Ask The Lawyer By: Daniel A. Gwinn, Esq.-On Call Without Pay?

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QUESTION: I work for a major retailer. My hours change from week to week, which makes it really hard to budget because I have no idea how much I’ll earn; I could work 20 hours, or just 5. On top of this, we are required to be “on-call” a couple of days every month — that is, we are tentatively scheduled to come into work, but don’t find out for sure until two hours before we are scheduled to start. We only receive our schedule, with any on-call days, a week in advance. My son’s soccer team was in a tournament last week. I told my manager I would not be able to work that day, and not to schedule me. He didn’t put me on the official schedule, but he did put me “on-call.” When I complained, he told me to work it out, but if I was called in and didn’t show I would be subject to discipline and could risk termination. I didn’t want to risk it; so I decided to plan on working. Sure enough, two hours before I was scheduled to start, I was told my shift was cancelled. By that time, my son had already got a ride to the tournament with a friend, and it was too late to head out. It seems so unfair to ask people to keep their days open for work, for no compensation. Is this even legal?

ANSWER: According to the Department of Labor and multiple courts, it is perfectly legal. Under the Fair Labor Standards Act (FLSA) an employee who is “on call” while away from work is not working, and does not have to be paid. According to federal rules, whether on-call time is working time “depends on the employee’s ability to use the on-call time for his or her own purposes.” In a blow to workers, the Sixth Circuit ruled in 2015 that guards at Motor City Casino did not have to be compensated for being on-call during lunch, even though they had to remain on the property, monitor two-way radios and respond to emergencies if called to do so.

Although employers are not under any obligation to pay workers who are on-call, a growing body of research suggests they would be wise to offer employees something for being available. When retailer the Gap experimented with eliminating on-call work and requiring schedules to be posted two weeks in advance, it found sales actually increased by 7%, and productivity increased by 5%.

The team behind the Gap study found that last-minute scheduling, unpredictable hours and lean staffing appeal to businesses (especially those in the retail and hospitality sectors) because it allows them to save on labor costs. But, they warned, the savings on payroll often come at the expense of sales and result in increased training costs. Lean staffing can lead to long check-out lines and disgruntled customers who often search all over for someone to help them find an item they need. Unstable scheduling also results in greater staff turnover, and a less dedicated staff (who are less likely to follow rules).

Workers who have unpredictable schedules are also more likely to experience hunger, “residential hardship,” family disruption and — although they may be in great need — less likely to qualify for certain benefits programs. For example, many recipients of aid through Temporary Aid to Needy Families (TANF) are required to work at least 20 hours per week. Workers whose schedules vary may find themselves with too few hours, on average, to qualify. Variable hours may also result in reduced eligibility or participation in programs offering child care subsidies and food (SNAP). And, not surprisingly, unstable scheduling makes it difficult for workers to find a second job to help make ends meet. Scheduling practices that make it difficult for willing workers to earn a living wage can result in taxpayers footing the bill for programs designed to help the needy.

In 2017, Seattle, Washington, passed an ordinance addressing concerns over lean and unstable scheduling. In addition to requiring that work schedules be posted at least 14 days in advance, the law stated that an employee scheduled for an on-call shift, but who was not called in, had to be paid at least half the hours scheduled. A study of the law’s impact revealed that workers’ sense of well-being, and economic security improved, as did sleep quality when they could count on a more stable schedule.

Although stable scheduling has been shown to benefit both workers and employers, businesses still cling to the lean scheduling model without realizing it may be hurting their bottom line.

A bill introduced in the Michigan House last year would require large employers in the retail and hospitality industries to provide schedules two weeks in advance and provide some compensation to on-call hourly workers for being on-call. The bill, HB 5136 2021, was referred to the Committee on Workforce, Trades and Talent. No hearing on the bill has been scheduled by the committee.

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By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
900 Wilshire Drive, Suite 104
Troy, MI 48084
(248) 970-0310
(248) 970-0311 facsimile
[email protected]