Career Path > Money Matters

Losing per diem

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Jiggie:
I was employed by a contract company in an outage starting in Sept. last fall. I was laid off and had an approx 6 1/2 week break over the holidays returning to work at the same site mid January. I was asked to stay after the spring outage with no end date quoted and no guarantees. They told me at the time, I would lose my per diem Sept 7th since I would have been on site for one year without 8 weeks contiguous unemployment. I agreed to stay with my pay rate going up quite a bit when I lost my diem.

Now, the utility is saying no go on the pay increase when you lose your diem. I told them I would be leaving to work other outages this fall since I could make far more doing that than staying here. I applied for some outages through my current contract employer who apparently had no issues with it at the time and I was accepted at one of my choices last week.

I walk in this (Monday) morning and get a call from the contract company informing me that even if I leave here and work outages elsewhere, I will still not get per-diem since I have not had 8 contiguous weeks of unemployment. At first I was hearing 8 contiguous weeks at this site. Now all of a sudden its 8 contiguous weeks in one year period and no per diem anywhere

Anybody ever hear of this type situation?

stownsend:
They (both) are making things up as they go. Each company can offer per diem or not. There are many threads on per diem on this site.  Some company's and many techs think if they take a break or vacation the clock starts all over again. They are all in for a surprise when they are given the final tax bill after interest and penalties.
There is no such rule having to be unemployed for eight weeks before you are eligible for reimbursement again.If you work at one site then take eight weeks off and go back to the same site you probably won't win.There are rules of being away from your home and having duplicate expenses. Some people and companies think there is a hard fast one year rule. The day you are told the job will exceed one year in duration that is the day you're not eligible anymore.If you work one site(<1 year) then go directly to another short term (<1 year) job you are still eligible if you have a permanent home elsewhere. Please look up the rules posted on this site or even better spend a little bit of that money and talk to a tax professional like the tax consultatant who posts/ advertises here.

BetaAnt:
The only IRS provision (buried deep in the code and case files) is a 90 day separation for the same site. But the case may be 'The Golden Rule' (He who has the gold makes the rules). Unemployment doesn't count. Site separation counts only. Ex. I work for Company A at site B for more than one year, my per diem will be taxed as income after a year. If I transfer to site C (more than 50 miles from my primary residence), I draw the tax free PD at site C. You can draw per diem more than a year, tax free, provided you are not in one place more than a year.
Your company is playing with your money. Time to switch companies or bite the bullet.

Jiggie:
I contacted a tax professional that I found on this forum prior to this post but thought I would solicit additional comments and experience. If by "look up the rules posted on this site" you mean the standard look for your answer prior to posting a question, I did that as well but didnt find anything that anwered my questions well enough.

Already Gone:
Sounds like you are getting jerked around.  Or, maybe you are hearing and understanding it differently from the way they are telling you.
Per diem is simple.  They can offer it if they want and not offer it if they don't want.  If they offer it, they have to do it by the rules.
One of those rules is that the assignment has to be temporary.
Temporary means 1) has a definite end date, 2) the definite end date is less than a year from the start date.  If at any time, the end date is expected to be longer than a year after the start, OR if it was never definite to begin with, then the job is NOT temporary.
Another rule is that it has to be away from you tax home for longer than one day.  Your tax home is the place where you live when you are making most of your money.  If no single place fits that criterion, then you either have no tax home (and therefore are never eligible for per diem) or your tax home is the place where you maintain a home and intend to return when you are not working on the road.

BetaAnt is incorrect about several things.
There is no rule concerning a 90 day separation or an 8 week unemployment span, continuous or not..

Per diem NEVER becomes taxable after a year.  If it is paid when it is not according to the rules above, it is taxable PAY - NOT PER DIEM.  However, that occurs at the moment that the job is EXPECTED to go over a year or when there is no definite end date.  In that scenario (someone takes a long term job knowing that it is long term) the per diem, if paid, is taxable on day one --not on day 366.
Likewise per diem never disappears after a year.  If it wasn't a temporary job, it should never have been paid at all.  
Basically, the companies who take per diem away or tax it after a year, were not supposed to be paying it in the first place.  Those companies are just digging you a hole.

You need to clarify WITH THE CONTRACT COMPANY what they are telling you.  I don't think they mean that you won't get per diem at some other site.  If that is what they are telling you -- call a different company who knows what the hell they are doing and work for them instead.

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