What Is Getting Paid Per Diem?
Getting paid per diem has two meanings. Some companies pay employees a flat rate, or daily per diem rate, for work-related travel expenses. The United States General Services Administration describes travel per diem as a daily allowance for lodging, meals and incidentals. Per diem also describes a worker who is paid a flat fee by the day for services. Temporary workers and contractors are often paid this way. Per diem workers are not regular employees and do not qualify for health insurance or other benefits offered to full-time staff. Companies use per diem workers for special projects or to increase staff size during busy times.
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Per Diem Travel
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Companies and organizations set their own rates for per diem travel. Government workers follow federal guidelines for per diem allowances. For example, the University of Washington allows traveling workers a maximum of $72 a day for meals while representing the university on out-of-town trips. Staffers are allowed up to $18 for breakfast, $21 for lunch and $32 for dinner.
Budgets
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Paying travel expenses through per diem allowances helps companies and organizations control travel expenses. Although $18 a pay for breakfast may seems generous, it is possible to spend more than that at some hotels or restaurants. Getting paid per diem for travel forces an employee to follow certain guidelines.
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Per Diem Workers
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Many per diem workers apply for temporary positions through staffing agencies. The staffing agency manages the application process, interviews the candidate and provides drug testing. The staffing agency pays the agency the per diem rate for each day worked in a pay period.
Independent Contractors
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Some independent contractors are paid directly by the client. The contractor negotiates a daily per diem rate with the company or organization and submits regular invoices. The client pays the invoice without making deductions for federal income tax withholding or Social Security.
Advantages
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Many temporary workers paid per diem enjoy the flexibility provided by temporary assignments. Also, in some instances, getting paid per diem allows the worker to earn more on a daily basis than the worker would as a full-time member of the staff. However, the down side is that per diem work is not permanent, and the contractor or temp does not receive benefits such as paid vacation, sick days or health insurance.
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