In the Trenches: Acme learns about the emotional cost of overtime

Sept. 5, 2008
Acme learns a lesson about forced labor, its on-call policies and the emotional cost of overtime. Remember, only the names are changed to protect the innocent.

The round-the-clock, full-capacity operation at the local Acme plant employed a full complement of day-shift workers. Weekends and holidays were a different story. Except for those involved directly in production, the facility was decidedly understaffed. The offices were empty, as was the maintenance department. Acme could function this way because it relied on the power of modern communication technology to keep things humming along.

Acme’s HR department always informed potential mechanics and technicians, who were hourly nonexempt employees that, if hired, they be on call for one-week periods in accordance with a rotating schedule established at the beginning of the year. Also, the mechanics and technicians were informed that they were expected to work overtime as required by the production operation.

At 4:30 p.m., the day-shift mechanics and technicians went off duty, perhaps to head home for dinner, run errands or socialize with friends. Whatever they did, however, Acme demanded that the two scheduled on-call mechanics and two instrument technicians carry paging devices and stay within paging range. Should the on-duty production crew be unable to cope with some situation, the on-duty team leader, the person responsible for that shift’s production output and maintenance, paged one of the scheduled off-duty workers. When paged, they were expected to call the on-duty team leader as soon as possible and try to resolve the problem over the phone. Continuous production with minimum fuss, after all, was one key to being competitive in the marketplace, a situation that kept Acme employees on the payroll.

If the on-call worker either didn’t respond or couldn’t be located, the team leader called the backup person listed on the schedule. Failure of a pager-carrying person to respond to the summons could involve disciplinary measures.

The phone calls, generally lasting less than 30 minutes, involved the team leader answering diagnostic questions the mechanic or technician posed in an attempt to make things right again without having to report to the plant. Sometimes, a resolution required several calls to allow the team leader to implement suggested fixes and provide feedback to the off-duty person. If the problem couldn’t be resolved remotely, the mechanic or technician, at the team leader’s discretion, was required to drop what they were doing and return to the plant to get production up and running again.

If called to the plant, the mechanic or technician received a minimum of three hours of overtime pay, no matter how rapidly they resolved the problem. If it took longer, they were paid overtime rates for the interval between punching in and punching out once they resolved the problem.

The ever-present possibility that the phone would ring at an inconvenient time kept the on-call mechanics and technicians edgy. Sometimes, they were paged while at church, while sitting in a night class at the local college, or while taking a sick child to the emergency room. Sometimes the team leader needed to page the mechanic or technician to resolve as many as four separate problems in a given week. That uncertainty induced an underlying stress in the on-call labor pool, and the resulting mental and emotional tension sometimes carried over into their personal lives and affected their domestic tranquility.

The mechanics and technicians acknowledged that the plant had to be kept operational — it was the source of their bread and butter. But, they wanted to be compensated for the disruptive uncertainty that being on call added to their personal and family lives. So, they filed a class-action lawsuit in which they argued that they were technically on duty, at overtime rates, from the moment they answered the first phone call until they hung up from the last call that confirmed the problem was resolved. Also, they demanded overtime rates for any off-hours travel time to and from the plant to resolve the production problem.

How could this situation have been avoided? Should overtime be mandatory? Would it be better to have a voluntary overtime system solely for those who really need the extra cash? Is it fair to impose punitive measures on those who can’t respond to the initial page? Does it make more sense to rework the schedule to have one mechanic and one technician working the second and third shifts on a straight-time basis? Do the employees have the right to complain when they were informed about this job requirement before they were hired?

An academician says:

A couple a weeks ago, I received a call from a veterinarian complaining that he was on call every third weekend for emergencies and thought this was getting to be a bit much. “Am I entitled to overtime pay?” he asked me. No such luck, because he was a salaried employee of the clinic and his contract clearly stated that he would rotate on-call weekends with the other professional staff. That is true of most administrative and professional personnel. For example, in some companies managers fully expect to work weekends, emergencies or no emergencies. And, there is no such thing as overtime pay.

Hourly employees are different because they are covered by the Federal Fair Labor Standards Act. On-call hourly employees (assuming that they have already worked a full shift) usually are entitled to overtime compensation, probably time and a half, but only for the hours that they’re actually working when on call. And travel time to and from work isn’t compensated. So, if I am on call all weekend, but only actually work one hour, I’m only entitled to one hour’s worth of pay, and am not compensated for my time spent going back and forth to the plant.

The exception is when employees’ normal activity is severely restricted while being on call. For example, if the employees are required to be on-site in the evening, or for the weekend, then they obviously can’t do any shopping, or go to church, party at the local bars or even go fishing at the local river. In this example, their activities are severely restricted, and they’re eligible for compensation for all hours for which they are on call, not just those hours that they are performing actual work.

The courts have usually been narrow in deciding what is severely restricted. Wearing a beeper, staying within the local area, calling in to the company periodically, and even being prohibited from drinking alcoholic beverages — none of this is considered as being severely restricted. These employee restrictions have been determined not to be disruptive enough to the employees’ regular lives to warrant compensation for the entire time an employee is on call.

Given what I said above, I don’t think the mechanics have a case here. The whole episode got off on the wrong track. Legal action should be a last resort, because it puts those people who need to work together in an adversarial position, and most legal solutions only partially solve the problem.

Acme needed to sit down with the maintenance group to attempt to work out a solution acceptable to both Acme and the group. What are the group’s major complaints? What does Acme need to do to ensure minimum downtime? Maybe even make the maintenance group responsible for coming up with a solution — management doesn’t have to solve every problem in the plant. Making on call work voluntary certainly should be explored. Some employees would probably like the opportunity to pick up some overtime pay, particularly because it seems to be a minimum disruption to their normal activities. Trading off weeks or days is another idea. The minimum of three hours of overtime pay guaranteed seems fair for people who must go to the facility (I’ve seen figures between two hours and four hours), but what is the compensation for a “call in?” It’s not clear, and that might be a sticking point. Maybe the solution is to have someone on call full-time on each shift - that is something that they would have to cost out. The point is that they need someone with some facilitation skills, and a group with open minds and some reasonable creative juices, and this legal action could have been avoided.

Professor Homer H. Johnson, Ph.D.
Loyola University Chicago
(312) 915-6682
[email protected]

An attorney says:

As non-exempt employees, when the technicians and mechanics are off-duty and required to perform services by speaking with their colleagues over the phone, they’re working and must be paid overtime.

A slightly more difficult question is whether they must be paid overtime between phone calls from the plant. The answer depends on whether they are “engaged to be waiting” or “waiting to be engaged,” in the parlance of wage-hour law. If the employee speaks with a fellow employee at the plant who says he’ll try to fix the problem in accordance with the off-duty worker’s suggestion and is told to expect another call to discuss the results, the off-duty employee likely is engaged to be waiting. As a result, the time when he or she (after all, Acme is an equal opportunity employer, isn’t it?) waits for a return call from the plant also constitutes working time.

On the other hand, if the off-duty worker answers a question by phone and no immediate follow-up is required, the ensuing time is not working time and need not be paid. In this situation, the employee is waiting to be engaged and is free to pursue other interests, even if an unexpected return phone call occurs.

By far the most difficult question is whether the employee is working and must be paid for all of the time he carries a pager. This is called “on-call” time, and the answer depends on a host of factors, most of which focus on how free the worker is to use the time for his or her own pursuits. One key issue is how quickly the employee must be able to return to the plant. In a large city, where travel time is lengthier, an employee who must be able to report to the plant in 15 minutes might be quite restricted in her activities. A travel time that short would require the worker to remain very close to the plant and preclude her from playing an outlying golf course or visiting a parent in a suburban location. An employee in a rural area who must return to the plant in an hour, conversely, might be free to travel 50 miles from the plant.

How often the employee is interrupted in the use of his time while on call is another critical factor. If the employee is interrupted so often that he can’t attend church or take an adult education class, it’s more likely that the time spent carrying a pager is working time for which the employee must be compensated.

On a final note, both employer and employee fare better when overtime is voluntary. But this isn’t always possible. Sometimes only workers with particular skills are needed for overtime hours, and in other cases, not enough employees volunteer. An alternative is to allow employees to trade overtime responsibilities, provided the substitute employee possesses the qualifications to do the work.

Julie Badel, partner
Epstein Becker & Green, P.C.
(312) 499-1418
[email protected]

A corporate consultant says:

The problem for Acme is the class-action lawsuit. I approached the situation by asking “why” five times. Why was there a class-action lawsuit filed? The workforce felt they were being undercompensated. Why did they feel undercompensated? Because pager duty restricted their off-duty activities and caused problems at home. Why did pager duty restrict their off-duty activities and cause problems at home? Because they had to remain in pager and call-in response range, not knowing how much or when they might be required to respond. Why did they have to remain in pager and call-in response range, and not know how much or when they might be required to respond? Because the second and third shifts were understaffed for how the plant was operating. Why were the second and third shifts understaffed for how it was operating? Because the plant’s reliability was inadequate.

By focusing on the fourth and fifth “whys,” Acme could have addressed the issue in at least two ways. It could have considered alternative staffing solutions and it could have taken actions to increase the effective labor and improve overall plant reliability.

Engaging the workforce might have led to a change in the number of people on the day shift; one or more people might end up working second or third shift. If the plant is running 24/7 at full capacity, it might be better to support production around the clock; equipment failures don’t punch a time clock. Perhaps they could have had one or two people on third shift, and have people on call only on second shift. You get the idea. The most important part of this solution is engaging the people who will be living with the policy. If they participate in making the policy, then they will be more accepting of it.

The bottom line is to improve system reliability to reduce or eliminate the frequency of paging folks who are off the clock.

As for punitive measures for failing to respond to pages, yes, it’s appropriate; responding is a condition of employment. In most cases, the on-call person has the pager and a cell phone. The company should have a reasonable expectation of getting the on-call person when he or she is needed. I’ve been in that situation. When there’s a need for on-call persons to be undisturbed, they should be able to notify both the plant and ask a substitute on-call person to take the lead for a period of time. Just be consistent in how it is applied.

On the issue of whether an employee has the right to complain, I say they sure do. Keep in mind that the policy might have been put into place years before, when the plant was younger, and the production schedule might have been only one shift. Things change and employees should be heard if or when circumstances make the situation worse. However, the right to complain doesn’t imply the complaint will be resolved to anyone’s complete satisfaction. If the final result doesn’t provide sufficient relief, the employee can choose to find other employment.

Tom Moriarty, P.E., CMRP
Organizational Reliability Professional Services Consultant
(321) 773-3356
[email protected]

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