In California, the Industrial Welfare Commission Wage Orders define “hours worked” as the time during which an employee is “subject to the control of the employer,” and consists of all the time the employee is “suffered or permitted to work, whether or not required to do so.” California has long relied on the “controlled” vs. “uncontrolled” standard to determine whether an employer must pay a non-exempt employee for being “on call” or on “standby”.
Whether an employer must pay an employee for being on call or on standby depends on the specific requirements employers are placing on the employees who are on call or standby. Specifically, the California Department of Labor Standards (DLSE) considers the following standards to determine if on call time is compensable:
(1) geographical restrictions on the employees’ movements;
(2) required response time;
(3) the nature of the employment; and
(4) the extent the employer’s policy impacts personal activities during on call time.
Essentially, “controlled” standby time is where the employee is either required to stay at a worksite while on standby or is required to stay close to the employer’s worksite so that they cannot use the time spent while on standby to conduct their own business. The California Super Court rules that this is the case even if the employee is sleeping during standby time. Mendiola v. CPS Security Solutions, Inc., 60 Cal.4th 833 (2015). The California Supreme Court further found that security guards, who were required to stay in trailers on worksites in case they were needed, were entitled to be paid for all their time, even if they spent it watching TV, scouring the Internet or dozing. Id. In other words, if the employer places constraints on an employees’ activity during standby, this could require the time to be compensated.
Employees who are on controlled standby time must be paid for the entire time they are required to be on standby. Notably, controlled standby time may be compensated at a different rate than is paid for other work by the same employee, so long as the employee is paid at least minimum wage.
Now, uncontrolled standby time is where the employee is not required to stay at the worksite, and they can spend their time while on standby conducting their own tasks. For example, an employee who is only required to keep their cellphone on them while on standby is likely on uncontrolled standby. An employee who is on uncontrolled standby would not need to be paid for any of the time when they are waiting and able to do other things and only paid for the actual hours they work.
Time the employee is working (or on controlled standby) must be added to their regular time worked during the week to determine if overtime compensation is owed to the employee and employees must keep accurate records of time working while on call.
In 2019, the California appeals court further revised how employers must compensate employees for standby time when they are required to call in for work. Specifically, the Court ruled that employers who require employees to call to find out whether they are working or not triggers Wage Order 7’s reporting time pay requirements, even if they end up not scheduled to work. Ward v. Tilly’s Inc., 31 Cal.App.5th 1167 (2019). In Ward v. Tilly, employees were assigned to on call shifts but were not told whether they were going to be working that day until they called in two hours ahead of time. They were not paid unless they were told to come in to work and no compensation was paid for their on-call time. Employees were also disciplined if they failed to call two hours before their on-call shifts or if they contacted the stores late or refused to work. There, the Court held that if an employer requires the employee to call in two hours before the start of a shift, and the employee does so but “is not put to work or is furnished less than half said employee’s usual or scheduled day’s work,” then the employer is liable for reporting time pay.
Employers who are unsure about whether they should pay its employees for stand-by or on call time should consider how the employee’s time in limited by being on call/standby. Specifically, whether they able to partake in personal activities during this time or if they limited by where they can go and what they can do. Employers must review their reporting time pay policies to ensure compliance with applicable law and continue to monitor for any new court decisions on this issue.