What is Per Diem Pay?

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Per diem pay can refer to two types of employment: compensation to cover expenses accrued while on the job AND a per diem rate for flexible workers.

Per diem pay, commonly referred to as a “daily allowance,” is a type of compensation given to an employee who doesn’t have a regular schedule but instead works hours as assigned.

Per diem payments are also given to employees to cover job-related expenses while traveling for work. These diem rates are meant to reimburse costs such as lodging expenses, meals, and incidental expenses. In California, per diem allowances follow both federal and state guidelines.

How Does Travel Per Diem Work in California?

Per diem payment is generally not considered part of an employee’s wages; instead, they are reimbursements rather than taxable income (as long as they fall within government-approved rates). The Internal Revenue Service (IRS) usually sets the standard per diem rate, and California employers typically adhere to them when compensating employees for travel expenses and incidental costs.

If per diem expenses exceed the federal or state guidelines, the excess amount may be taxable. Employers are required to keep accurate records of per diem allowance amounts, including dates, locations, and the purpose of the trip, to ensure compliance.

Travel Per Diem and Labor Law Protections

While per diem covers travel-related expenses, employees should still receive regular wages for the hours worked, including overtime, if needed. In California, strict wage and hour laws ensure that workers are paid for their time spent working, even when traveling. Employers cannot use per diem to offset or replace regular wages.

Per Diem Employee Rights in California

Aside from traveling workers receiving a diem rate, other per diem employees, or “on-call” or temporary workers, are regularly employed in industries like healthcare, education, and hospitality. These employees are typically hired on an as-needed basis, meaning they do not work regular schedules but instead are called in when additional help is required. While per diem workers in California enjoy flexibility, they also have certain rights and protections under state law, just like full-time employees.

Wage and Hour Protections

Minimum Wage: Per diem employees in California are entitled to at least the state-mandated minimum wage. As of 2024, the minimum wage was set at $16 per hour for employers with 26 or more employees and $15 per hour for smaller employers. Per diem workers must be paid for every hour they work, including any required training time.

Overtime Pay: Even though per diem employees do not have regular schedules, they are still eligible for overtime pay if they work more than 8 hours in a day or 40 hours in a week. California’s overtime laws mandate that employees be compensated at 1.5 times their regular rate of pay for any overtime hours, and double pay after 12 hours in a day.

Per Diem Meal and Rest Breaks

Per diem employees in California are entitled to the same meal and rest breaks as regular employees. If they work more than 5 hours in a day, they must receive a 30-minute unpaid meal break. Additionally, for every 4 hours worked, they are entitled to a 10-minute paid rest break. If employers fail to provide these breaks, they must pay an additional hour of pay as a penalty.

Right to Paid Sick Leave

Under California’s Healthy Workplaces, Healthy Families Act, per diem employees who work at least 30 days within a year are eligible for paid sick leave. Employees accrue one hour of paid sick leave for every 30 hours worked, which they can use for personal illness, medical appointments, or caring for a sick family member.

Anti-Discrimination Protections

Per diem employees are protected from discrimination, harassment, and retaliation under the California Fair Employment and Housing Act (FEHA). This means that they cannot be discriminated against based on race, gender, disability, age, or other protected characteristics. They are also protected from retaliation if they report workplace violations or unsafe working conditions.

Workers’ Compensation

Even as temporary workers, per diem employees are entitled to workers’ compensation benefits if they are injured on the job. Employers are required to provide coverage, and employees can file claims to cover medical expenses, wage loss, and rehabilitation costs.

When Is Per Diem Required To Be Paid? – FAQ

when is per diem required to be paid? According to California travel and subsistence provisions, per diem policies for travel kick in usually on jobs that are 99 miles and beyond so that acceptable lodging must be provided. The employer is required to pay a per diem at the current County rates under the IRS guidelines in which the project is located for meals and incidental expenses.

how many hours can a per diem employee work? Per diem method employees work the hours their employers assigns to them, which can fluctuate. However, their pay must be in accordance with California labor law.

do per diem employees get benefits? Depending on the company, per diem workers may not qualify for the same benefits as full time employees. However, since per diem employees are still employees, their employers must reimburse them for work-related expenses AND pay them for the time they work.

how does per diem work in hospitals? Per diem workers in California are offered a flexible work arrangement where employers hire them on an as-needed basis. Per diem employees do not have a regular schedule and instead work the hours their employer assigns them, which can change.

when is per diem required to be paid in california? Per diem rates are required to be paid to workers who accrue travel expenses while working AND to workers who work on an as-needed basis.

do per diem employees get holiday pay? California law does not mandate that “an employer pay an employee a special premium for work performed on a holiday, Saturday, or Sunday, other than the overtime premium required for work performed in excess of eight hours in a workday or 40 hours in a workweek.” So, it is up to the employer’s discretion.

do per diem employees get time and a half for holidays? If the employer chooses to extend a special rate of pay for holidays, then they could get a special per diem rate for holiday pay.

do companies have to pay per diem? Yes, an employer must reimburse an employee for any expenses related to their job.

how does per diem pay work? Per diem rates can either refer to the expenses accrued for an employee to complete their job (which must be reimbursed by the employer), or a rate of pay that is given to an as-needed worker.

can per diem employees collect unemployment in california? Yes, generally per diem workers can file for unemployment if they have a significant amount of work they completed for an employer.

what are the rules for paying per diem? California employers should provide per diem employees reimbursement payments to cover business expenses they accrue while traveling for work.

do per diem employees get overtime? Yes, per diem employees are eligible for overtime pay.

is per diem on call? They can be. Different arrangements differ from company to company. Per diem employees are typically not guaranteed weekly hours or a fixed schedule. Instead, employers can call them when they need their services or expertise and pay them a flat daily rate.

how many shifts is per diem? It can depend on the employer’s need for the worker’s time or expertise.

is per diem included in workers comp? If workers who travel frequently – and who regularly receive per diem payments that are included in payroll records – their additional payments might be eligible when it comes to receiving workers’ comp benefits.