If you run a locksmith, plumbing or other business that needs employees available on a standby basis after hours, the federal government has some rules for you. The Fair Labor Standards Act (FLSA) may require you to pay employees for time spent on call — even if no calls actually come in. If you do have to pay for this time, and it adds up to more than 40 hours a week (either alone or combined with regular working hours) you'll have to pay overtime, or time-and-a-half.

Generally, you'll have to compensate employees for time spent on stand-by if their personal activities are restricted during that time; for instance, if they must be on the premises while on call, or must continually monitor their computer messages. To set a policy for on-call hours, ask yourself these questions:

1. Do you need staff available 24 hours a day?
2. Are employees covered by FLSA or a comparable state law?
3. While on call, will their personal activities be restricted?

Action Steps
The best contacts and resources to help you get it done

Determine which employees are covered

The federal FLSA only applies to employees classified as 'covered' and 'non-exempt.' Generally, the FLSA covers employees of businesses that offer services or produce goods that affect interstate commerce, but courts have interpreted this category very broadly. Even if an employee is covered, he is exempt from FLSA if he holds an executive position or fits into another exception to the statute.

I recommend: The Department of Labor (DOL) publishes extensive guidelines detailing FLSA rules.

Clearly define when employees are on duty

If employees actually work while on call, you'll have to pay them for the hours worked. Additionally, if you require them to remain at your place of business while on call, you'll likely have to pay them. Even if employees can remain off premises, you still may have to pay them if their freedom is significantly restricted. For instance, one court recently found that employees who were required to check their computers every 15 minutes while on call had to be compensated because they couldn't realistically leave their homes. Generally, whether you'll have to pay depends on all of the circumstances.

I recommend: This Personnel Policy Services article provides a comprehensive list of factors used to determine whether employers must compensate staff for standing by. The DOL also publishes information about how to calculate hours worked under the FLSA. The Web site Nolo offers advice about on-call regulations.

Seek legal advice

Navigating the FLSA often requires expert advice. Additionally, your state might impose more stringent requirements than the federal government.

I recommend: Online directories Lawyers.com and FindLaw list attorneys by geographic location and practice area.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you need workers to be available on call, allow them to remain at home if at all possible
• •  If you ask workers on call to remain in one location, wear a uniform, or check-in frequently, you might need to compensate them for those hours.
• •  If workers are entitled to compensation for on-call time, you'll also have to pay them time-and-a-half their normal hourly wage if the on-call hours combined with regular hours exceeds 40 hours per week.