Most workers who receive a ‘per diem’ in addition to their hourly pay are actually entitled to overtime pay at a higher rate. Per diem workers, employees that are generally hired for short or long term contracts through staffing and support service companies, play a valuable and legitimate role in today’s economy. When companies have large laborious projects that must be completed during a specific time frame and do not have enough workers in house they may choose to hire contracted workers through labor recruiting and staffing agencies.
These hired temporary laborers will usually travel to the remote job sites and be given a per diem stipend to spend on costs, like meals and lodging, incurred during their stay. In addition to their per diem rate, these workers are also paid an hourly rate. If a per diem laborer works more than forty hours in one week they must be paid over time.
Many ongoing investigations within the temporary staffing industry have revealed several evasive pay practices. The Fair Labor Standard’s Act (FLSA) requires that hourly employees who work over forty hours per week be paid overtime least one-and-a half times their “regular rate” of pay. Companies have allegedly been wrongly labeling part of the worker’s regular hourly wage a “per diem” and excluded the per diem when calculating the rate for overtime, thus depriving them of overtime pay.
Although employers are allowed to separate the per diem pay from the hourly rate when calculating overtime, they must meet certain requirements for doing so such as documenting expense reports and making sure the per diem pay is equal to or less than the federal per diem rate. In many cases of these alleged wage violations, the companies were not meeting these requirements and manipulating the per diem pay in such a way that their calculation was cheating workers of significant overtime pay.
The Department of Labor (DOL) and employment law firms have caught wind of this per diem scheme and investigations, lawsuits and settlements have already had success in recovering unpaid overtime for some of the industries hardest workers. Findings show that per diem wage issues are especially prevalent for job positions like welders, steel fabricators and scaffold builders. Common industries that employ per diem workers include construction companies, oilfield services, and maritime fabrication facilities. Some notable recoveries for per diem workers can be found below:
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