On-call compensation in IT

Daniel Weiß
October 31, 2022
Table of Contents:

What counts as on-call?

On-call is a special working hour arrangement under employment law. It comes into effect when the employee is obliged to be contactable at least by phone, so they can start work in an emergency. On-call duty is generally counted as time specifically meant for work purposes. In practice, this means that employees are normally not allowed to work while on-call. However, there may be exceptions. For example, on-call employees may also work from home if they can be reached through their work device.

What is the difference between on-call and stand-by service?

There is an important distinction between on-call and stand-by service. The difference between the two is a matter of time. For on-call, employees can be reached by phone at any time to take on tasks. Stand-by, on the other hand, means that these employees must actually be present in the office, and are not only reachable by phone.

In IT, on-call service is often preferable. The reason for this is that many tasks can also be performed remotely, and employees therefore do not necessarily have to be physically present. However, there are also areas in IT where stand-by service is required. This is the case, for example, when server systems have to be monitored and supported. In this case, the employee has to be present to attend to any issues immediately. This is essential in order to comply with often strict service level agreements.

Are on-call hours the same as work hours?

Whether on-call and work hours are equivalent is not as trivial as it may seem. In principle, on-call time is considered time off (according to Occupational Safety and Health), as long as employees are not called to work. This means they are not considered working hours. On the other hand, on-call hours become working hours when an incident needs attending to. There are special cases where only a court can decide which are on-call and working hours. Therefore, the definition of on-call time and work time is not entirely clear. Especially in company practice, there are often different possibilities.

There is also no generally applicable regulation for the compensation of on-call duty. In many cases, on-call duty is regarded as working time and is paid for accordingly. However, there are also companies that do not consider on-call time to be working time - so it is not paid. In these cases, you must be aware that you will not receive any remuneration for the time you are required to be on-call.

On-call is therefore not always the same as working time, as it depends on the company's approach. For example, on-call time is not compensated at some American big tech companies (Airbnb, Apple, Netflix, etc.). In many cases, however, on-call time is considered working time and paid accordingly. So be sure to find out in advance exactly what the rules are in your company.

On-call duty times

Generally, on-call duties are only required for certain times of the month. These times are agreed upon in advance with the employee and included in the employment contract. On-call hours are naturally often necessary at night or on weekends, as fewer people are in the office during these times.

The German Information and Communications Technology trade group (link in German) suggests that on-call duty should be limited to a maximum of 56 days per year, with a rest period of 8 uninterrupted hours. Since on-call duty is generally treated as non-working hours, the general rule from the Working Hours Act (§5 Par.1 ArbZG) of 11 hours between the end of one working day and the start of the next does not apply.

How is payment settled for on-call service in IT companies?

In IT companies, on-call hours are usually considered working time and are paid as such. As mentioned above, be sure to clarify this with your employer in advance to check what is stated in your contract.

For large corporations like Airbnb or Apple, which do not pay for on-call time, the argument is that their employees are already among the top earners. This means that their employees still earn much more than they would at most companies that pay on-call time in addition to their salary.

In Germany there is no specific law regarding how on-call hours should be paid. This is therefore left up to the employer’s discretion. In Germany, however, on-call duty is generally paid working time, i.e. the employee receives payment for the time he or she is on-call. This can be structured in different ways. 

In practice, on-call time is often compensated either on top of the standard hourly wage, or with time off. In many companies, on-call time is also counted as working time and is paid for accordingly. However, this is only possible if the employee is working, rather than being only available by phone. As already mentioned, this would be the case while working from home.

How are on-call services paid in IT companies?

So, let’s get down to business and take a closer look at the payment.

Compensation is of course related to the company. Factors include company size, its relative success, and the industry.

The German Information and Communications Technology (ICT) group (link in German) has given some approximate figures. A week of on-call (7 consecutive days) is paid at a flat rate of €245; incidents responded to are additionally remunerated at €55, and telephone calls at €15. If the on-call week is shorter or longer, a flat rate of €35 per day is to be expected.

For work in a large corporation or a successful startup you can expect to earn around €1000 a week. At Zalando it is €1050, at the startup HelloFresh €1000, and at Amazon Germany around €800.

Certain companies in the financial sector pay at a similar rate, although there are variations in terms of size - as evidenced by top company Mastercard:

SumUp (Germany) - €1050 per week.

N26 (Germany) - €880 per week

Klarna (Europe) - €500 per week

Mastercard (UK) - £470 per week 

Paypal (Germany) - $350 per week

Wise (UK) - £300 per week

What else is important in on-call besides payment?

Employee wellbeing, which is unfortunately sometimes overlooked, is of course of vital importance. On-call duty almost always necessitates disruption of normal work rhythm and life outside of work. If the following 5 points are observed, employees will be optimally equipped for on-call duty:

1. Set clear expectations for on-call hours

2. Rotate on-call hours fairly

3. Avoid overworking the team

4. Make the most of helpful tools and technologies

5. Provide training and support in this area

Other blog posts you might like:

ITIL vs. DevOps: What is best for your organization?

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5 tips for a more modern and efficient on-call management

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Less is more: Incident management and monitoring in hybrid IT infrastructures

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