What Is On-Call Pay?
On-call pay compensates availability and call-out work. Learn rates, FLSA factors, standby vs. call-back rules, examples, and how to schedule compliant rotations.
What Is On-Call Pay?
On-call pay is compensation provided to employees who must remain available to work outside their regular scheduled hours, typically to respond to emergencies, urgent issues, or unexpected business needs. On-call arrangements require employees to be reachable by phone or other communication methods and able to respond within a specified timeframe when contacted.
On-call compensation typically includes two components: standby pay (hourly rate for being available, even if not called in to work) and call-out pay (premium compensation for hours actually worked when called in). Rates vary significantly by industry, role, and level of restriction placed on the employee’s personal time.
Key takeaways
- Distinguish standby availability from compensable working time under FLSA tests.
- Define response times, geographic limits, and what counts as a call-back.
- Rotate fairly, cap frequency, and prevent fatigue in safety‑sensitive roles.
- Related: Voluntary overtime.
According to the Bureau of Labor Statistics, approximately 15% of U.S. workers have on-call arrangements, most commonly in healthcare (34%), protective services (28%), maintenance and repair (22%), and information technology (18%). Average on-call frequency ranges from 1–2 weeks per month to 24/7 availability for critical roles.
When Is On-Call Time Compensable Under FLSA?
FLSA requires pay only when on-call time is so restrictive employees cannot use it for personal purposes. Courts consider geographic restrictions, response time requirements, call frequency, and ability for personal activities.
Requires pay: Must remain at workplace, respond within 15 minutes, frequent calls making off-duty time useless, cannot engage in normal activities.
No pay required: Can stay home, respond within 30–60+ minutes, rarely called, can engage in personal activities, free to trade duties.
State variations: California requires pay when employees must report within short timeframes. New York requires minimum call-out pay (typically 4 hours). Check state laws for protections exceeding FLSA.
What Are Typical On-Call Pay Rates?
Standby pay (availability, even if not called): $2–$5/hour (entry-level), $5–$8/hour (specialized technical), $3–$10/hour (healthcare), $5–$15/hour (management).
Call-out pay (actual work): 1.5–2× regular rate, 2–4 hour minimums (even if work takes less), overtime rates (1.5×) if weekly hours exceed 40.
Weekend/holiday premiums: 1.5× standby rate (weekends), 2× standby rate (holidays), plus shift differentials for overnight periods.
| Industry | Standby Rate/Hour | Call-Out Premium | Minimum Call-Out |
|---|---|---|---|
| Healthcare | $3–$10 | 1.5–2× | 2–4 hours |
| IT/Technology | $5–$15 | 1.5× | 2 hours |
| Utilities | $4–$8 | 1.5–2× | 4 hours |
| Manufacturing | $3–$6 | 1.5× | 2–4 hours |
| Emergency Services | $2–$5 | 2× | 4 hours |
How Does On-Call Pay Interact with Overtime?
Hours actually worked during on-call periods count toward the 40-hour overtime threshold. Standby pay (availability without working) typically does not count.
Overtime calculation: Use regular hourly rate (not call-out premium) as basis. Example: $20/hour regular rate, 38 regular hours + 5 call-out hours = 43 total. Pay: 40 hours at $20 ($800) + 3 overtime hours at $30 ($90) = $890 total.
Multiple pay rates: Calculate weighted average (total earnings ÷ total hours worked) as regular rate, then multiply by 1.5 for overtime. Consult wage and hour counsel for complex calculations.
What Are Common On-Call Scheduling Practices?
Rotation: Weekly, weekend rotation, or 24/7 patterns (Panama shift) to distribute burden fairly.
Notice: 2–4 weeks advance notice; publish schedules 3–6 months ahead; allow swaps with approval. Last-minute assignments warrant extra compensation.
Frequency limits: Maximum 1–2 weeks/month, minimum 1–2 weeks between rotations. Excessive duty increases turnover.
Response times: Immediate (minutes) requires higher pay; 30–60 minutes is standard; 2+ hours for lower priority. Response times impact freedom and compensation.
Time off: No on-call during vacation or personal leave. Provide backup for sick leave. Allow swaps for special events.
What Are Best Practices for On-Call Policies?
Written policies: Document eligible positions, rotation schedules, response times, pay rates/premiums, minimum guarantees, overtime methods, and swap procedures.
Fair compensation: Provide reasonable compensation even when not legally required. Standby pay costs less than replacement recruitment.
Minimize requirements: Review if 24/7 coverage is truly necessary. Reduce frequency through preventive maintenance, automation, or cross-training.
Provide support: Ensure equipment (laptops, phones, VPN), documentation access, decision authority, and backup support.
Track data: Monitor call-in frequency, duration, issue types, and work-life impact. Optimizes schedules and justifies compensation.
Exempt status: Non-exempt employees require overtime pay for hours over 40. Exempt employees aren’t entitled to overtime but many employers provide differential or comp time.
What Are Common Challenges and Solutions?
Excessive call-outs: Analyze root causes, invest in preventive maintenance, monitoring, documentation. Set thresholds triggering review (more than 3/week indicates problems).
Inequitable distribution: Use automated rotation, track hours, adjust assignments, allow premium for extra shifts.
Family interference: Provide 2–4 weeks notice, limit consecutive periods, respect time off, compensate generously for weekends/holidays.
Time disputes: Use time-tracking systems, define clear start/stop times, document restrictions in writing.
Burnout: Limit to 1–2 weeks/month maximum, provide comp time after heavy periods, reward through bonuses or advancement.
How Does On-Call Pay Differ by Industry?
Healthcare: Standby $3–$10/hour; call-out standard plus differentials; union contracts mandate 2–4 hour minimums.
IT: Standby $5–$15/hour; call-out 1.5× rate; remote work reduces restrictiveness; typical rotation 1 week/month.
Utilities: Standby $4–$8/hour; call-out 1.5–2× with 4-hour minimums; union contracts govern including weather/hazard premiums.
Manufacturing: Standby $3–$6/hour; call-out 1.5× plus 2–4 hour minimums; preventive maintenance reduces emergencies.
Emergency services: Compensation varies by jurisdiction; call-out typically pays overtime rates.
What Are Tax Implications of On-Call Pay?
Standby and call-out pay are subject to federal income tax, FICA, state/local taxes, and unemployment insurance. Standby is added to regular withholding; call-out may be treated as supplemental wages (22% federal). Large overtime/call-out amounts can push employees into higher tax brackets. Employees should adjust W-4 if on-call income is regular.
The Bottom Line
On-call pay compensates availability outside regular hours. Typical: standby ($2–$10/hour) plus call-out premiums (1.5–2× rate), often with 2–4 hour minimums.
FLSA requires pay only when restrictions are severe (geographic limits, response times, call frequency, personal activity ability). Many employers provide standby pay voluntarily for retention.
Hours worked count toward 40-hour overtime threshold; standby typically doesn’t. Calculate overtime on regular rate, not call-out premiums.
Best practices: written policies, fair rotation with advance notice, frequency limits (1–2 weeks/month max), call-out analysis to reduce emergencies, generous weekend/holiday compensation. State laws may exceed federal protections.
Try ShiftFlow’s on-call scheduling tools to automate rotations, track hours, calculate premiums, and ensure fair distribution.
Sources
- U.S. Department of Labor – Wage and Hour Division: On-Call Time
- Bureau of Labor Statistics – Work Schedules and On-Call Duty
- Society for Human Resource Management – On-Call Pay Practices
- U.S. Department of Labor — Fact Sheet #22: Hours Worked Under the FLSA: https://www.dol.gov/agencies/whd/fact-sheets/22-flsa-hours-worked
- U.S. Department of Labor — Overtime Pay: https://www.dol.gov/agencies/whd/overtime
Further Reading
- Voluntary Overtime Management – Managing additional hours
- Panama Shift Pattern – 24/7 scheduling strategies
- Paid in Arrears Explained – Payroll timing considerations
- Staggered Shifts Guide – Alternative coverage strategies
- Split Shift Compensation – Non-continuous work periods
Frequently Asked Questions
What is on-call pay?
On-call pay is compensation for employees who must remain available to work outside regular hours for emergencies or urgent needs. It typically includes standby pay ($2–$10/hour for availability) plus premium rates (1.5–2× regular pay) for hours actually worked when called in.
Does FLSA require pay for on-call time?
FLSA requires pay only when restrictions are so severe that employees cannot use time for personal activities. Factors include geographic restrictions, response time requirements, frequency of calls, and ability to engage in personal pursuits. Unrestricted on-call time typically doesn’t require pay under federal law.
What are typical on-call pay rates?
Standby pay: $2–$10/hour of availability. Call-out premium: 1.5–2× regular rate for actual hours worked. Minimum call-out: 2–4 hours pay even if work takes less time. Rates vary by industry, role specialization, and level of restriction.
How does on-call pay affect overtime?
Hours actually worked while on call count toward the 40-hour overtime threshold. Standby pay typically does not. Employees called in who exceed 40 total hours worked per week must receive 1.5× regular rate for overtime hours.
Can salaried employees receive on-call pay?
Exempt salaried employees are not legally entitled to overtime or additional pay. However, many employers provide on-call differential, standby pay, or compensatory time off to recognize the burden of availability and improve retention.
How often should employees be on call?
Best practice is 1–2 weeks per month maximum with at least 1–2 weeks between rotations. Excessive on-call duty contributes to burnout and turnover. Frequency should be distributed fairly among qualified team members through rotation schedules.
