On-call compensation:how teams pay for nights and holidays.
Being on call means staying near a laptop, staying sober enough to fix production, and sometimes getting woken at 3 AM. Some companies pay for it, some give time back, and some treat it as part of the job. How you handle it decides whether people trade shifts happily or quietly start looking for another team.
Below are the common models, what US rules say in broad strokes, and the details that make on-call feel fair. It's general information, not legal advice: check with HR or an employment lawyer for your situation.
The common ways teams pay for on-call
A flat stipend per shift. A fixed amount for each week (or day) on call, whether or not anything happens. It's the most common model in software because it's simple and predictable.
Hourly standby pay. A small hourly rate for every hour on call, usually a fraction of normal pay. More common for hourly roles and in some countries outside the US.
Incident pay. Extra pay, or time back, for time actually spent responding to a page, often with a minimum like one hour per incident outside working hours.
Days off in lieu. A day off for each weekend or holiday spent on call. Popular because rest is what on-call takes away.
A holiday premium. A higher stipend, or an extra day off, for shifts that cover holidays like Christmas or New Year's.
Many teams combine two: a weekly stipend plus a day off for each holiday covered is a common, easy-to-explain mix.
What US rules say, in broad strokes
Under the federal Fair Labor Standards Act, whether on-call time counts as hours worked depends on how restricted the person is. If they have to stay at the workplace or so close that they can't use the time for themselves, it usually counts. If they just need to carry a phone and answer within a reasonable time, it usually doesn't, but the time they spend actually responding does.
That matters most for non-exempt (hourly) employees, who must be paid for hours worked. Exempt salaried employees, which includes most software engineers in the US, generally aren't owed extra pay by law for on-call, so any stipend is a company choice. Some states have their own rules, so check where your people work. The US Department of Labor's FLSA Hours Worked Advisor is a good starting point.
Make it fair, not just paid
Money doesn't fix a rotation where the same two people always get the holidays. Rotate in a fixed order, count holidays and weekends per person over the year, and swap shifts that land on someone's planned time off.
Keep the load reasonable: aim for each person to be on call no more than one week in four, and fix noisy alerts. A quiet week on call is worth more than a bigger stipend.
Write it down
Put the policy in one short page: who is on call, how long shifts are, what you pay or give back, how swaps work, and how holiday shifts are handled. When people know the deal, they trade shifts without asking you.
Details people notice
Pay the same way every time
Predictable beats generous. A stipend that arrives every month without anyone asking builds trust.
Give the morning after
If someone was up at 3 AM, they start late the next day. Say so in the policy.
Count holidays per person
Track who covered Christmas, New Year's and Thanksgiving, and rotate.
Honor time off
Never put someone on call during their own vacation. Check the rotation against time off.
Fix noisy alerts
Every false page at night is a reason to resent on-call. Tune alerts after each rotation.
Make swaps easy
Let people swap shifts without approval, as long as it's written in the schedule.
Fair on-call starts with seeingwho covers which days.
You can't spread the holidays fairly if you can't see them next to the rotation. This board puts on-call shifts, vacations and public holidays together. It's live, so try rebalancing.
Holidays on the rotation
See at a glance who has Christmas and who has New Year's.
Clashes flagged
A shift that lands on someone's own vacation or holiday gets a warning.
One timeline
On-call, time off and release dates on the same rows, so swaps don't create new problems.
- A weekly on-call rotation over December
- Shifts on someone's own time off get a warning
- Holidays come from where each person lives
- Drag shifts to rebalance the holidays
Keep on-call fair, with everyone's time off next to it.
Forgot puts on-call shifts, vacations and each person's public holidays on one timeline, and warns you when a shift lands on someone's own time off.
- On-call that warns when it lands on time off
- Public holidays for each person's country
- See who covered which holidays
- Your team sends dates without signing up
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Questions
Do salaried employees get paid for on-call?
In the US, exempt salaried employees generally aren't owed extra pay by law for being on call, so any on-call pay is a company choice. Many software companies pay a weekly stipend anyway, or give days off for weekends and holidays covered.
Is on-call time paid for hourly employees?
Under the FLSA, on-call time counts as hours worked when the person is so restricted they can't use the time for themselves, for example if they must stay at the workplace. Time spent responding to pages counts. Some states have stricter rules.
What is a typical on-call stipend?
It varies a lot by company and country. Most software companies that pay use a flat amount per week of on-call, with a higher amount or an extra day off for holidays.
How often should engineers be on call?
A common target is no more than one week in four, which needs at least four people on the rotation. Fewer people means more frequent shifts and faster burnout.