Many businesses, especially those in the service or medical industries, might schedule some of their staff to be on-call. Usually, this means these employees need to be available if called upon to work during their scheduled on-call time to handle emergency situations, to cover for employees who may have called out sick, or any other scenario that might require additional staff.


Designating a portion of an employee’s time as on-call can cause some confusion among employees and payroll teams alike. Not all on-call scenarios will be the same, and this can sometimes make it difficult to define what, if any, portion of the on-call time is compensable time. To avoid misunderstandings, it’s important to clearly communicate the company’s policies regarding on-call time to employees.

On-Call, but Off-Site

In some cases, being on-call might just mean that an employee just needs to be available when called upon and able to respond and/or reach the worksite within a reasonable amount of time after being contacted. Typically, this will also require the employee to avoid the consumption of alcohol and refrain from participating in activities that may prevent or impair them from being able to perform their work. Other than that, the employee is free to spend their time as they please. This type of on-call arrangement generally is unpaid unless the employee is called to work.

On-Call, and On-Site

Some on-call arrangements might require employees to remain on-premises or be available to respond within a shortened period of time – sometimes minutes – after being called. These types of arrangements are very restrictive for the employees and can limit the extracurricular activities that they might otherwise engage in, had they not been on-call. In certain industries or even during certain times of the year, the frequency of the calls might require employees to respond more often than usual. In these situations, it’s more than likely that the employer compensates the employee for time spent on-call.


So, as a general rule when determining whether on-call time should be paid or unpaid, the business should consider how restricted the employee’s activities are while they are on-call, and how quickly they are expected or required to respond. In situations where the time is not required to be paid, some companies may decide to pay a premium similar to a shift differential, as an incentive for employees to volunteer to be on-call. Of course, any time that the employee spends actually working in response to a call should be paid, and the hours and wages should be included in any applicable overtime calculations.


On-call pay can be tricky to deal with, and incorrectly handling pay for on-call scenarios can be costly for an organization. The experts at Valor Payroll Solutions are here to provide assistance and save you the time and stress of having to decipher the complex payroll and HR rules and regulations to keep your business compliant. Contact us today and see how we can help!