Written by William A. Earnhart

As working remotely has grown exponentially since the start of the COVID-19 crisis, more and more employees are questioning where work ends and their own time begins.  Birch Horton attorneys William Earnhart and Matt Widmer recently received a decision in Federal District Court and upheld by the Ninth Circuit that gives employers some additional guidance regarding that question.

Wage and hour law is based on the premise that employees are paid for the time they are at work and are not paid when not working. However, when the line between work and home is not clear, on-call employees often feel they should be compensated for the interruption into their personal time when that interruption benefits their employer.

Traditionally, the question of whether on-call time must be paid was a question of whether the employee was “engaged to wait” or “waiting to be engaged.”  If an employee is able to use the on-call time for his/her own purposes, the employer was not required to pay him for that time.  But what about the employee that is required to carry a cell phone and work remotely if called? Courts in the Ninth Circuit make this distinction by applying a seven-part test, referred to as the Owens factors.  Although Owens was decided in 1992, just prior to widespread cell phone use, it summarized years of precedent going back to the 1940s, and did not anticipate employees being in contact with customers all hours of the day in almost any location.

In our case, the District Court applied the Owens factors and found that being required to stay within cell phone range and answer the phone if called was not enough to establish that the employee was required under the FLSA to be paid for the time not answering the phone. The Owens factors are very fact specific with “no one factor controlling.” The key factors in this case where: the employee was able to travel anywhere within cell phone coverage; arrange for others to take the phone if he planned a vacation or otherwise needed to be unavailable;  and, although the employee disputed this fact, the calls were not so frequent as to severely limit his ability to use his time as his own. At the appellate level, the former employee added a twist emphasizing the argument that because his job was as a dispatcher, his time carrying, but not actually answering, the phone for after-hours dispatching was simply a continuation of his job duties. The appellate court did not accept that argument.

An additional factor in any wage claim is an agreement of the parties.  An employer cannot contract out of the FLSA minimum wage and overtime requirements; however, the reasonable expectations of the parties may establish an agreement to pay beyond the legal minimum. In this case, the employee signed a memorandum confirming he would be paid two hours overtime each day he was required to carry the after-hours phone, and that he was required to record all time spent on the phone that exceeded the two-hour minimum.

When an employee is required to carry and answer a cell phone after ordinary work hours, an employer should carefully analyze the employee’s job description and expectations (preferably with legal assistance) and have an “on call” or “after hours” policy signed by the employee that clearly identifies expectations and requirements during that time period. An employer should also require and enforce a policy of tracking all time worked. This is required by law, but often ignored or rarely enforced.  Accurate time cards are often the best source of evidence to dispute a claim for overtime.