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Boon or Time-Bomb: Is On-Call Scheduling Worth the Risk?

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By Casey C. Sullivan, Esq. on June 04, 2015 2:05 PM

On-call scheduling has become increasingly common among large employers, especially in the retail industry. Under an on-call scheduling system, employees set aside work hours and check in before their schedule to make sure they're needed. It allows employers greater flexibility in scheduling, but can leave workers with unpredictable schedules and incomes.

GC's who've given the practice a green light might want to start rethinking things. On-call scheduling could soon become more of a liability than a benefit. An investigation in New York and a class action in California both threaten to hit companies that use on-call scheduling with millions of dollars in backpay and other fines.

Good For Companies, At Least for Now

There are some clear benefits. First, a more fluid labor force allows managers to bring in extra hands as needed and let them go when they're not. For businesses with unpredictable workflows, on-call scheduling can help companies save a fair amount on wages that would otherwise be spent keeping unneeded workers around. The savings can be even greater when optimized by scheduling technology, which is able to analyze a business's needs and shift schedules in real time.

For workers, the drawbacks are obvious. Being on-call often means that one can't schedule other work for that period, can't provide reliable child care, can't do much that would require a firm commitment. Should a worker get notified that they're not needed, often with just a few hours notice, it's too late to make alternative arrangements. Workers have set aside the time, but gotten no pay. Unpredictable hours and unpredictable pay also make it more difficult to rely on a consistent income.

Regulators, and Employment Lawyers, Take Note

Following an expose on the practice by The New York Times in August of last year, regulators have started to put increased scrutiny on employers using on-call scheduling. New York Attorney General Eric Schneiderman opened investigations into 13 large retailers last month, demanding that they provide information on their scheduling practices. In New York, the law requires that employers to give workers who report for scheduled shifts at least four hours worth of pay, even if that shift ends up being cancelled.

Similarly, employees have sued Victoria's Secret in California, alleging that the retailer's on-call scheduling violates labor laws. The class action alleges wage theft and seeks $37 million in backpay. Like New York, California law requires companies to pay employees who report for work but have their shifts cancelled.

If You're On-Call, Have You Reported for Work?

The question is, does staying on-call count as reporting for work under those laws? Right now, it's a legal gray area, with Victoria's Secret arguing that the law requires an employee to be physically present. A district court agreed, ruling that the class action couldn't go forward under the law. But that might not be the last word. The decision is currently being appealed to the Ninth Circuit and the district court noted that there was not "a single on-point case addressing a claim similar" to the class action.

Should the Ninth Circuit decide that staying on-call counts as reporting for work, that could leave many employers owing millions in backpay. Not only would the lost hours from cancelled ships need to be accounted for, but employees could be entitled to double backpay and other damages.

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