You probably knew that business trips are an incredibly common venture in corporate America, but you may not know the staggering number of these getaways. In just one year, 463.6 million trips are undertaken by employees for business purposes.
Whether these trips are taken to make sales, attend corporate events, meet with clients, or perform training exercises, they all have one thing in common: money. No matter what happens, an employee being sent on a business trip can reasonably expect reimbursement for their undertakings there - it's only fair, after all.
But how much, exactly, should you be reimbursing them? Is per diem pay something you should be offering for weekends that an employee is on a business trip? Read on to learn what this would entail as well as some legal and ethical considerations.
What is a per diem pay?
Simply put, per diem is an amount that an employer gives to an employee to spend over a business trip. This money is intended to cover various expenses such as meals, hotel fees, and transportation. As the name suggests ('per diem' is literally Latin for 'per day.') This sum is given out on a day-to-day basis.
How is per diem paid out?
When deciding on a per diem pay for weekends, the first thing you'll likely wonder is the legal implications behind payment vs. nonpayment. The General Services Administration (GSA) sets the per diem rate for most states. You can see the rates for your country or state by merely inputting your location into their website.
While the Fair Labor Act doesn't explicitly state how much reimbursement you need to provide for travelling employees, refusing to pay can be a legal violation in many situations.
This is because the Department of Labor requires wages to be over the federal and local minimum even after expenses are paid. There are also laws regarding overtime that could be broken if you don't pay per diem. So it's best to pay up.
What are the tax rules for per diems?
Ethical considerations around per diem pay
Even without the above-mentioned legal considerations, it's essential to keep in mind how hard your traveling employees are working. Your employees work pretty much 24/7 to help achieve business goals and targets.
Traveling employees take time away from their families and daily lives for the benefit of your company. So, a little extra money will go a long way. This can even make your employees more productive since people are more motivated to work when they feel appreciated.
Is per diem paid on weekends?
The simple answer to whether or not you should provide employees with per diem pay on weekends is 'yes'. Still, you do have some leeway as an employer to decide how much money this should entail and when you will provide a payout.
Now that you know the basics of per diem pay and when you should provide it, it's time to consult the specialists. Get in touch with our experts to discuss how you can effectively manage your business expenses, including those that come with per diem pay.