Per Diem Docking?

[jedball]

Question;

I've been told that an employer can not dock your per diem until you've been out of work for at least 10 days in a row even without a doctor excuse. Someone told me the Labor Board person gave them this info.

Has anyone heard different or the same thing?

[RAD-GHOST]

You have asked the question that will never get a realistic answer! 

I believe if you research the issue, Per Diem isn't even considered under any labor laws.  As a contractual agreement between you and the employer, YES!  As far as a legal entitlement, NO!  As far as the company docking Per Diem, yes they can!  Now on the other hand, can they dock wages?  NO THEY CAN NOT!  The fact that they attempt it, should tell you they have the upper hand in the game! 

RG

[Already Gone]

The only legal obligation an employer has (as far as money goes) is to pay you at least $5.75 per hour for all the hours you work, and time and a half if you work over 40 hours in a week.
They don't have to pay you per diem.  If they start paying you per diem, they can stop at any time with or without a reason.  Unless you have a written contract, they don't even have to pay what they promised.  They can say that they're paying $25/hour and actually pay $5.75.
Naturally, anyone who pulls crap like that won't be in business for long, because they won't have any employees.

BTW, they CAN dock your pay too.  If you owe them money, they can collect it from your net pay.  (They have to "pay " you for all the time you work.  But, they can also deduct what you owe them from  your check.)  It happens all the time.  For example: I worked for Bartlett and got per diem for a whole week, even though I got laid off before the week was over.  Bartlett just took back what I owed them from my net pay.  This is not only legal, but it was a whole lot easier than having to send them a check.

As far as how many days you can miss work and still get your per diem, that's up to the company you work for.  Some people lose their pd for a whole weekend just for calling in sick on a Monday.  Others, can take a four day weekend, tell the boss that they are going home for the whole four days, and still get per diem for all those days.  It could be that the ddifference is all a matter of which one of those guys pissed off the boss.
Fair?  Maybe not.  But fair goes both ways.  They'd be a whole lot less likely to pull per diem if it weren't for all the people who tried to collect diem on days when they were calling in "sick" to extend a weekend.

If you missed work and lost per diem, your best shot is to 1. show that you were sick with a note from a doctor, a hospital bill, or even a receipt for a prescription, and 2. show that you stayed in town the whole time with a hotel reciept and 3. ask the site coordinator NICELY to help you out.  But, if you try to spout some nonexistent labor law, they'll just blow you off.

[SloGlo]

Question;

I've been told that an employer can not dock your per diem until you've been out of work for at least 10 days in a row even without a doctor excuse. Someone told me the Labor Board person gave them this info.

Has anyone heard different or the same thing?

everytime i think i've heard it all.......
per diem is a contractual arrangement, not a labor law item. so i'm with beercourt on this one. 

[Rennhack]

I'm with BC as well, it is NOT a labor law.  If you think it is, the laws are published online at GPO Access.

[RDTroja]

It would be excruciatingly painful and quite expensive to try to recoup ANY money an employer tried to take away from you in absence of a written contract. Beer Court is 100% right on this... the things stopping this from happening more often are 1) the employers integrity and 2) docking for no reason on a regular basis would quickly get around and the employee pool would get very shallow.

If you take unscheduled time off of any sort, expect to lose your perdiem. If you don't, you can consider it a bonus and remember to do that employer a favor in return.

[PSYCHO]

Ok people lets get real.  You have mentioned contracts, laws, in your replies.  When is the first or last time any of you guys signed a contract for any nuclear site short term outages?  In my case I have not in my 20 plus years. Docking is a personal, not professional, or company standard procedure. Favorites, buddies, and candy suppliers get there's with no questions asked. Most others do not receive an equal shake.   

Example; Tech. A calls off for two days during an outage 
               
                 BUDDY:  gets payes per diem.

                 TECH. B calls off for two days during an outage 

                  NOT A buddy/partier not paid per diem.

This is the real deal!   Just ask the old roadies from B.V., Peach, Calvert, Limerick, and so on.......    This is not a law not a contract!

[PWHoppe]

Psycho, good points... I too have seen it work that way, not saying it is right, but I would suggest when that does happen take it up with the home office since the problem is obviously with the site coordinator.

BTW..do not post with all caps..it is the cyber version of yelling at someone, and I know you didn't mean to yell at us..

[newdeconner]

They can dock you , BUT you can write it off as unreembursed buisness expense on your taxes and any amount under payed per CONUS rates so itemize and be happy.

[Already Gone]

Before you start giving tax advice, learn the tax law.  You, like most nuke workers, are suffering under a huge misconception about per diem.
Here is what you CAN do.
1. Add up all the ACTUAL expenses that you paid and have records for over the entire tax year.
2. Subtract the perdiem and other reimbursements you got for the entire tax year.
3. Deduct the difference if it is a positive number.  (if it is a negative number, tear up the form and forget about it)

You CAN NOT deduct the difference between your actual per diem and the CONUS rate.  The law is not complicated on this.  You can not deduct what you do not spend.  The actual perdiem (not the CONUS rate) is presumed to be the amount you actually spent unless you have receipts to prove that you spent more.  BUT, if the actual rate is greater than the CONUS rate, you have to have receipts for everything - no matter how much you spent.

Since most roadies get more in per diem each year than we spend, none of us should be deducting travel expenses.  Anyone who does is either living high and keeping very good records of it - or lying on their tax returns.

It would blow your mind to know how many travelling nuke workers have problems with the IRS.  It should therefore be no surprise to anyone that most of them got turned in by other nuke workers with tax problems.  THe IRS encourages this snitching by monetarily rewarding the snitch.  If you owe them thousands, you tend to sell out your coworkers.
Therefore, I highly recommend to my nuke colleagues that you all pay your taxes and avoid the scams that can get you into deep doo doo when one of your "friends" has been caught and sells you out.  The old deducting the "unpaid" per diem is as old a scam as they get, and the IRS is onto it.

[PWHoppe]

Very sound advice Beer Court, that anyone from the Numanco days at DC Cook can relate to. The rules as you state them are true. The IRS is indeed on to this so be very careful how creative you get with your expenses.

BTW did you realize when you put the words The IRS together you get THEIRS...

[Tech-A]

The posts on here so far are correct from the "Labor Law" standpoint. But the other side of coin is the "CONTRACT" law.
A verbal contract is enforceable.
If you have 10 techs that show up on site and are being told that company is only going to pay them 7$hr and 50day Pd, when they were ALL told they was going to get paid 14$hr and 90day Pd, They could take the company to court and win.
Then there is the "AT WILL" argument.......

[halflifer]

Also, talk to a lawyer if they are docking your per diem and didn't stipulate this at the time of hire. Per Diem means 'by the day' so you may be able to recover it if docking for time off wasn't a clear condition of hire.

[Rennhack]

Per Diem Payments
Tax and Wage Issues Make Business Travel Reimbursements Complex

Because of the unique nature of the staffing industry and the temporary assignments worked by its employees, the subject of per diem payments is often a concern for staffing companies. Issues related to both income taxes and wages are inherent.

A per diem, or daily, allowance is a way for an employer to reimburse an employee, without the need to obtain expense reports or other documentation, for expenses incurred while temporarily away from home (or the usual place of business) on business. A staffing firm client company may also qualify to make per diem payments, and per diem reimbursements are available to self-employed individuals as well.


Accountable or Nonaccountable?
For a per diem plan to be eligible for favorable tax treatment, it must be an "accountable" plan. If the plan is deemed to be accountable, the payments will not be considered taxable income to the employee.
For a plan to be considered accountable, the following requirements set by Internal Revenue Service regulation 1.62-2(c)(1) must be met:

The plan must have a "business connection." This means that payments must be made for ordinary and necessary business expenses incurred (or that the employer reasonably expects to be incurred) by an employee for lodging, meals, and incidental expenses—or for meals and incidental expenses only.

Payments must be reasonably calculated to not exceed the amount of expenses or anticipated expenses.

Payments must be paid at or below the applicable federal per diem rate or some other recognized method, such as a flat rate or schedule.

The employer's plan must provide for return of excess payments—any of the per diem that is not spent on lodging, meals, and incidental expenses. Employees must be notified that excess payments must be returned through payroll deductions or employee reimbursement, and the employer must make a good faith effort to collect these excess funds.
If the employer cannot demonstrate that it meets these regulatory requirements, its plan will be considered "nonaccountable," and the amounts must be included in the employee's gross wages and W-2 form. Not having an accountable plan defeats the purpose of per diem, which is to reimburse the employee for business expenses without having that money considered income or part of wages. There is really no advantage to having a nonaccountable plan. An accountable plan is necessary if you want to pay per diem on a tax-effective basis.


Income Tax Issues
Remember that per diem means per day. With certain exceptions, an allowance that is computed on a basis similar to that used in computing wages or other compensation does not meet the business requirement and is not a per diem allowance. Accordingly, per diem should not be paid on an hourly basis—unless the employer can meet the limited exception, which provides that the employer must have had a per diem plan in place as of Dec. 12, 1989.
Under certain circumstances, an employer may provide per diem for meals and incidental expenses only (not lodging). However, under most circumstances, an employer may not allocate the full per diem allowance to lodging, even if the employer reimburses at a rate within the lodging-only portion of the government rates. One reason for this is that businesses are allowed to deduct only 50% of the expenses allocated to meals and incidental expenses, whereas lodging expenses are fully deductible.

Federal per diem rates separately identify expenses for lodging, and meals and incidental expenses. Even if the amount for lodging is the same as or greater than the total amount reimbursable to the employee per the agreement between the parties, the entire amount may not be attributed to lodging. There must be an amount separately attributable to meals and incidental expenses. If those amounts are not separately identifiable, the employer should allocate 40% to meals and incidental expenses.

It is important to remember that any amounts paid by an employer in excess of the allowable rates will be considered as having been paid under a nonaccountable plan—meaning that excess amounts must be included in the employee's gross income and reported as wages or other compensation, subject to tax withholding, on the employee's Form W-2.


One-Year Rule
Per diem is only available to employees temporarily away from home. If the employee is away from home in a single location for an assignment that is realistically expected to last for one year or less, then the assignment is temporary. If the length of the assignment is indefinite, no per diem is available.
However, the realistic expectation can change during an assignment. What happens if an assignment, which was originally expected to be temporary, is extended to a period beyond one year? Once the employer has a reasonable expectation that the assignment will last longer than one year, per diem payments must stop at that point. If that occurs, there is no requirement to retroactively tax the per diem. If an employer has to stop making per diem payments, then the employee would be required to submit expense reports and receipts to be reimbursed by the employer.

Generally, payments under an accountable plan are excluded from an employee's gross income and are not required to be reported on the W-2 as income. The employer may take a business deduction for the amount of proper reimbursements. Again, it is important to remember that while lodging expenses are fully deductible, expenses for meals and incidental expenses are subject to a 50% deduction.


Wage Issues and Split Rate
If per diem is improperly paid, it could form part of the regular rate of pay and therefore be subject to premium overtime requirements if more than 40 hours are worked in any workweek (or eight hours in a day in some states).
On occasion, employees will request that an employer pay what amounts to a split rate for all hours worked. A typical request might be that the employer pay $14 an hour in wages and an $80 per diem. That $80 a day would result in a payment of $10 an hour for a typical eight-hour day. When combined, the wages and per diem provide total compensation of $24 an hour. Accordingly, the employee could request premium overtime of $36 per hour.

These arrangements may technically meet the IRS and U.S. Department of Labor requirements because the $80 per day is less than the government reimbursement rates permit and $36 per hour is greater than the time and a half required for premium overtime hours payable to nonexempt employees.

However, split rates are specifically prohibited by IRS regulations and could result in problems for your staffing firm. If payments made by a staffing firm are investigated, a reverse calculation would reveal a premium overtime rate of 2.57 times the $14 per hour straight time rate. This is highly suspect—because it's so much greater than time and a half—and may lead to a finding of subterfuge and disqualification of an accountable plan, as well as loss of the deduction for the offending payments, or under certain circumstances, for the entire plan.

For more information on per diem, including reimbursement rates, visit the Web site of the U.S. General Services Administration at www.gsa.gov and click on the link Per Diem Rates.

Enlighten yourself:: 

Federal Statutes: 26 U.S.C 162
Internal Revenue Service Reg: 26 CFR  1.274-5
IRS Publications 1542, 463 and 535.
Revenue Procedure 2001-47
Revenue Procedure 2001-42
Revenue Procedure 2002-63
Revenue Procedure 2003-80
I.R.B. 332
Revenue Ruling 69-592
See also, United States v. Cornell, (1967) 389 US 299

Other links:

http://www.policyworks.gov/perdiem
http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC
http://www.uslegalforms.com/lawdigest/legaldefinitions.php/per_diem.html
http://www.staffingtoday.net/memberserv/0904ss/story6.htm
http://www.nysscpa.org/cpajournal/2003/1203/features/f123803.htm

[Rennhack]

Troy, read this:
http://groups.msn.com/TheContractEmploymentCoffeeShop/faqs.msnw?action=view_list&row=5&viewtype=2&sortstring=

[Already Gone]

Also, talk to a lawyer if they are docking your per diem and didn't stipulate this at the time of hire. Per Diem means 'by the day' so you may be able to recover it if docking for time off wasn't a clear condition of hire.

If they are docking your per diem, they are ostensibly doing it because you did not have reimbursable expenses that were business related for that day.  There are a lot of conditions in that sentence.  If they find out that you spent the day playing golf, your expenses for meals and lodging are not business related.  If they find out you checked out of the hotel and took a three day weekend, then you didn't have any meal and lodging expenses that were reimbursable.  (You do have the right to deduct the cost of the trips home at reasonable intervals, but the "oral contract" does not obligate the employer to pay you perdiem on those days).
If they find out you were staying at a friend's apartment, or getting deal at a hotel, they can make you repay the excess per diem.
Oral contracts are enforceable as has been pointed out (I have won a lawsuit based on an oral contract - I'm still waiting to get the money) but you had better make sure that you get all the facts out in the open.  If the recruiter says "the job pays $24 and $90" you should make him say "the job pays $24 per hour and $90 per diem for every day of the assignment."  Then you need some way to prove that they said those words.  An oral contract that you can't prove existed is worthless.  They have the absolute right to claim that the oral statement was meant to convey that they intended to pay the $90 in accordance with all applicable tax laws.  You have no legal recourse if you claim that it was supposed to mean otherwise, since a contract to violate the law is not a contract at all - it is a conspiracy - and you can't get any court of equity to enforce it.

Although per diem means "per day" the deduction you can take on your income tax return is the total amount for the entire year of expenses less reimbursements.  If you read the stuff quoted and cited above, you will find that there is no provision for claiming a deduction for the difference between CONUS and actual per diem.

The bottom line is this:  If they docked your per diem because you were not at work - you almost certainly are not going to get that money.  Tax law and contract law aside, there is just the reality of the thing that you have to consider.  The question you have to ask yourself is whether it is worth the trouble.  "Is the juice worth the squeeze?"  How much can you gain, and what will it cost you to get it?

[RDTroja]

If they find out that you spent the day playing golf, your expenses for meals and lodging are not business related.

That has nothing to do with perdiem eligibility. Perdiem is for your expenses when you are away from home to work. It doesn't matter if you are working, playing golf or mountain climbing on any given day. You still have to eat and have a place to stay. That is why you get it for 7 days when working 5 or 6 (or even 4). It is for the money you have to spend because you are not at home. What are you supposed to do on weekends or days off? Sit in your hotel room? Starve? If you start claiming that you treated other people to meals, that is a problem, but your own meals are fair game, golf or no.

One of the good things about perdiem is that it is how the government pays their own, and they are less likely to scrutinize it unless you start playing games with it. It covers any reasonable expense that is caused by being away from home. If you get paid less than it costs, you can claim it. If it costs less, there is very little liklihood they will ever question it as long as you are inside the guidelines. The real trouble comes when it is abused on a grand scale, and is combined with other questionable practices. That is how they finally got to IRM... the perdiem mess was part of a bigger business scam. But for individuals, it is a lot less complicated. Don't claim extra unless you can back it up.

[Rennhack]

One of the points Troy was trying to make (He made MANY great points) was that the employer MUST make sure his "Per Diem Plan" is Accountable.  If not, no one gets Per Diem.  Part of being accountable means that they can not give you Per Diem if you do not meet the strictest of tax law standards.  AND they MUST take back any Per Diem that you are not eligible for.

I have performed countless hours of research on this subject, I have read every document cited in my message above.  I have stayed current on this aspect of the tax law for 15 years.

Of the published material, there is only one mention of anyone ever trying to get the difference between the amount of Per Diem furnished by your employer's ACCONTABLE plan and the CONUS rate.  That one mention admitted he had been audited.  He claims to have come through the audit in tact.  Do you want to test it?  Do you want to flag an Audit?  Is it REALLY worth it?  Only YOU can answer those questions.

If you DO try to claim the difference, I do have one suggestion:

Make sure you allot the correct percent to MSIE, which is only 50% deductible.

If your employer gave you $65/day, and the CONUS is $91 ($60 Lodging, and $31 MSIE) then you have to claim $42.86 of your DIEM as Lodging and $22.14 as MSIE.  Of the "missing" $26, you would write $17.14 down as unpaid Lodging and $8.86 as unpaid MSIE, of which only half is deductible, i.e. $4.43.

If you are in the 15% tax rate (AGI <30k), your tax savings would be $3.24 a day.

Is $3.24 worth the audit?

Let's say you have 60 days in the spring and 60 days in the fall that you can take the extra $3.24, you would see a total tax saving of $388.29.

Personally, I rather work 10 more hours of OT than challenge the IRS for $388.29


Of course... If your AGI is 72 – 150k, you are in the 28% bracket, and if you had to work 11 months to get in that bracket, and you were only paid $50/day; your tax savings would be $3,190.75

Summary: 

You worked 4 months, earned 29k AGI, was paid $65 of $91 Per Diem; your tax savings would be $388.29

You worked 11 months, earned 73k AGI, was paid $65 of $91 Per Diem; your tax savings would be $3,190.75

[RDTroja]

One of the points Troy was trying to make (He made MANY great points)...

I am not disputing his accuracy or that he made great points... only the part about golf. Now that I have reread the post, I assume he was talking about claiming perdiem for a golf trip which was not the topic, so I missed it (however, if I found a company that wanted to pay me perdiem to take a golf trip I might have a hard time turning it down). My comment was that if you are on a job that pays perdiem, it does not matter what other activities are involved, you still get the perdiem.

[Already Gone]

Actually it was neither.  I was referring to playing golf on days that you were supposed to be at work.  If you have Saturday and Sunday off (or any other day for that matter) you are entitled to per diem because you are spending those away from home for work related reasons.  The weekend is work related because it's more reasonable to stay over rather than go home.
It is those Fridays and Mondays that you take off to stretch the weekend that get you into trouble.  Lots of us have gotten our full week's pd when we asked for a day off.  Lots of us have gotten three days' pd docked for not showing up on Monday.  Expenses for Saturday and Sunday are not work related if they are not sandwiched between two work days.
The start of the thread was ostensibly about the expectation that per diem be paid for certain days not worked, and that some people get it when others don't.  As Mike has pointed out, they just can't give it to you.  The plan has to be accountable.  When the payee isn't accountable (i.e. can't or won't account for unexcused absences) then the plan is not accountable.  If you take time off for being sick, you are not eligible for per diem under an accountable plan unless it is only a short time that your employer excuses you during the course of a job.
People who expect to get per diem without being accountable are really asking the company to put all the other employees at risk.
So, if you are playing golf on a work day, invite the Site Coordinator and call it a business related outing or you're going to pay a little more than greens fees and dollar skins.

[halflifer]

So, if you are playing golf on a work day, invite the Site Coordinator and call it a business related outing or you're going to pay a little more than greens fees and dollar skins.

for that matter, try to recruit the club pro to work on your project.....discuss the actions being taken at your work site to protect the golfing public from the harmful effects of ionizing radiation....besides, your SC is probably playing there that day anyway (did I say that out loud?)