Callback pay applies when employees are “called back” to perform work beyond regularly scheduled hours. The Fair Labor Standards Act (FLSA) does not guarantee employees a minimum number of hours of work when they are called back. However, FLSA guidelines require that the hours they do work must be paid for at the employees' base rate or at the applicable overtime rate.

Employers should note that in the case of an emergency, if an employee is called back to work beyond his or her usual working hours and must travel a “substantial distance,” the employer may be required to pay for the employee's travel time as well as the additional hours worked.

Report-in pay applies when employees report to work at the normal starting hour but are unable to work because of some unusual condition at the place of employment. No federal law requires employers to pay employees in this situation. For example, an employee of a homebuilding company arrives for work at 8:00 a.m. for his or her shift. The employer tells him or her that he or she will not be working that day because it is too cold. The employee is sent home. Since the employee did not perform any work, the FLSA would not require the employer to consider any of the time as hours worked or to give the employee show-up pay.

This rule is not limited to situations that are designated report-in time by an employment agreement. It applies to any situation where the employee performs work outside his regular working hours, is guaranteed pay for a minimum number of hours, and does not work the number of hours covered by the guarantee.

The courts have drawn a distinction between an employer engaging an employee to wait and an employee waiting to engage in work (Skidmore v. Swift & Co., 323 U.S. 134 (1944)). If an employer requires an employee to report to work and then wait for a certain length of time before the employer releases the employee because there is no work available, the employer may be required to pay the employee for that time.

Many states have laws that set minimum pay requirements when employees report in or are called back to work.

Wages paid by employer for on-call time must be included in calculations of hours worked for purposes of calculating overtime.

Example: If an employee works 38 hours and is on call for 7 additional hours, the last 5 hours are subject to pay at the overtime rate.

If an employee is paid a premium rate for the time he or she is called back to work, according to a U.S. Department of Labor Opinion Letter, the employer does not need to include the premium part of the pay that is higher than the normal pay rate when calculating the regular rate of pay for paying the employee overtime--as long as the premium pay is provided on an infrequent basis for failing to give employees sufficient notice to report for work outside of their regular working hours.

In addition, if an employee is paid a premium rate for callback time, according to the U.S. Department of Labor Opinion Letter, the extra compensation may not be credited toward the employer’s overtime obligation under the Fair Labor Standards Act (FLSA). However, the regular compensation provided for the callback hours worked may be counted toward the minimum wage obligation under the FLSA.

Straight time pay provisions in a callback agreement. Many callback pay agreements provide that where an employee is called back to work during overtime hours he will receive 1 ¹/₂ times or some greater multiple of the regular rate for the hours actually worked or a specified minimum number of hours straight time pay, whichever is greater. Since in these situations a provision is made for the payment of not less than the legal overtime rate, that portion of the payment that is equal to the overtime compensation due for the overtime hours actually worked may be credited as a true overtime premium in computing overtime compensation, despite the fact that under the employment agreement the employee receives “straight time pay.”

Although not always required to by law, many employers have policies that guarantee a certain minimum number of hours of work or pay for callback and report-in situations. When drafting these policies, employers should keep these points in mind:

Scope of the report and callback pay rule. The report and callback pay rule is not restricted to situations designated as such by the employment agreement. It may be applied to any situation where the employee performs work outside regular working hours, is guaranteed a minimum number of hours, and does not work the number of hours covered by the guarantee.

Rest period payments may be treated as callback payments. Premium payments made solely because the employee has been called back to work before the expiration of a rest period between shifts may be treated as callback payments and may be excluded from the regular rate of pay. However, since these payments are not for overtime but are made solely because of the interruption of a rest period, they may not be offset against statutory overtime.