Rules of On-Call work and Shift work in the United States of America & Canada

United States

On-Call Time

“On-call time” means any time that an employer requires an employee to –

• be available to work, or
• contact the employer, or a designee of such employer, or wait to be contacted by such employer or designee, in order to determine whether the employee is required to report to work

An employee who is on-call is not working, but they are available in case they need to work, and are also required to be remunerated. Employees who are on call may need to remain at or near their workplace.

If the employee is restricted which basically means that the employee is not allowed to use the on-call time for personal use, in such a case their time is largely considered as hours worked, and the employer is required to provide on-call pay. If the employee’s work is not restricted, employers likely do not need to pay them for their waiting time.

Factors to be considered in deciding as to whether the employer is exercising control over the employee when the employee is on call includes:

• Is the employee required to remain at the work location?
• If allowed off-premises are there too many restrictions on the employee’s movements?
• Is more than merely leaving contact information with the employer required?
• How often is the employee actually contacted while on call?
• Is there a fixed time for an employee to answer while on call, and is the response time excessively restrictive?
• Can the on-call employee easily negotiate on-call responsibilities with another employee?
• To what extent is the employee permitted to freely use the time while on call?

If most factors stated above are adhered to and the employer exercises control over the movements of the employee, then the employee is considered to be on-call and the hours are compensated.

Unpredictable businesses (e.g., hospitals) may use on-call provision.. Some instances of on-call jobs consist of nurses, doctors, repair workers, IT technicians, retail employees, etc.

Another factor: The DOL increased its roster of Wage and Hour Division field investigators by 30% in 2009.

Example 1: An employee is reading a story to his child when the employer calls him. The employee stops reading the book and drives to work. After answering the call and spending time at work, the employee goes back home and continues reading to his child. Again, he is called for work by the employer. The consistent phone calls prohibit the employee from engaging in personal activities. As a result, the employers need to provide on-call compensation for the entire on-call work to the employee.

Example 2: On-call employees spend the day at the mall. For the duration of the 4-hour on-call work, they receive one call that necessitates them to stop what they are doing for 30 minutes. Employees will be paid for the 30 minutes of work. But employers do not need to pay the employees for the other 3 hours and 30 minutes.

In the United States, Federal Law applies in many of the states for on-Call Time-related activities. In the case of Federal law, employers must count employee on-call time as hours worked for purposes of minimum wage and overtime requirements.

Some states have their own regulations on On-Call work, but the overall definition & criteria remain the same. When an employee is required to stay on-call work premises or in the nearest vicinity and cannot use the time for his/her personal use, such time is considered as hours worked and is usually compensated at a regular rate of pay or overtime rate as per the statutory law.

Even if the employers are not required under Federal or state laws to provide on-call pay to employees whose time isn’t restricted, they can choose to do so. However, when hours vary due to demand-side considerations, the determination of eligibility and the benefits levels becomes very problematic.

Shift Work

Shift work refers to a work schedule that is performed in rotations. The practice typically sees the day divided into shifts, set periods of time during which different groups of employees perform their duties. Businesses that require employees to work 24-hour coverage or need a 24-hour day to boost productivity may ask employees to work in shifts. Shift work happens in a 24-hour-a-day work schedule and sometimes 7 days a week to keep a company functioning without a problem.

While on-call work is not predictable, shift work mostly involves the regular rotation of shifts along with some irregular variation, such as being asked to report to work on a day off, to come in early for a shift, or to stay after the end of a regular shift to cover production needs.

A split shift schedule is when an employee works two shortened shifts during a day with an elongated break in between. An employee might work from 7 a.m. to 11 a.m. and take a break until their next shift from 5 p.m. to 9 p.m.

Split shifts are more common for employees in certain businesses, such as in restaurants and other types of foodservice, hotels, the security guard industry, and transportation. A ramp agent at a small airport, for instance, may only be needed during a short period while flights depart and arrive. A server or bartender in a restaurant may only be in demand around lunchtime and again in the evening.

In California, a split shift is a schedule that is interrupted by an unpaid and non-working time duration established by the employer. The time period between the shifts needs to be longer than a bona fide meal period and should be within the same workday. The break between shifts cannot be a meal or rest period and must be to the benefit of the employer. If an employee requests the break for their own convenience, then it is not a split shift. The split shift premium is one hour at the state minimum wage, or the local minimum wage if there is one, whichever is greater. An example of a split shift is a restaurant employee whose work schedule is to work from 10 am to 1:30 pm and return to work at 4 pm to work an evening shift.

Shift work arises in the service and manufacturing industries but shift work can take place in any job. Most common industries which use shift work are call-center representatives, customer service industries, food runner, housekeeping, cooks, bartender, stock clerk, cashier, EMT, firefighters, police officers, security guards, nurses, doctors, bus drivers, factory, and warehouse employees.

Split shifts are widespread in businesses that have the highest periods of work at certain times of the day. For example, school bus drivers take children to school in the morning and take them home again when school is out. In restaurants, cooks and waiters frequently work only during mealtime rush hours, which means they might work the lunch shift, stop working for a few hours, then come back for the dinner shift. Teaching Staff in colleges and technical schools serve the needs of day and evening students by dividing their hours among morning, afternoon, and night courses.

Example: As a food delivery driver, an employee work a three-hour lunch shift from 11 a.m. to 2 p.m. and a five-hour dinner shift from 6 p.m. to 11 p.m.

In accordance with the US Bureau of Labor Statistics, approximately 16% of wage and salary employees follow shift work schedules. This includes the 6% who work evening shifts and 4% who work night shifts. Roughly 25 million Americans are shift employees with rotating or irregular working hours. Some of them work in retail, but they also work in food service, personal care, and the service sector.

Many shift work employees follow a fixed schedule with the same beginning and ending times for each shift, as well as the same work days during the week. A rotating schedule, on the other hand, may include different shift times and/or different workdays that vary from week to week.

The Federal Fair Labor Standards Act does not require an employer to pay for a night shift, weekend work, split shift, rotating shift, or shift differential. These premiums are either decided by the employer, the union or by state law.

Example: An employee who works the “graveyard” shift may receive a pay differential of 10%. Let us say an employee gets $20 per hour on the regular shift. With a 10% shift differential, the employee would be paid $22 per hour, with $2 per hour being the shift differential ($20 x 0.10 = $2).

State by State analysis of On–Call Work and Shift Work

Some states in the US have On-Call time regulations that are governed by Federal Law and have no Shift Work policy as per the State Laws. While some States have laid down their own On-Call Laws and have Shift Work Pay regulations.

*Alabama, Delaware, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, Nevada, North Carolina, Oklahoma, Puerto Rico, Pennsylvania, South Carolina, South Dakota, Texas, Tennessee, Vermont, Virginia, & Wyoming have their On-Call Regulation governed by FLSA. These states have no specific law on shift work.

Canada

On-Call Work

Canadian courts have ruled out a few points to be considered while deciding, whether an employee was in fact working on-call or not. Below are few factors –

• Whether the employer required employees to stay in a particular area or workplace while on-call.
• Whether an on-call employee is allowed to engage in personal activities while on on-call.
• Whether the employee must live on the employer’s premises; etc.

If any or all of the factors are satisfied, it can be safely concluded that an employee is working on-call for his/her employer. Though the conditions mentioned above are not exhaustive, they can still provide a definite approach towards concluding whether an employee has been employed on such a provision or not.

Now, consider an example where an employee named Ben, has been called to report for 3 hours by his employer, compared to his regular 8 hours of working time on a Saturday, which is his usual weekly off day. In such a case, he shall be paid for 3 hours at the appropriate wage rate, as he has been called outside of his normal working hours at the request of his employer.

This is a typical example of what is called as On-call work. This provision is also known as the 3-hour rule in Alberta. The 3-hour rule in Alberta signifies that an employee who reports to work shall be paid for at least 3 hours at minimum wage rate, subject to an exception where the employee is unavailable to work for the entire 3 hours. In such a scenario, the employee will be paid only for the actual hours worked.

The Human resources shall however be mindful of one important key factor while calculating on-call wage in Alberta, which is if the employee’s regular wage rate is greater than the minimum wage rate, and the employee has worked for less than 3 hours, he shall be paid the higher number of wages, as long as total wages paid, is higher than 3 hours calculated at minimum wage rate.

A similar on-call provision exists in Nova Scotia, where if an employee is called into work outside the employee’s regular work hours, the employer must pay the employee for at least 3 hours of work at the minimum wage rate. This is applicable even if the employee works only 1 or 2 hours. The same is the case in Yukon, where an employee who reports to work either at the call of the employer or at his/her regular shift, such an employee is entitled to pay for at least 2 hours at the regular rate of wages, irrespective of whether or not the employer requires the employee to work part or all of the 2 hours.

However, on-call work in Ontario is different compared to other provinces in Canada. Here, if an employee who regularly works more than 3 hours a day is required to report to work and works for less than 3 hours, despite being available to work longer, the employer shall pay the employee wages equal to either the sum of the amount the employee earned for the time worked and wages equal to employee’s regular rate for the remainder, or wages equal to the employee’s regular rate for 3 hours of work, whichever is greater.

Certain exceptions are applicable in Ontario:

There are a few cases, where the 3-hour rule does not apply, such as –

• If the employee regularly works 3 hours a day or regularly works less than 3 hours a day.
• Where an employee has reported for work when directed not to do so by the employer, even on a day that is normally a workday.
• The wording “despite being available to work longer” clarifies that in order to apply this rule, the employee must be available to work for more than 3 hours. Therefore, if the employee presents himself/herself for work and leaves early, for example, due to illness, etc, the employee will not be covered under such a rule.

In general, on-call provision is used in industries such as construction companies, factories, multinational corporations, etc. Employers who employ employees on call need to understand how this will impact their day-to-day operations and check if the current policies and practices within their organization are up to date as per compliance or need to be updated in order to avoid legal disputes overcompensation.

Let us look at some of the examples –

Example 1: An employer establishes a shift schedule that has the employee working 4-hour shifts on Mondays, Wednesdays, and Fridays and 2-hour shifts on Tuesdays and Thursdays. The regularly scheduled Tuesday and Thursday shifts would not trigger the application of the 3-hour rule because the employee regularly works less than 3 hours on those days. Note though that if the employee were not provided with at least 3 hours of work on a Monday, Wednesday, or Friday, the rule would apply.

An employee regularly works more than 3 hours per day and is required to present herself for work; Her regular rate is $28.00/hour for work performed by her. She works for 1 hour and leaves at the employer’s order. She is paid her regular rate of $28.00 for one hour’s work.

Entitlement is the greater of:

• The sum of the amount the employee earned for the time worked, and wages equal to the employee’s regular rate for the remainder of the time.

  ($28.00 + (2 X $28.00)) = $84.00, or

• Wages equal to the employee’s regular rate for 3 hours of work.

  $28.00 X 3 = $84.00

In this example, the employee is entitled to $84.00.

Example 2: Applying the same facts as in the first example, but assuming the employee earned overtime pay (at 1.5x her regular rate) for the 1 hour she worked.

In such case, entitlement is the greater of:

• The sum of the amount the employee earned for the time worked, and wages equal to the employee’s regular rate for the remainder of the time.

  $42.00 + (2 X $28.00) = $98.00, or

• Wages equal to the employee’s regular rate for three hours of work.

  $28.00 X 3 = $84.00

In this example, the employee is entitled to $98.00.

Shift Work

Shift work is generally carried out in industries that require to be operational 24/7. Many IT companies, medical establishments, entertainment centers, etc. usually make employees work in shifts, in order to keep the work premises operational round the clock. With this practice, the day is typically divided into shifts or set periods of time during which a group of employees performs their tasks.

In Canada, Federal law does not provide for any specific provisions regarding shift work. Instead, one may need to look at the terms and conditions of employment. Generally, these would have to specifically grant employers the right to make employees work in shifts. Only three provinces in Canada explicitly grant this right to employers. British Columbia (BC), Yukon, and Alberta provide specific provisions regarding shift work. In BC, an employer must ensure that an employee working a split shift completes the shift within 12 hours of the beginning of the work schedule. Similar is the case in Yukon as well, where an employee who works split shift, his/her standard work hours shall not exceed a 12 hour period. immediately following the beginning of the shift. Whereas in Alberta, an employee who works in split shifts and whose break between shifts exceeds 1 hour, such an employee shall be entitled to minimum compensation for each segment of their shift.