law Department with Proskauer Rose LLP (www.proskauer.com). His practice is characterized by its diversity and he has represented employers in virtually every facet of labor and employment law. Fredric C. Leffler, Esq. is a Senior Counsel in the Labor & Employment Law Department and co-head of the Employment Law Counseling and Training Group. He represents major private and not-for-profit employers in all aspects of labor and employment law.

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