Setting on-call rates and rotation pay.
If you have techs (or yourself) on-call, they need to be compensated for the time. Here's how to structure on-call pay — standby vs. response — and what's typical by industry.
If you have techs (or yourself) on-call, they need to be compensated for the time. Here's how to structure on-call pay — standby vs. response — and what's typical by industry.
On-call compensation has two components: (1) standby pay — flat hourly while on-call (typically $5-$20/hr or a flat weekly fee like $100-$300), (2) response pay — the actual labor when called (typically time-and-a-half or double-time, with minimum visit fee). Standby alone for techs who can do other things; standby + response premium for techs who can't.
If you're the on-call tech (solo business), don't forget to bill the surcharge to the customer. Then pay yourself the premium from the additional revenue.
The math: if you charge $150 after-hours dispatch + $50 premium hourly above standard, that's $200-$300 of additional revenue per call. Most solo owners forget to allocate this back to themselves and treat it as 'general' revenue.
If you employ techs (W-2): document on-call rates in writing, comply with state-specific labor laws (some states require minimum wage during standby, some require call-back pay differently).
If you contract (1099): rates documented in contract. Less regulatory weight but still worth getting right.
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