Under California law, hours worked is defined as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether required to do so or not.” If employees are under your control, it is likely that you will have to pay them even if they are on-call or on standby and not actively working. This is generally referred to as “controlled standby.” On the other hand, on-call time does not have to be paid if employees can use time spent on-call primarily for their own benefit, generally referred to as “uncontrolled standby.”

Courts typically consider the following factors to determine whether on-call time should be paid as controlled standby time:

• Are there excessive geographic restrictions on the employee’s movements?
• Is the frequency of calls unduly restrictive?
• Is there a fixed time limit for the employee to respond to the call that is unduly restrictive?
• Can the on-call employee easily trade their on-call responsibilities with another employee?
• Can the employee engage in personal activities during on-call periods? If so, to what extent?
• What is the nature of the employment relationship and the industry practice?
• Are there any other limitations on the employee’s ability to use the time for their own benefit?1

Agreements between you and your employee that the on-call time will be unpaid do not hold up against state requirements. If the time meets the above criteria, it must be paid, regardless of any agreement to the contrary.

If the required response time is so restrictive that employees aren't free to use the off duty time to their own benefit, that would weigh in favor of the time being controlled standby. If the required response time, in practice, unreasonably restricts the geographical boundaries of the worker, then that would likely be controlled standby and compensable. While there is no hard and fast rule for response time, sufficient time to report is generally at least 20 to 30 minutes, depending on geographic population density.

The mere fact that an employee carries a cell phone or similar device doesn’t usually mean that the time counts as compensable hours worked, as long as the employee is free to come and go as they please.

You must give employees sufficient time to report so that they can be free to use the off duty time to their own benefit. Sufficient time to report is generally at least 20 to 30 minutes, depending on geographic population density.

If the employee is on controlled standby, both the time spent on standby and the time spent on call-backs is counted as time worked. If the employee is on uncontrolled standby, only the time spent on call-backs is counted as time worked. You must pay call-back or controlled standby time the same as regular hours worked and pay the regular or agreed wage for this period, as well as applicable overtime.

If the employee is on controlled standby, time worked includes a reasonable time for travel both to and from the worksite from the point at which the employee is summoned to return to work. Use good judgment and be reasonable when you determine travel time. For example, consider an employee who lives three miles from the worksite. However, when you call him to return to work at 12:00 p.m., he is at the beach 20 miles away. The employee returns and works until 9:00 p.m. In this case, the travel time would be calculated from the beach to the worksite and back to the employee’s home.

If the employee is on uncontrolled standby, you will need to pay the employee for travel time if they are reporting to a client’s premises, versus reporting to their regular place of business. For example, if the employee is called to fix a network problem at a client’s office, you would pay the employee travel time. This is the same rule that would apply for normal travel time before and after the employee’s regular work day. For more information, see Travel Time.

On the other hand, if an employee who is on uncontrolled standby is called back to the employee’s regular place of business, there is no bright line rule that applies, and many employers do not pay for that travel time. The Department of Industrial Relations (DIR) doesn’t appear to enforce a rule requiring employers to pay for call-back travel time to the regular place of business when an employee is on uncontrolled standby.

You should also consider whether a telecommuter’s on-call time is compensable. If telecommuters are free to do whatever they choose at home while waiting for the call to begin work, wages probably aren’t required for that time.

Employers should also be aware of the potential reporting time pay obligations when an employee is called to work while on standby status. If the employee is on controlled standby (i.e., paid) and is called to work, the reporting time pay provisions do not apply. If the employee is on uncontrolled standby, however, then reporting time pay provisions may apply. For more information, see Reporting Time Pay.

On-Call Employees Staying Overnight On Employer Premises

Some businesses have employees who stay overnight on the premises, such as security guards or apartment managers. For the most part, the same controlled/uncontrolled standby rules apply. However, certain Wage Orders have specific rules that deviate from the general rules, and you should always refer to the Wage Order that covers your particular business.

For example, a court held that under Wage Order 5 (Public Housekeeping Industry), on-call resident employees, such as resident managers, need only be paid for time spent actually performing their assigned job duties; you don't have to pay on-call resident employees for the time they spend on-call if they can freely engage in personal activities, regardless of any geographic restrictions you impose on these activities.2

In another case, the California Supreme Court case discussed how to handle on-call time under Wage Order 4 when security guards were required to stay overnight on the employer's premises.3

The employer provided security guards for building construction sites. The guards spent part of their day on regular security patrols and spent the night at the guards' assigned job site in the employer's residential trailers. Guards were required to be on-call, investigate alarms and suspicious activity, respond to disturbances and prevent vandalism and theft.

The guards signed on-call agreements with the employer. If the trailer guard wanted to leave the jobsite during on-call hours, the guard had to notify a dispatcher, provide information as to where the guard was going and for how long, and wait for a relief guard. The guard had to remain within a 30-minute radius, carry a pager and respond immediately if called. If no relief guard was available, the employer could order the guard to remain on the premises, even if the guard had an emergency.

On the weekdays, the guards were on patrol for eight hours and on-call for eight hours. On the weekends, the guards worked 24-hour shifts and were on patrol for 16 hours and on-call for eight hours. During the nighttime shifts, the employer did not compensate the guards for the on-call time, except for time actually spent responding to disturbances. If a guard spent three or more hours engaged in investigations during the on- call period, the guard would be paid for the entire eight hours.

The guards sued the employer for unpaid wages and overtime, alleging the on-call policy violated the Labor Code and the applicable Wage Order (Wage Order 4).

The main issues before the Court were whether the hours spent “on-call” and in the trailers should count as “hours worked” and be paid to the guards and whether the employer could exclude up to eight hours of sleep time from the guards’ 24-hour weekend shifts.

The California Supreme Court held that the guards were entitled to compensation for all on-call hours because the employer exercised significant control over the guards' activities during the on-call time; the guards were required to live onsite, respond promptly, and were only able to leave if a reliever was available. They were also restricted in their personal pursuits; no children, pets, alcohol and no visits with adult family or friends without permission.

On the issue of excluding sleep time, the California Supreme Court held that the employer could not exclude eight hours of sleep time from the guard's 24-hour weekend shifts. This case is limited to Wage Order 4; different Wage Orders, such as those applying to ambulance drivers, etc., contain different language allowing for the exclusion of sleep time.

Truck Driver Layover Breaks

California and federal laws require that truck drivers take 10-hour “layover” breaks between shifts. During these mandatory breaks, drivers aren’t permitted to perform any work.

A court upheld a jury's decision that an employer is responsible for paying wages to their long-haul truckers for “non-working” layover time because the truckers were still subject to the employer's control during that time.4

The employer required its drivers to obtain their supervisors' permission prior to taking layovers at their homes but didn't otherwise restrict driver movements during layovers.

Referring to the ability to go home as “one of the most fundamental privileges all employees enjoy,” the Ninth Circuit found that a restriction on that ability was enough to constitute control over the drivers. Even though the employees could engage in almost any other behavior while on layover, the fact that they could not go home without permission was enough of a limitation on their movements and activity to require payment for all layover hours.

1. Berry v. County of Sonoma, 763 F. Supp 1055 (1991); Madera Police Officers Assoc. v. City of Madera, 36 Cal. 3d 403 (1984)