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hour of service for on-call time

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5 replies to this topic

#1 kurt johansen

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Posted 14 June 2000 - 10:26 AM

hospital wants to know if it must give hours of service credit for on-call time. I could find no guidance in the regs or otherwise. The Wage and Hour Division deals with on-call time to determine whether it is subject to the minimum wage and overtime rules. Basically, those rules say that on-call is compensable if the employee is "engaged to wait" rather than "waiting to be engaged". In my case, the nurses and doctors are being compensated for their on-call time but may not receive enough calls to be considered engaged to wait. If these hours have to be treated as "hours of service" for pension plan purposes, there will probably be a lot of part-timers let into the plan due to on-call time. Has anyone dealt with this issue?


#2 TrustMe401k


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Posted 15 June 2000 - 02:53 PM

I also ran into this with a hospital's 403b plan. The document stated that an hour of service would be credited for "each hour for which the employee was compensated or should have been compensated"(or something close to that wording) We came to the conclusion that these hours must be included. (Not a popular decision with the hopsital I might add)
Hope this helps.

#3 kurt johansen

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Posted 15 June 2000 - 03:43 PM

thanks for the response jehmig. We came to the same conclusion. There is a PLR that interprets 2530.300b-2(a)(2) regarding hours of service for compensated time where no duties are performed. The reg. states that hours of service must be credited for compensation paid for periods where no duties are performed but payments are made due to vacation, holiday, illness, incapacity, layoff, jury duty, military duty, or leave of absence. PLR 8031091 states that the list is not exclusive, and that any payment made on account of the employement relationship must have hours credited even if no duties are performed. Based on this interpretation, it seems to follow that on-call hours that are compensated must be credited as hours of service.

As you said, not a popular answer as far as the client is concerned. I would also argue that it is an unfair result as it will lead to many part-time employees being included in the plan even though they don't work very many hours. Thus, I am wondering if anyone has taken the opposite position.


#4 Tim Howard

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Posted 15 June 2000 - 05:43 PM

I ran into this a few years back, and we came to the same conclusion that these folks "on-call" hours must be considered for eligibility and vesting purposes. This was what was suggested when it was unofficially
posed to the DOL.

In this case, the plan benefits were based on base compensation, or a minimum amount per ee per year of service (prorated for partial years <1800 hours in a plan year). An ee with only 1,000 hours got 10/18 of a year of service. In any event, it was a pain but we let them in and they don't accrue that much - in this groups' case the additional plan expense was very minimal. On the other hand, it was a pain to gather accurate data.

Does your group have really have a lot of part-timers that will be in the plan because of this?

Is this a DB plan or 403(B)?

#5 kurt johansen

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Posted 15 June 2000 - 06:48 PM

thanks for your post Tim. Its a defined benefit plan. I'm not sure what kind of effect the inclusion will have on the plan. One concern I do have is that they may have excluded employees in the past that should have been included. That will mean going back and collecting a lot of data that may or may not be available. I am told that they have a resource center of nurses who only work on-call. Fortunately, the plan excludes those employees based on a nondiscriminatory classification basis.


#6 Nabiyah1


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Posted 22 June 2001 - 11:03 PM


Just an FYI, However, you may already be aware. I'm not suggesting that you go digging and open up a can of worms but you have to be careful with the part-time, on-call, and seasonal issue. As you know the exclusion of "classes" based on service is a direct violation of the minimum age and service rules. I have noticed that a lot of hospitals are having this problem. Also you want to be conizant of the Erisa Code that defines a "disguised service condition" with relevance to part-time and, or seasonal workers. The code also makes reference to the plan loosing their qualified status, if found in violation of this rule, or in the case of a 403(B), it would be subject to loosing their not-for-profit status.

I ran into this problem not too long ago and we are still reviewing it. Our position at this point is the Fiduciary is ultimately responsible and they must tell us, as administers of the plan, how they wish to proceed because we cannot offer legal advice. However, information was sent advising, since there is so little guidance on valid class definition, classification is subjective, and because the area is so gray, we recommend they seek legal council. The DOL really tends to frown on these types of violations.

Just a thought.. Thanks