Per Diem For Travel, Meals, Gas or Overnight Stays
A per diem traditionally means money paid to an employee to offset travel or other work-related incidental expenses. Most people don’t realize that employers often use per diem payments to avoid paying overtime or additional wages. This type of practice is illegal and may result in the employee receiving overtime wages at a lower rate of pay. Workers in the oilfield are frequently subjected to these practices.
How Does Per Diem Affect Overtime Pay?
Employers use per diem payments to avoid paying employees overtime, taxes and/or other benefits. Employers know that if you receive a per diem payment and the payment is not added to the total compensation you receive, your overtime rate will be artificially lower than it should be. This is true because the law requires your overtime rate to be calculated based on all the compensation you receive. The more compensation, the higher your hourly rate will be. This makes a big difference for those employees receiving hundreds of dollars each week in per diem payments.
Figuring out the difference in overtime pay with or without the inclusion of a Per Diem payment can be complicated. We have the expertise to help you determine if your rights have been violated and your pay shortchanged. Call today for a free legal consulation.