Paying for waiting time
25 June 2018
This article was featured in the July - August 2018 issue of the magazine.
Andrew Garboden CPP, director of payroll training for the American Payroll Association, explains when waiting time is and is not compensable
There are two different categories of waiting time: ‘engaged to be waiting’ and ‘waiting to be engaged’.
What is the difference? ‘Engaged to be waiting’ is compensable even though the employee may not be engaged in productive work for our organisation. The key factor is how much control we have over the employee’s time. If the employer restricts an employee’s behaviour and does not allow or permit any personal business to be conducted while waiting, the employee is considered ‘engaged to be waiting’. This time is compensable as it is usually short, spent on the employer’s premises, and insufficient for the employee to use as he or she sees fit. We also must include the hours when determining overtime and the regular rate of pay.
Such time includes waiting for minor repairs, waiting for assignments, or waiting for a customer to arrive. If you have ever put your car through a carwash and waited until it comes out the other end to retrieve it, usually, there is someone at the exit to dry off your car. This person is ‘engaged to be waiting’; he or she is not free to go get lunch, a coffee, or their laundry from the cleaners. He or she must wait for the next car to exit so they can start their productive work. Their time is restricted by the employer and therefore, must be paid.
Conversely, US law – the Fair Labor Standards Act (FLSA)– does not require us to include the time spent when our employees are ‘on call’ if the employee is not physically at the employer’s premises but is asked to stay by the phone and is allowed to conduct personal business. In this situation, the employee is ‘waiting to be engaged’, and this time is not used for overtime calculations.
...key factor is how much control we have over the employee’s time
Here’s another example: An employee who reports to work only to find out the assembly line is down and will be down for some time is relieved from his or her duties and sent home and asked to call back in two hours or report back in three hours. Once the employee is relieved of all duties, whether they choose to stay at the employer’s premises or leave, those hours are not considered compensable.
Nurses are sometimes on-call and unless they are actually called into work, the hours do not need to be considered as compensable. That’s not to say we can’t pay them at some rate, but they are not covered under FLSA rules. Often, nurses will get paid a flat amount or hourly rate lower than the minimum wage for on-call time.
So, do you have to pay for waiting time? It all depends on the scenario.
The American Payroll Association (APA), www.americanpayroll.org, is the nation’s leader in payroll education, publications, and training. This nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 21,000 members, the APA is the industry’s highly respected and collective voice in Washington, D.C. Get more information at www.americanpayroll.org.
The Global Payroll Management Institute (GPMI), www.GPMInstitute.com, spearheads the APA’s global initiatives to provide the world with a leading community of payroll leaders, managers, practitioners, researchers, and technology experts. Subscribers connect with each other through networking discussions, collaborative opportunities, and access to education and publications dedicated to global payroll strategies, knowledge, research, employment, and training. GPMI also publishes several global payroll texts and white papers as a benefit to subscribers. Get more information at www.GPMInstitute.com.