California Per Diem

Have you ever wondered how employees get reimbursed for expenses incurred during work travel in California? The answer often lies in understanding per diem in California. This unique compensation system offers flexibility for employees on the go.

Navigating per diem rates and reimbursement rules can take time and effort. Fear not; this comprehensive Freeburg and Granieri guide will equip you with everything you need to know about per diem in California.

What is Per Diem?

Per diem, a Latin term meaning "by the day," refers to a fixed daily allowance employees receive to cover expenses like meals and incidentals while traveling for work.

Unlike a salary, per diem isn't directly tied to the number of hours worked. It's a predetermined amount intended to reimburse employees for reasonable daily costs during their business trips.

Differences Between Per Diem and Salary

A key distinction between per diem and salary lies in their purpose. Salaries compensate employees for their time and work performed. Conversely, per diem in California reimburses out-of-pocket expenses incurred while on official business travel.

Salaries are typically fixed and regular, whereas per diem rates can vary depending on location and travel duration.

Depending on your type of work, employers are not required to pay per diems.

Common Uses of Per Diem in California

Per diem arrangements are prevalent in various industries across California. Here are some common scenarios where you might encounter per diem:

• Business travel: Employees traveling for sales meetings, conferences, or project work often receive per diem to cover meals, laundry, and local transportation.
• Temporary work assignments: Per diem is frequently used for temporary workers like consultants, contractors, or freelancers whose assignments require travel.
• Field work: For employees working on-site at different locations (e.g., construction workers and inspectors), per diem can compensate for daily expenses.
• Prevailing wage construction: Certain construction industry projects paid at prevailing wage require staffed employees to receive a per diem.

Per Diem Rates in California

Understanding per diem rates in California is crucial for both employers and employees.

Who Sets Per Diem Rates?

Three main entities establish per diem rates:

• Federal Per Diem Rates: The General Services Administration (GSA) sets per diem rates for federal government employees on travel within the continental United States (CONUS). These rates serve as a benchmark for many private companies.
• State Per Diem Rates: California has its own set of per diem rates for state employees or when state funds are involved.
• Private Company Per Diem Rates: Private companies can determine their own per diem rates, which may differ from federal or state rates.

Variations in Per Diem Rates by Location

Per diem rates in California can vary significantly depending on the location of your business travel.

• High-Cost Areas vs. Standard Rates: Due to increased living costs, major cities like Los Angeles and San Francisco typically have higher per diem rates than smaller towns.
• Finding Per Diem Rates for Your Location: Several resources, including the GSA website, state government websites, and online per diem calculators, can help you find per diem rates for your specific location.

Here's a table to illustrate the possible variations:

Note: These are sample rates and may not reflect the latest figures. Always check for the most current information before your trip.

Per Diem Breakdown: Meals & Incidentals (M&IE)

Per diem in California typically consists of two components:

• Lodging: This covers the cost of your hotel stay during the business trip.
• Meals & Incidentals (M&IE): This component reimburses you for meals (breakfast, lunch, and dinner) and other miscellaneous expenses like laundry, tips, and transportation.

M&IE rates can also vary depending on location and may be presented as a combined rate or separate amounts for meals and incidentals.

Here's a breakdown of what might be included in the M&IE portion:

• Meals (Breakfast, Lunch, Dinner): The M&IE rate is intended to cover the reasonable cost of these meals during your travel days.
• Incidental Expenses (Laundry, Tips, Local Transportation): This portion reimburses you for minor expenses incurred while traveling for work.

Separate Rates for Lodging and M&IE:

Some per diem arrangements may have separate lodging and M&IE rates. This allows for more flexibility, especially if you choose to stay with friends or family during your trip. In such cases, you might be able to keep any unused portion of the M&IE allowance. However, always clarify your employer's policy on this point to avoid any misunderstandings.

Daily vs. First and Last Day Rates:

Per diem rates may vary on your trip's first and last days, depending on your arrival and departure times. If you arrive late and only eat dinner, the rate may cover just dinner.

Conversely, if you have a full day of meetings before departing late at night, you might receive a full per diem. Clarify these rates with your employer or consult your company's travel policy.

Eligibility for Per Diem Reimbursement

In California, only some people who travel for work qualify for per diem. Here's a breakdown of eligibility:

Per Diem for Employees

• Employee Categories Typically Receiving Per Diem: Salespeople, consultants, project managers, and other professionals whose jobs require frequent business travel are most likely to receive per diem, but this is dependant on your industry and employer’s policies
• Employer Policies and Per Diem Eligibility: Your eligibility for per diem depends on your employer's specific policies. Review your employee handbook or travel policy for details on per diem reimbursement.

Per Diem for Independent Contractors

Independent contractors may also be eligible for per diem if their contract includes such provisions. However, the terms and conditions for reimbursement will likely differ from those for employees.

Using Per Diem Effectively

In California, maximizing per diem necessitates some planning and awareness.

• Budgeting for Per Diem Expenses: Familiarize yourself with the per diem rate for your travel destination and plan your spending accordingly.
• Record Keeping and Receipts for Per Diem Reimbursement: Most employers require receipts to document your per diem expenses. Keep detailed records of all your lodging and M&IE expenses for reimbursement purposes. Failure to provide the required documentation can be justifiable grounds for discipline up to termination.
• Common Per Diem Misconceptions: A common misconception is that per diem is "free money" to spend however you like. Remember, its purpose is to cover reasonable business expenses and you are required to comply with your company’s reimbursement and/or record keeping policies.

Alternatives to Per Diem

Per diem is one of many ways to reimburse employees for travel expenses. Here are a few alternatives:

• Meal Allowances: Employers may offer a fixed daily meal allowance, separate from other travel expenses.
• Company Credit Cards: Some companies provide employees with corporate credit cards for approved business expenses during travel.
• Business Expense Reimbursement: Some companies require employee to submit receipts for business expenses paid on an employee’s personal credit card.

Legal Considerations of Per Diem in California

Understanding the legal aspects of per diem in California is crucial for both employers and employees:

• Minimum Wage and Per Diem Rates: Per diem reimbursements cannot be used to bring an employee's total compensation below the minimum wage for all hours worked.
• Employee Expense Reimbursement Laws: California has laws governing employee expense reimbursement. It's recommended that you consult with Freeburg and Granieri APC to ensure compliance with all applicable regulations.

Freeburg & Granieri APC: Your Partner in Employment Law

Freeburg & Granieri APC is a Pasadena-based law firm dedicated to protecting the rights of employees throughout California. Our team of experienced and passionate employment law attorneys has a proven track record of success in handling a wide range of workplace issues.

We help employees facing challenges with expense reimbursements, we can provide the legal expertise and support you need.

We offer personalized legal representation and will fight for your best interests. Let us help you navigate the complexities of employment law in California. Book a free consultation with us.

Final Thoughts

Per diem in California offers employers a flexible way to reimburse employees for travel expenses. By understanding the different components, eligibility requirements, and legal considerations, you can navigate per diem arrangements effectively.

Freeburg & Granieri APC can assist California employees with legal matters related to per diem and other employment issues. Our experienced employment law attorneys can help ensure compliance with relevant regulations and protect your rights.

Remember, don't be a commodity regarding your legal needs. Contact Freeburg & Granieri APC today for a consultation.