Controlled and Uncontrolled Standby Time and Pay

A California employee may be exempt or nonexempt. An exempt employee holds an administrative, executive, professional, or an outside sale position, and is not entitled to pay for standby or on-call time.

Any other employee is nonexempt and is entitled to extra pay for standby time, which maybe negotiated above the minimum wage of $8.00 per hour.

If a nonexempt employee is required to stay in the employer’s place of business and respond to requests for assistance or emergencies, he or she must be paid for all the hours in the premises, including waiting time.

If a nonexempt employee is not required to remain in the employer’s place of business, but is required to respond to a request by the employer to return to work for an emergency, he or she must be paid for standby time when the time is controlled, rather than uncontrolled.

Hours Worked Under Federal And State Standards:

“Hours Worked,” under the Federal Fair Labor Standards Act and the implementing regulation (29 C.F.R. 778.223) for which an employee should be paid, include: ((a) all the time during which an employee is required to be on duty or to be on the employer’s premises or at a prescribed workplace; and (b) all the time during which an employee is suffered or permitted to work whether or not he is required to do so.”

The definition of “hours worked” adopted by the California Division of Labor Standards Enforcement in 1WC Wage Orders, Sections 2(K), on the other hand, more broadly includes: (a) all the time during which the worker is subject to the control of the employer; and all the time during which the employee is suffered or permitted to work.

It should be noted, however, that employees in the health care industry providing patient care may work 12-hour shifts at straight time pay. And employees required to reside on the employer’s premises are exempt from overtime pay but not minimum wage.

Controlled Standby Time Paid By Employer:

Whether standby time is considered “controlled” by the employer and must be paid depends on the restrictions placed on the use of the time for the personal purposes of the employee.

If the standby time is completely unrestricted or free for use for personal purposes, it is uncontrolled and is not required to be paid. This standby time will not be considered compensable hours worked. But if the employer so desires, uncontrolled standby time may be compensated lower than minimum wage or by a lump sum.

As early as July 9, 1984, the California Supreme Court, through Mr. Justice Reynoso, adopted a two-step analysis in concluding that the substantial limitations placed on the time (Code 7) of the officers, sergeants and dispatchers of Madera Police Department converted that time into hours worked. See MaderaPolice Officers Assn. v. City of Madera(1984), 36 Cal.3d 403; 204 Cal.Rptr. 422; 682 P.2d 1087.

The two-step analysis consists of: first, examining “whether the restrictions on off-duty time are primarily directed toward the fulfillment of the employer’s requirements and policies;” and second, analyzing “whether the employees’ off-duty time is so substantially restricted that they are unable to engage in private pursuits.”

Both questions, according to the California Supreme Court in Madera, supra, should be answered in the affirmative.

In 1992, the Ninth Circuit looked at two predominant factors in determining whether waiting time is spent primarily for the benefit of the employer, to wit: (1) the degree to which employees are free to engage in personal activities; and (2) the agreements between the parties, in Owens v. Local No. 169, Ass’n. of Western Pulp and Paper Workers, 975 F. 2d 347 (9th Cir. 1992).

In Owens, supra, the Ninth Circuit concluded that no compensation was required for on-call time because the employees enjoyed a wide variety of personal activities on on-call hours; and they agreed to the on-call system by continuing to work under its terms.

Call-Back Travel Time And Pay:

A nonexempt employee on uncontrolled standby may be called back by an employer to perform extra work for an emergency after the termination of the scheduled hours of work.

Such an employee must be paid for all travel time spent in responding to an emergency job of the employer’s customers at the customer’s place of business, under California’s Wage and Hour Division.

But whether travel time spent by an employee for a call-back to and from the employer’s regular place of business is compensable is unclear. Because California’s Wage and Hour Division has no official position thereon, many California employers do not pay for call-back travel time.

The working time involved in a call back is “hours worked” and must be compensated by methods acceptable to the California Wage and Hour Division, to wit: (1) at the rate of one and one-half times the regular hourly rate or higher for actual time spent on the call-back; or (2) by guaranteed number of hours of work or pay at the rate of one and one-half times the regular hourly rate or higher, for each call-back, in line with federal regulations. See Wage and Hour Manual by Richard J. Simmons, Castle Publications Limited, pp. 234-235, 321-322.

Conclusion:

Compensation for standby (on-call) time of a nonexempt employee depends on whether it is controlled or uncontrolled by the employer.

If controlled, it must be paid; if uncontrolled, it need not be paid. The unsettled issues are payment of travel time of call-back and manner of payment of time spent on call-back.