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Per Diem Rules

What are per diem rules?

Per diem is a specific or fixed amount of money which a company provides to an employee to reimburse stay and travel expenses incurred while travelling or working away from the place of employment. Employers usually pay a standard daily rate irrespective of the actual amount spent by the employee. This eliminates the need to create expense reports by employees for reimbursement. Employees need not return any unused or unspent per diem money.

My spouse and I are working together for a project in the same company. We had a fixed per diem rate of $155 but since we live together, the employer has reduced the per diem to $40. Is this allowed? When other employees share accommodation they are paid the regular per diem, the rule applies to married people only, is this considered discrimination?

Per diem rules are created and controlled by the company and are governed by the company policies. The company has a right to change the rules at any given time with notification. Some employers also refrain from paying per diem to their employees as a company policy. In your situation it appears the rules are discriminatory in nature towards married couples. You may have a valid argument in this case and you could file a claim with the Equal Employment Opportunity Commission (EEOC). After deliberation, if the EEOC rules in your favor you would be granted a “right to sue” letter and a lawsuit could be filed to claim the amount due to you.

Can child support obligation be fulfilled entirely using tax free per diem amount? My social worker says it can.

Per diem is not an income, it is essentially a reimbursement for business expenses. In most cases it cannot be used to pay child support. Technically since per diem cannot be used to ascertain child support there could be some complication with your bank account or per diem is mixed in with the other income leading to it being perceived as an asset.

I need to provide my financial statement of income for the purpose of modification of child support. Am I required to include non taxable per diem in this? Under what category do I list per diem in the financial statement (FL 155)?

The court considers income from all sources, whether it is reported or taxed under federal law, for the purpose of calculating child support. Hence non taxable per diem is included in the modification. If no other specific category is available on the financial statement, you can show per diem under employer benefits. In most cases, the court will request for tax returns along with proof of income/wages such as pay stubs. It is better to be frank and honest with this information to avoid problems in the future.

Does per diem replace wages or is an addition to them? In my previous company it used to be an addition whereas my current company it is replaced by wages.

In the literal sense, per diem is per day or daily wages. The per diem rate is what you receive or entitled amount on a daily basis. In your earlier company you could have received per diem as an allowance or reimbursement of expenses in addition to regular wages. Your current company is calculating in the literal sense of daily wages which is also correct.

My company charges the customer government stipulated per diem but I as an employee do not receive the same rate. Is this allowed?

The per diem rules are relative to each company, uniformity arises only in the tax treatment of such payments. Some government agreements specify the employee should be paid the declared per diem. Some other government contracts do not require the employees to be paid expenses. A common practice companies generally follow is per diem skimming for tax benefits. Since per diem is taxed in a different manner compared to salary, on papers, the employer may choose to show the per diem received as a way to offset the salary paid to employees. Apart from this there are many other ways which companies employ to control per diem and salary for tax purposes.

Is there a law which regulates per diem payments? If the company is paid a certain rate from the client, are they required to pay the whole rate to the employee?

There is no specific law which regulates or controls per diem rate. The company can choose to retain the whole amount received by the client. The rate payable to the employee is based on the company’s policy and contractual agreement of the employee. Example: if a company were to make profits or incur losses, it is required to pay per diem at the agreed rate to its employees.

Per diem rules can vary from company to company. Some may pay it while others may not grant per diem to its employees. The law or government does not have a significant role in regulating the per diem rate declared by companies but discriminatory practices can be reported to authorities. To know more about per diem and have your questions answered consulting Experts will be help provide the right and relevant information.
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