Some Important Ohio Per Diem Laws
While the GSA sets federal travel rates, private employers in Ohio must operate within the state's own legal framework for wage payment. Understanding these numbers and rules is key to staying compliant.
No State Mandate for Expense Reimbursement
Ohio law does not have a specific statute that requires private companies to reimburse employees for business-related expenses. The decision to use a per diem system or another reimbursement method is based on the employer's internal policy.
Reimbursement as "Wages" (Ohio Revised Code § 4113.15)
This is the most critical aspect of Ohio law concerning expenses. The state's wage payment statute explicitly includes "reimbursement for expenses" in its legal definition of "wages." This means that once an employer agrees to reimburse an expense (via a written or unwritten policy), that reimbursement is treated as wages owed to the employee and must be paid in a timely manner on a regular payday (at least semi-monthly as required by Ohio law).
Federal FLSA Protections and Ohio's Minimum Wage
The federal Fair Labor Standards Act (FLSA) provides a baseline of protection that works in conjunction with Ohio's own minimum wage. An employer cannot require an employee to pay for business expenses if doing so would cause their effective hourly wage to fall below the minimum wage.
- As of January 1, 2025, Ohio's minimum wage is $10.85 per hour for non-tipped employees.
- This means if an employee who makes $12.00 per hour works a 40-hour week, their gross pay is $480. If their employer required them to pay $100 for a business-related expense out-of-pocket that week, their "take-home" pay before taxes would be $380.
- This equates to an effective wage of $9.50 per hour ($380 ÷ 40 hours), which is illegal as it is below the $10.85 state minimum.
Strict Rules on Wage Deductions
Ohio law strictly controls what can be deducted from an employee's paycheck. An employer cannot unilaterally deduct the cost of a business expense without prior written authorization from the employee for that specific, lawful purpose.
Furthermore, deductions for the employer's benefit (such as for tools, equipment, or damages) are generally not permitted if they reduce an employee's wages below the $10.85 per hour minimum wage. For example, an employer cannot legally deduct the cost of fuel for a company delivery truck from an employee's paycheck if it brings their pay below this threshold.
Ohio Per Diem Laws vs Federal Law
The per diem rules for a private company employee in Ohio are fundamentally different from the GSA system that governs federal employees.
- Primary Applicability:
- Federal Law (GSA): Mandatory for all U.S. federal government employees on official business in Ohio.
- Ohio Law: Applies to private-sector employees. It does not set per diem rates but ensures that any promised reimbursements are paid as wages.
- Rate Setting and Flexibility:
- Federal Law (GSA): The GSA sets specific, non-negotiable per diem rates for various locations in Ohio that federal agencies must use.
- Ohio Law: The state does not set any rates. Private companies have full flexibility to create their own reimbursement policies. Using GSA rates is a common best practice, not a legal requirement.
- Legal Foundation:
- Federal Law (GSA): A comprehensive regulatory system designed to standardize and control government travel costs.
- Ohio Law: Relies on its wage and hour laws. The key principle is that if a company promises to reimburse an expense, that promise creates a wage obligation that is legally enforceable.
How Fyle Can Automate Per Diem and Expense Tracking
Managing travel expenses for employees traveling across Ohio—from Columbus to Cleveland to Cincinnati and beyond—requires a system that is both accurate and easy to manage. Enforcing your company's travel policy is crucial, especially when promised reimbursements are considered wages under state law. Fyle's expense management platform is designed to automate this entire process.
Fyle helps you master per diem and expense tracking for Ohio travel:
- Automated Rate Application: Fyle automatically applies the correct GSA per diem rates for any destination in Ohio. It instantly determines whether to use the rate for Columbus, Cleveland, or the standard CONUS rate, eliminating manual work and errors.
- Enforce Your Binding Policy: Because your reimbursement policy is treated as a wage agreement in Ohio, consistent enforcement is key. Build your exact rules into Fyle’s policy engine to ensure every expense is checked for compliance before it's even submitted.
- A Seamless Employee Experience: Make expense reporting effortless for your team. Employees can instantly submit expenses with a photo of a receipt from Fyle’s mobile app or by forwarding a receipt from their email, allowing them to focus on their work, not paperwork.
- Proactive Compliance Audits: Fyle’s intelligent platform acts as your first line of defense, checking every expense against your policies in real-time. This saves your finance team from manual reviews and ensures every report is compliant.
- Effortless Mileage Tracking: For travel between Ohio's major cities, Fyle’s Google Maps-powered mileage tracker provides an easy, accurate, and IRS-compliant method for logging business miles.
- Direct Accounting Integration: Fyle connects with leading accounting systems like NetSuite, QuickBooks, Xero, and Sage Intacct, ensuring all approved travel data syncs automatically to your general ledger, saving time and ensuring financial accuracy.
With Fyle, you can manage your Ohio travel expense process with confidence, ensuring you meet your policy obligations while providing a modern, hassle-free experience for your employees.