Can my company keep the per diem the customer is paying?

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Can my company keep the per diem the customer is paying?

We have been entitled to 70 per diem per day

since we have been working. we travel back

and forth to work place about 200 miles

everyday, when it gets really late we stay and

get a hotel when we do this the customer pays

150 perdiem. Recently our company has

decided to pay us travel time instead of giving

us perdiem, this is bad for us because the

travel time is less than the perdiem and it is

taxable unlike the perdiem we were receiving

witch was non taxable. Our company keeps

billing the customer for our perdiem but does

not pay it to us. Is this legal?

Asked on May 19, 2016 under Employment Labor Law, California


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

An employer's contractual pay arrangement with an outside entity has nothing to do with an employee's compensation. So in this case, the fact that your employer is recieving a per diem from a customer does not mean that you should be receiving this amount. In an "at will" employment relationship, a company can set the conditions of employment much as it sees fit, including how much an employee is paid (subject to minimum wage laws). This is true unless such an action violates the terms of any applicable agreement (i.e. a union or employment contract, company policy,etc.). Also, the employee's treatment must not constitute some form of legally actionable discrimination (which it does not appear to).

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

Yes, it is perfectly legal. Your company's contractual or billing arrangements with the customer has nothing to do with what they pay you. They can bill the customer anything they want (including a per diem) and then pay their employees whatever they want; receiving a per diem from the customer does not mean they have to pass it on to you. 

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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