Compensability of resident apartment managers' on-call time

STATE OF CALIFORNIA PETE WILSON, Governor

DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
45 Fremont Street, Suite 3220
San Francisco, CA 94105
(415) 975-2060

MILES E. LOCKER, Chief Counsel

December 28, 1998

Laura G. Drenning
Gutierrez & Associates
930 Montgomery Street, Penthouse
San Francisco, CA 94133

Re: Compensability of Resident Apartment Managers' "On-Call Time"

Dear Ms. Drenning:

This is in response to your letter, dated September 2, 1998, to Labor Commissioner Jose Millan,
in which you requested an opinion letter¹ from the Division of Labor Standards Enforcement as
to whether apartment managers who reside on the premises should be compensated for time during
which they are "on-call."

Unfortunately, you failed to state in your letter whether these apartment managers are required
by their employer to reside on the employment premises. This is a critically important question,
as Industrial Welfare Commission ("IWC") Wage Order 5, which governs employers that own or manage
apartment buildings, provides a special definition of "hours worked" for "employees required to
reside on the employment premises." Under this IWC Order, "hours worked" is initially defined in
the same manner as in every other Wage Order, namely, as all "time during which an employee is
subject to the control of an employer, and includes all the time the employee is suffered or
permitted to work, whether or not required to do so," but then provides "and in the case of an
employee required to reside on the employment premises, that time spent carrying out assigned
duties shall be counted as hours worked." (emphasis added.)

In Brewer v. Patel (1993) 20 Cal.App.4th 1017, the court of appeal held that a motel manager who
was required to reside on the motel premises was not entitled to compensation for time during
which he was "not working", despite the fact that this employee was required to remain on the
premises twenty four hours a day. Time during which this motel manager could relax in his
apartment, watch television, or attend to his own personal needs (albeit while confined to the
premises) was therefore found to be non-compensable. This unusually restricted interpretation of
the term "hours worked" is, of course, unique to employees covered by Wage Order 5 (as no other
Order contains similar language) and who are required by their employers to reside on the
employment premises.² An apartment manager who is not required to reside on the employment
premises is not subject to this special definition, even if he or she does, in fact, reside on
those premises as a matter of the employee's own free choice.

With this framework in mind, we turn to the facts presented in your letter. You indicate that your
client employs five types of apartment managers: 1) "weekday managers" who work from 8 AM to 5 PM
from Monday to Friday and are not "on-call"; 2) "weekday managers" who have no assigned shifts and
who are "on-call" from Monday through Friday; 3) "weekday managers" who have no assigned shifts
and who are "on-call" seven days a week; 4) "night managers" who have no assigned shifts but who
are "on-call" from 5 PM to 8 AM seven days a week; and 5) "weekend managers" who have no assigned
shifts but who are "on-call" on weekends. You state that the only time the managers are required
to be on the apartment premises is during assigned shifts (which only appear to be scheduled on
weekdays from 8 AM to 5 PM), and that during these assigned shifts the "weekday manager" may not
engage in personal activities. You also state that managers without assigned shifts, even while
"on-call," are free to engage in personal activities and may leave the premises, and that on
average, each "on-call" manager receives only one call per week.

There seems to be some ambiguity as to what is expected of a manager while "on-call." You state
that while "on-call," the managers must carry beepers and that they "are required to respond to
all beeper calls" by reporting to the premises within twenty minutes from the time the beeper call
is received. However, you state that "no discipline is imposed on a manager for failure to respond
to a beeper call," and that if an apartment manager fails to respond to a beeper call when he or
she is "on-call," the call is routed to the Property Supervisor, who presumably assumes
responsibility for responding to the call.

Under Brewer, apartment managers who are required to reside on the employment premises need not
be compensated for time during which they are free to engage in personal activities, regardless of
any geographic restrictions imposed by the employer on such activities. Applying the analysis of
the Brewer Court, the "weekday managers" must be paid for all hours within their assigned shifts,
as you state they are not free to engage in any personal activities during those shifts. The nine
hour a day, five day a week shift that you describe would entitle these managers to five hours per
week of overtime compensation. Every other apartment manager you describe does not work any
assigned shift, and is always free to engage in personal activities. These "on-call" managers
would only be considered to be working while actually responding to a call, or otherwise
performing an assigned duty involving some physical or mental activity.

Brewer would not apply to any apartment managers who are not required to reside on the employment
premises. Determining whether "on-call" time is compensable, once Brewer is removed from the
picture, is complex and highly fact-driven. The issue of compensability of "on-call" time has been
extensively considered in an opinion letter issued on March 31, 1993 by former Chief Counsel H.
Thomas Cadell, Jr. For your guidance, a copy of that letter is attached hereto. Please note that
Berry v. County of Sonoma, cited in that letter as a district court case, was ultimately reversed
by the Ninth Circuit at 30 F.3d 1174 (1994). Although the Ninth Circuit disagreed with the
district court's decision that county coroners were entitled to compensation for their "on-call"
time, the appellate court applied the very same factors in making this determination as did the
district court. That both courts, in weighing these factors, reached different conclusions
highlights the fact that this is not a bright-line test, but rather a multi-factor balancing test
under which no single factor is dispositive.

This multi-factor test focuses on "whether [an employee] is so restricted during on-call hours as
to be effectively engaged to wait." Berry v. County of Sonoma, supra, 30 F.3d at 1182. Of course,
the simple requirement that the employee wear a beeper and respond to calls, without more, is not
so inherently intrusive as to require a finding that the employee is subject to the employer's
control so as to require the employee be paid for all hours the beeper is worn. "The requisite
degree to which an employee must be free to engage in personal activities does not require that the
employee have substantially the same flexibility or freedom as he would if not on call." Ibid. On
the other hand, restrictions on the employee's personal activities may be so significant as to
require compensation for all on-call hours. The following factors, identified by the Ninth Circuit,
are used by the Division for determining the compensability of on-call time:

1. Whether there are excessive geographic restrictions on the employee's movements,
2. Whether the frequency of calls is unduly restrictive,
3. Whether a fixed time limit for response is unduly restrictive,
4. Whether the on-call employee can easily trade his or her on-call responsibilities with another
   employee, and
5. Whether and to what extent the employee engages in personal activities during on-call
   periods.³

Under California law, these factors must be considered in order to answer the ultimate question --
namely, whether the control that the employer exercises over the employee's on-call time is of the
requisite extent so as to constitute "hours worked" within the meaning of the IWC Order. Applying
this test to the on-call weekday, weekend, and night managers described in your letter (and again,
assuming that they are not required to reside on the employment premises), we note:

1. You do not indicate that these employees are subject to any geographic restrictions. By wearing
   beepers, they are not confined to a home or office location. However, a twenty minute required
   response time obviously would tend to limit the employee's movements to locations within twenty
   minutes of the apartment.

2. The frequency of calls -- an average of one a week per manager -- is not unduly excessive. This
   low frequency would tend to allow employees to engage in personal activities, such as eating
   dinner in a restaurant or attending a movie, without undue concern that the activity will be
   interrupted by a call. However, to the extent that there is no way of anticipating exactly when a
   call will be made, the employee must be prepared to respond to a call throughout the on-call
   period.

3. The twenty minute time limit for a response is quite restrictive, as it would tend to limit the
   employee to a fairly circumscribed geographic area, thereby precluding the employee from engaging
   in personal activities outside that geographic area. This is a critical factor in determining
   compensability. However, there is a world of difference between a required response time, and an
   optional response. A totally optional response would be considered "uncontrolled stand-by time" as
   the employee enjoys complete freedom in deciding whether or not to respond to a call, and thus,
   complete freedom to engage in personal activities. But a required response time implies that an
   employee who fails to respond timely may face discipline. However, you state that "no discipline is
   imposed on a manager for failure to respond to a beeper call." You do not state whether the
   employer has clearly advised the managers that no one will be disciplined for failure to timely
   respond to calls, or whether the employer, while not having imposed discipline, retains the right
   to do so. It is certainly conceivable that the on-call managers, having been told that a twenty
   minute response is required, assume that this requirement may be enforced by discipline, and
   hence, invariably respond as required, thereby obviating the need for the imposition of discipline.
   Under such circumstances, the fact that the employer has not needed to impose discipline to
   enforce its required response time would not convert the on-call time to uncontrolled stand-by
   time. On the other hand, by adopting a policy and unequivocally advising the on-call employees
   that discipline will never be imposed for failing to respond to a call, the employer can establish
   the on-call time as uncontrolled stand-by time.

4. You do not indicate whether the on-call employee can readily trade his or her on-call duties
   with another employee. By allowing such employees to trade duties in advance of a scheduled
   on-call period, the on-call employee can freely engage in unrestricted personal activities without
   the fear of having to respond to a call. The fact that the Property Supervisor is called if an
   on-call manager fails to respond to a beeper call falls short of a system whereby the on-call
   managers can trade on-call duties with another employee before receiving a call.

5. It is somewhat unclear whether, and to what extent, employees engage in personal activities
   during their on-call periods. This is something that is not discussed in your letter, although we
   may infer that the on-call managers do, in fact, engage in those personal activities consistent
   with the inherent restrictions that are imposed by a required twenty minute response time.

As you can see, the absence of certain facts, and particularly, the ambiguity as to whether the
twenty minute response time is truly required (or is understood by the managers to be required),
precludes us from providing you with a yes or no answer to the question of whether your client's
apartment managers must be compensated for their on-call time. Assuming these managers are not
required to reside on the employment premises, the ultimate answer to this question lies in the
application of the test outlined above.

Turning to the one remaining issue presented in your letter, you are correct when you state that
interruptions to sleep (or for that matter, any other personal activity) caused by a call to duty
must be counted as hours worked. However, the requirement that the entire sleeping period be
counted as hours worked if the employee does not get at least five hours of uninterrupted sleep
does not apply to resident apartment managers. Rather, this requirement is intended to benefit
certain types of employees who, while not residing on the employment premises, are required to
work shifts of 24 hours or more, during which time they are provided sleeping facilities. Such
employees covered by IWC Order 5 include ambulance drivers and attendants. See Monzon v. Schaefer
Ambulance Service (1990) 224 Cal.App.3d 16. Please note that non-resident employees who are
required to be on-duty for work shifts of less than 24 hours must be paid for all shift hours, even
if the employee is permitted to sleep or engage in other personal activities when not busy.

Thank you for your interest in California wage and hour law. We hope this letter will help you in
assisting your client. Please feel free to contact this office with any other questions.

Sincerely,

Miles E. Locker
Chief Counsel

cc: Jose Millan
Tom Grogan
Greg Rupp
Nance Steffen
Connie Martens, IWC