Why on-call compensation is confusing in IT Operations?

In my IT operation experience i never saw that organizations on-call compensation process and policies are clear or verbose and due to this missing points most of the time it impacts employees on-call compensation part where existing stats say that only 53.5% are paid for on-call work, so today my focus will be on giving clarity to employees as well as to employers so that they can have clear process and policy in place to handle this challenge as i have seen frustration of employees those are under paid or not compensated well for such on-call period.

Second, This blog is more focused on IT Operation Technical engineers like Sysadmin, Site Reliability Engineers(SRE), DevOps, DevSecOps,*Ops, DBA, Network Administrator,Architects, local IT team etc.On Call engineers should be aligned to customer facing, revenue-critical systems or for the infrastructure required to keep these systems up and running.

Third, i would like to break the myth that, no work during on-call/standby period doesn’t mean no compensation as employee has to remain near by with certain restriction so it is categorized as “working hour” by law.There are exception and non exception list in US so please go through your law book.

On-call compensation is not simple or straight forward as it looks but there are multiple factors involved so organization should have some responsible person in team to handle this and he/she can be Team Lead, Manager or someone from HR or Salary department.

How you will decide that on-call engineer worked?What should be the right amount for on-call compensation?

It is very hard to conclude how much effort an IT operation engineer put during an incident and how much time he supposed to take to solve such incident as if you try to analyze such thing using “quantity and quality” approach i.e.Time spent and number of incidents then it will require some efforts on monitoring and management part so there should be some simple formula like Flat Base payment for on-call duration in addition to “time and half” formula.Most of the time i have seen either you are on call per week or per month then you can set per week/month flat base pay with time and half amount formula but please go through stats published on oncall.wtf website. Some references:

  • Google, offers time off in lieu or straight cash compensation, capped at some proportion of overall salary. The compensation cap represents, in practice, a limit on the amount of on-call work that will be taken on by any individual.
  • Canada Oncall law from January 1, 2019:On-call pay – Three-hour minimum pay: Employees who are “on-call” and not called into work, or who are called into work but work less than three hours, must be paid three hours pay.
  • My personal experience during my time, where Mckinsey used to pay 800 INR for weekend(2 days), Avalara was used to pay 1400 INR(Weekend 2 day), Symantec has 400 INR(per day with manager approval) and to be very frank those were not documented compensation in HR books except Symantec but according to me all given compensation were not correctly mapped and i gathered same feedback from my colleague and we were aware that HR were not having clarity about on-call model and how to compensate their employees. So please don’t take these mentioned amount as base pay for your organization and discuss internally with your HR and Technical team and publish policy around it.

First, example for an Indian IT operation engineer is like 1000 INR for 8 hour and if you gets 1 incident in which you logged 1 hour then you should calculate time and half amount for that 1 hour. Time and Half is a variable pay for each employee and again it can go complex if not handled using automation/payment software .You can use experience level as one factor like >5 exp. employee will be given 500 INR per hour or >10 exp. employee will get 1000 INR per hour.

Second, example is when you did not received any incident and you did logged any hour then you will get Flat 1000 INR as your compensation for that day.

Conditions when you will go on-call/Standby?

First, Most of the time you will go on call during non overlap period between 2 time zone like India and US and most of the time you cover around 6/7 hour. For an example of 2 shift or when follow the Sun Model, Engineer named India-A from IST zone work timing is 9:00 AM to 17:00 PM and US-B engineer from US time zone (EDT) work timing gap is around 6/7 hour on an average between US and India.

Second, example is when you are the only person/team and have to handle non working hours then normally you go on call for 15/16 hours a day.

Third, example when your engineer from 2 shift cover 12 hour each(8 Office + 4 non office on-call hours)

Fourth, Weekend on-call for 24 hours or again 12 non working hours as On Call hours.

What will happen if you not pay right compensation?What will happen if you compensate them well?

If not paid well,

  1. Employee frustration and they will get demoralized,
  2. Not attending incidents seriously that will lead to SLA breach and indirectly loss of reputation and money,
  3. Employee Attrition,
  4. Increase in excuse around not handling incidents on time.

If paid well,

  1. Compensation structure ensures incentivization to be involved in on-call duties as required as requested by the team, but also promotes balanced on-call work distribution and limits potential drawbacks of excessive on-call work, such as burnout or inadequate time for project work.
  2. Better alertness to incident management as well as observed that employees take responsibility and handles such incidents with confidence.
  3. Increase in ownership.

How to take out reports for compensation?

Incident management tools like Pagerduty, Opsgenie like tools can be used to count on variable and flat pay part as on-call schedule,escalation policy, incident timeline are clearly document under those tools and it can be used to verify things.Please go through Opsgenie whitepaper around it and download it from URL.

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Opsgenie Oncall distribution dashboard

Ref: Atlassian Blog

Govt. Labour Laws around On Call and related employee contract and agreement?

US(FLSA:Fair Labour Standards Act), EU and India(Indian Labour Law) all countries,continents has their labour law where they have many conditions to categorize “working hour”, “on call/standby working hours” etc but i don’t want to go deep but atleast employer have to keep eye on minimum base pay for any work to get compliant to law. Govt. law will not solve your problem about how much you should pay to IT operational on-call engineer so it depends on each organization process and policy so your HR department should have good clarity mentioned in employee agreement/contract about On Call or Standby Engineer responsibilities and compensation details, In case organization don’t want to way extra On Call/Standby compensation then mention it clearly that such amount is already included in your normal monthly salary or annual CTC so that you set expectation in advance and individual can consider during offer acceptance.

Great breakdown and recent 2019 survey stats are available by oncall.wtf on URL.

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To analyze organizational policy in IT market regarding on-call engineers compensation and publish on-call payment related stats i have created small 10 questioner Google form and will publish stats so please help me to fill required fields so that it can help each IT organization to simplify and clarify on-call payment process as we don’t have concluded data from many external vendor so would like to request you to fill following form:

  • Google Form: URL

There are other factors/conditions and solutions that we can talk about and i would like to end this discussion here and we can continue that discussion in comment block and will come up new version having more information from industry so please comment below with your scenario.