On-Call Pay
On-call pay explained: when federal law makes on-call time paid work, how call-back pay differs, how it affects overtime, and what agencies should bill.September 25, 2026
5 min read
Payroll
Written by the NextCrew team
Definition
On-call pay is what an employer pays for time an employee spends available to work if needed, outside their scheduled shift. Under federal law, on-call time must be paid as work time when the employee is so restricted they cannot use it for their own purposes; otherwise, paying for it is a policy choice.
The legal question behind on-call pay is simple to ask and hard to answer: whose time is it? If the Crew Member is waiting at the site, or has to respond so fast they cannot really do anything else, the time is the employer's and it is paid. If they are at home living their life and just need to answer the phone, it usually is not hours worked, though many employers pay a flat on-call rate anyway.
Do you have to pay employees for on-call time?
Under the FLSA, you must pay for on-call time when the employee is required to stay at or near the workplace, or is restricted enough that they cannot use the time effectively for their own purposes. The Department of Labor's rule (29 CFR 785.17) draws the line: on call at the employer's premises is working; merely leaving word where you can be reached is not. Courts look at the facts, and the usual shorthand is "engaged to wait" (paid) versus "waiting to be engaged" (not paid).
| Factor | Points toward paid work time | Points toward unpaid on-call time |
|---|---|---|
| Where they wait | At or near the site | At home or anywhere |
| Response time required | Minutes | Reasonable, an hour or more |
| How often they are called | Frequently | Rarely |
| Personal activities | Cannot really do them | Can sleep, run errands, see family |
| Other limits | Uniform on, no travel, no alcohol | Few restrictions beyond answering |
No single factor decides it. State law can be stricter than federal law, and California in particular treats more on-call arrangements as paid time.
What is the difference between on-call pay and call-back pay?
On-call pay covers the waiting; call-back pay covers being called in. Call-back pay is usually a guaranteed minimum, such as a set number of hours, paid when an off-duty employee is called back to work. The time they then spend working is hours worked in any case. How each is treated in the regular rate for overtime depends on how the pay is structured; the Department of Labor's regular-rate rules (29 CFR part 778) cover both.
Does on-call pay count toward overtime?
On-call time that counts as hours worked counts toward overtime. Flat on-call payments for unrestricted time are generally included in the regular rate used to calculate overtime, which can raise the overtime rate for that week. Get this wrong and the underpayment shows up on every overtime hour, not just the on-call ones.
Why does on-call pay matter for staffing agencies?
- Healthcare runs on it. Surgical, procedural and home-health roles often carry on-call schedules set by the facility.
- The client sets the restrictions; the agency owes the pay. A facility that requires a 15-minute response time may be creating paid time the agency, as employer of record, must pay.
- It has to be billed. Agree on-call and call-back bill rates in the contract, or the agency pays for availability it never invoices.
How do agencies set up on-call pay correctly?
- 1Ask the client for the rules
Response time, where to wait, how often calls happen.
- 2Decide paid or unpaid with the facts
If the restrictions make it work time, pay it as hours worked.
- 3Set rates for both sides
An on-call rate, a call-back minimum and the bill rates that match them.
- 4Keep records of calls
When the call came, when they arrived, how long they worked.
- 5Check the overtime math
Include on-call payments in the regular rate where required.
Bottom line: on-call pay depends on how restricted the waiting is. If the client's rules take the Crew Member's time, it is paid time, and the contract should say what the client is billed for it.
How NextCrew handles on-call and call-back time
- Pay codes for each pay type. Pay codes carry their own bill rates, overtime rules and reporting behavior, so on-call and call-back pay can be recorded and billed as their own lines.
- Overtime by jurisdiction. Overtime is calculated automatically based on the agency's jurisdiction and overtime policy configuration.
- Call-ins that reach people. Notify Now sends a job immediately by email, SMS and push instead of waiting for the evening batch.
- A record of the call. Clock-in captures the time, GPS location and photo, so when a called-in Crew Member arrived is on record.
See staffing payroll software and healthcare staffing software.
Frequently asked questions
Related terms
- Double time pay: twice the regular rate for certain overtime hours.
- Reporting time pay: pay owed when a scheduled shift is cut short.
- Shift differential: extra pay for certain shifts.
- Bill rate: where on-call and call-back rates need a match.
- Staffing agreement: where on-call billing terms belong.
General information, not legal advice. On-call rules depend on the facts and on state law.