How to pay techs for on-call time

The three pieces of on-call pay

On-call pay in a trade shop is usually built from up to three parts. You can use one, two or all three, but write down which.

Many shops add a commission or spiff on after-hours tickets, since the shop charges more for them. If you do, put it in the same written policy as the rest. How to pay technician commissions covers how to set that up.

What the US Department of Labor says about on-call time

For employees covered by the federal Fair Labor Standards Act, the Department of Labor's Fact Sheet #22 on hours worked draws the main line. It says an employee who is required to remain on call on the employer's premises is working while on call. An employee who may stay at home, or leave word where they can be reached, is in most cases not working while on call. It also says additional constraints on the employee's freedom could require that time to be paid.

In shop terms, that means the details of your rules matter. A tech who must answer within a set number of minutes, stay within a short drive, stay sober and keep the truck ready is more restricted than one who is just reachable. The more you restrict their evening, the closer standby time gets to work time. Talk to an employment attorney or your payroll provider about your exact rules.

The same fact sheet says time spent traveling as part of an employee's principal activity is work time, while ordinary travel from home to the regular workplace is not. It does not address emergency calls outside regular hours directly, so get a professional answer on how your shop counts the drive to a night call. It also says work that is not requested but is suffered or permitted is work time that must be paid. A tech who takes a call and fixes it over the phone at 10 p.m. has worked.

Watch overtime

On-call weeks are the weeks a tech is most likely to go over 40 hours. The Department of Labor's Fact Sheet #23 on overtime says covered employees must be paid for hours worked over 40 in a workweek at not less than time and one-half their regular rate of pay. It also says the regular rate includes all pay for employment except certain payments the law excludes. So ask your payroll provider whether your standby and call-out pay belong in the regular rate, because that changes the overtime rate.

These are federal rules. Your state may set its own overtime rules too, so check your state labor department. This article is not legal advice.

Worked examples

Example 1, a quiet week. Say Sam Rivera earns $35 an hour, works 40 day hours, and is on call for the week with $150 standby pay. No calls come in. Sam is paid 40 x $35 = $1,400 plus $150 standby = $1,550. Ask your payroll provider how the $150 is treated.

Example 2, one short call. Same week, but Ava Reyes calls Tuesday at 9 p.m. with a running toilet that will not shut off. Sam is out for 45 minutes. Your policy has a 2-hour call-out minimum, so Sam is paid for 2 hours on that call. Those hours, and any minimum on top of real time, need to be handled correctly for overtime; your payroll provider can tell you how a guaranteed minimum is counted.

Example 3, over 40. Sam works 40 day hours and then 3 hours on a Saturday night burst pipe. Those are hours 41 to 43, so under the federal rule they must be paid at no less than one and a half times Sam's regular rate. At a $35 base that is at least $52.50 an hour, and more if the regular rate includes the standby pay or other pay. A shop that pays only a flat call-out fee for those 3 hours may be underpaying.

Write the policy down

One page, signed by every tech who takes calls. It should cover:

1. The rotation and how swaps are approved. See how to set up an on-call rotation.
2. What the tech must do while on call: answer within how long, stay within what distance, keep what stock.
3. Standby pay: how much, per night or per week, and when it is paid.
4. Call-out pay: the rate, when the clock starts and stops, and any minimum.
5. Holiday on-call pay.
6. Any commission or spiff on after-hours tickets.
7. How on-call time is logged, and who checks it.
8. What happens when the tech misses a call.

Review it once a year, and any time your after-hours prices change. The shop should be charging enough at night to pay the tech well for going out.

Mistakes to avoid

• No standby pay at all. Techs feel the rotation is free labor, and they stop answering.
• Paying call-outs off the books. Cash for night calls skips overtime and payroll tax.
• Not logging phone fixes. A 20-minute call talking a customer through a shutoff is time worked.
• Guessing on the regular rate. Get your payroll provider to set it up once, correctly.
• Different deals for different techs. Write one policy and apply it to everyone.

How SWITCHBOARD tracks on-call pay

In SWITCHBOARD, on-call dispatch can log on-call pay and the call-out premium to timesheets, and the tech's time is clocked from the job in the tech app, so night hours sit on the same week as day hours. Payroll applies state overtime rules and hands off to QuickBooks or a Gusto, ADP or Paychex file, and techs can see their own hours and pay.

Sources

• Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA) (checked November 13, 2026)
• Fact Sheet #23: Overtime Pay Requirements of the FLSA (checked November 13, 2026)