Can my company keep a portion of my per diem plus meals and incidentals?

UPDATED: Sep 11, 2011

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Can my company keep a portion of my per diem plus meals and incidentals?

I work for a company the does contract work for the government. Parts of their contract is per diem for installation labor. We only receive part of that per diem and it appears that the company keeps the difference. Is this a standard practice and/or is this legal? Should we be entitled to the full per diem and the meals and incidentals? I live in CO but my company is based in FL.

Asked on September 11, 2011 under Employment Labor Law, Colorado


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The issue is probably more a function of the contract and how the per diem is accounted for anything else. For example, say that the company's contract says that, in addition to their other compensation, they receive $50 per day per employee to cover any and all costs and expenses. In that case, they get the flat $50 and then decide, based on their own policies, etc., how to compensate the employees. That would be legal. On the other hand, if they are submitting invoices (or the equivalent) for what they claim are actual employee costs--i.e. under the contract, they are reimbursed for the expenses which they reimburse their staff--but then withholding some of that money, they'd be committing breach of contract and fraud.

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