Have you wondered whether you need to pay employees while they are “on-call” for your funeral or cemetery business? This is a common question we have received when having this type of employee on your staff. Curtis Rostad provides his insights to this important question below.
Question: Do I have to pay my employees to be “on call?”
Curtis Rostad: In thirty-four states* most employees, including licensed funeral directors, must be paid hourly with overtime for work over 40 hours per week. That makes the “on-call” question especially important.
The Wage and Hour Division uses two principles in addressing this issue. The first is “engaged to wait.” The employee is not performing duties, but they are unable to use the time effectively for his or her own purpose. For instance, if they must remain in the building to answer the phone or be at home to answer an extension installed there, they must be paid for their time on-call.
But with the advent of cell phones, this is no longer common. Employees have much more freedom while on call. This is referred to as “waiting to be engaged” and they generally don’t need to be paid while on-call. Still, there are four factors to be considered before this determination can be made. How free are they to use the time? Unfortunately, it is not a black and white issue.
- Interruptions: The frequency of the employee being interrupted to answer their phone, especially if they must do some work like return a phone call or give advice, could weigh in favor of them being paid while on-call.
- Time to report: If they are required to immediately respond to a call, that severely limits how they can use the time, and tips the scale towards being paid. In a small town, a 30-minute response time might be reasonable. Maybe not so in a metropolitan area.
- Distance: How far can they travel from the firm and still respond to a call? If that distance is quite limited, it tips towards being paid.
- Limitation on activities: Are they allowed to drink while on call? Is it impractical for them to go to the gym because they would not have time to return home, clean up, change clothes, and get to the firm within the time allowed to report? Do they take first calls directly or answer calls from families so that they are required to avoid noisy locations such as ball games? These types of restrictions on the use of time could tip the scale towards being paid.
If you utilize an answering service and a removal service so that your on-call employees are rarely disturbed other than to be told of the call, you are more likely to have employees who are “waiting to be engaged” and they do not need to be paid for on-call time. If on-call employees are typically interrupted by multiple phone calls per evening and are expected to be back at the firm ready to make a removal within 30 minutes, they are more likely to be considered “engaged to wait” and must be paid. Once an employee does respond to a call, they are working and must be paid their regular or overtime hourly rate.
* Licensed funeral directors are generally allowed to be paid a salary rather than hourly in the following states: IA, ID, MI, MN, MT, ND, NE NJ, NM, NY, OH, PA, RI, SD, WI, WV.
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