This sounds a bit hard to believe. Mind sharing some of the $ figures of this business?

Nevertheless, I'm with the parent. This practice is abusive. When you're not working, you're not working. Being on call is working. If a company wants you to work longer hours they should make it explicit, pay for it, and comply with the local employment laws. This sort of argument that the business has no merit if they were to hire more people or pay can be applied to many exploitative situations. Most of the companies doing this are drowning in profits.