Attorneys James T. Carey and P. Zachary Stewart

Pursuing your Claims. Protecting your Rights.

Per diem pay comes with complex risks

On Behalf of | Jan 22, 2021 | Overtime And Wage Issues

Most employees expect to be compensated for their work with a regular salary or an hourly wage. However, in some situations, an employer may offer per diem pay. What does this mean, and how might it effect an employee’s wage and hour rights?

Per diem literally means “by the day.” It is an option some employers may use to pay their workers or simply to cover certain work-related expenses. For the latter, an employer may provide money or reimburse an employee who spends money on travel expenses, meals and other incidentals for work. On the other hand, an employee who receives a set amount of money for a day’s work, such as a substitute teacher, may be considered a per diem employee, but this is not always the case.

The implications of per diem pay

Per diem payments that cover daily incidental expenses are usually not taxable, but an employee who receives them must provide the employer with an expense report explaining how they used the money and include receipts to verify the expenses. Otherwise, part or all of the per diem money may count as the employee’s taxable income.

Per diem pay does not exempt an employer from providing a fair wage for workers. A per diem employee must receive at least minimum wage and any overtime pay after 40 hours. Employers may not exclude per diem amounts when calculating a fair overtime rate.

West Virginia employees who earn per diem pay may have more complex factors to consider, especially when it comes to receiving fair wages and calculating overtime pay. It can be easy to become confused when figuring out if an employer is complying with the Fair Labor Standards Act.

An experienced attorney can provide valuable answers and guidance to workers who feel they may be the victims of unjust wages.

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