Ward v. Tilly's Inc: How Can Employers Avoid "On-Call" Penalties?

Rahkeem Morris
March 28, 2019

In California’s Court of Appeal, a recent decision (Ward v. Tilly’s, Inc.) is sending shockwaves through industries that employ hourly workers as “on-call” workers.

The lessons from this case are useful even outside California, as other states and cities consider “on-call” legislation to protect hourly workers.

Here’s what you need to know about Ward v. Tilly’s and on-call shifts:

What kind of on-call shift does this apply to?

When employees are required to report for work as “on call” workers - which means they show up to work to see if they’re needed - they are entitled to reporting time pay whether or not they’re needed. In California, reporting time pay is two hours’ wages.

In the recent Ward v. Tilly’s decision, the court decided that even if employees don’t physically have to report to work - that is, if employees are required to call their workplace a few hours before their “on call” shift to see if they’re needed - this still counts as reporting for work. And if the employee isn’t needed, he’s still entitled to two hours of on-call pay.

Said more simply: If employees are required to call to see if they’re needed to come to work, they’re owed two hours of wages whether or not they work.

What’s the rationale for this ruling?

Speaking with California employers, we’ve heard groans about how this is unfair: On-call legislation is supposed to prevent employees from reporting to work, and you’re not officially reporting to work if you’re calling from home!

From the employee side, however, the argument makes more sense. “On-call” employees who are required to be available but aren’t necessarily needed - whether or not they report to work - make sacrifices: They forego picking up shifts at other jobs because they’re required to be available for their “on-call” shift. And they may incur costs - like paying for childcare, which needs to be scheduled more than a few hours in advance of a shift.

The problem arises when employees are required to be available. Whether or not they physically show up to work - the court’s majority opinion argues - employees must clear their schedules, incurring costs and missing out on other income sources.

And this means there are two potential solutions.

How should I change my on-call program to avoid this penalty?

We recommend two options to change your on-call program, depending on your workplace.

Option 1: Make your on-call program voluntary

Instead of requiring on-call employees to work if they’re needed, employers may utilize on-call programs that offer shifts to your on-call employee list. They’re not required to work if they’re not available - which means they’re not entitled to reporting pay.

This is preferred by employees, who likely have multiple part-time jobs and whose goal is to maximize their income: They don’t have to decline shifts at their other jobs or hire childcare because they’re required to be available. However, if they happen to be available, they can pick up a shift when it’s offered.

The consequence for your business is that you’ll likely need to increase your on-call “employee bench.” The logic here is simple: If your employees are able to decline shifts, you need a bigger pool to contact.

Employers may grumble that it’s already a tight labor market, especially for on-call work. But that’s precisely because so many would-be employees are averse to how today’s on-call work limits their ability to earn income by restricting their availability. We’ve worked with employers who use a voluntary bench for on-call shifts, and they have hundreds of employees signed up on their list - even in today’s difficult labor market.

For larger, multi-location businesses, your voluntary on-call bench can be a centralized pool that all your locations can access. This is much easier to manage - and leads to better results - than having each location’s supervisor manage an on-call bench on his or her own, and ensures consistent policies are followed.

Option 2: Make your on-call program guarantee work

The other option is to guarantee work for your “on-call” employees. We’ve spoken with a few employers who use their “on-call” system as guaranteed work, with the key variable being the location at which the on-call workers are needed.

Of course, here employers still run into a problem: What if they need more - or fewer - employees than are on their guaranteed on-call list? And what is the optimal size of the guaranteed on-call bench to minimize overstaffing when labor costs are already high?

For this reason, we find most employers pursue Option 1.

What technologies can help me make this change to my on-call program?

SYRG was designed to manage voluntary on-call pools of workers. Instead of managers making phone call after phone call trying to fill an open shift, SYRG automatically contacts your list of qualified employees. We also offer professional services that help you build a bench of voluntary on-call workers - which is especially useful for businesses that are new to the on-call world and need an extra bit of help and expertise in setting up their system for success!

Contact us at info@syrg.app if you’d like to discuss your on-call program.

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