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Ever wondered what "per diem" truly means, especially in California's dynamic job market? It's a term often heard, particularly in flexible work arrangements, but its implications for your compensation and legal rights can be complex under employment law.
If you're a per diem worker or considering this path, understanding these nuances is crucial to protect yourself.
This article will go over per diem in California, shedding light on its various facets and how reputable firms like MJB Law Group are dedicated to safeguarding the rights of individuals navigating this unique employment landscape.
The term per diem is Latin for “per day.” In the context of work, it typically refers to a daily allowance given to employees to cover expenses such as lodging, meals, and incidental costs, especially when traveling for work.
In some cases, it’s also used as a substitute for regular wages—especially in short-term or flexible employment situations.
Per diem pay originally focused on reimbursing employees for travel-related costs during business trips. Over time, industries began using it more broadly to compensate temporary or on-call workers without committing to a full-time salary or benefits package.
Unlike traditional hourly or salaried employees, per diem workers are only paid for the days they actually work. There are no guaranteed weekly hours or annual salaries.
This approach offers more flexibility—but also more unpredictability. While salaried workers receive consistent paychecks, per diem workers may earn more per day but face periods without work.
Some fields rely on per diem structures more than others. It’s especially popular where flexible staffing is a necessity.
Hospitals and clinics often face fluctuating demands. To manage this, they bring in per diem nurses and allied health professionals to fill staffing gaps.
Travel nurses, for instance, receive per diem pay to cover lodging and meals when working in different locations across the state.
Construction companies regularly employ per diem workers, particularly when projects require relocating staff temporarily.
Workers like welders, electricians, and pipefitters may be paid per diem rates to offset travel and living expenses away from home.
School districts rely heavily on substitute teachers, paying them on a per diem basis. These roles are inherently short-term, making daily compensation practical and easier to manage within budget constraints.
Creative professionals, consultants, and tech freelancers are often hired for one-day gigs or short-term contracts.
In these scenarios, per diem pay structures help employers avoid the complexity of ongoing payroll while giving the worker flexibility.
California law adds its own flavor to how per diem structures are handled.
In California, per diem can either mean a flat daily wage for a day's work or a reimbursement for out-of-pocket expenses. It’s essential to differentiate between these, as reimbursements may be tax-free while wages are not.
Some employers offer a standard daily amount regardless of hours worked, while others adjust the pay based on time, location, or job complexity. Workers should review these policies carefully to avoid surprises in their take-home pay.
While some per diem payments are considered non-taxable reimbursements, others count as taxable wages. If the amounts exceed IRS guidelines or lack adequate records, they may be subject to both federal and California state income taxes.
Per diem doesn’t mean “no protection.” California employment laws still apply in many situations.
The Labor Code applies to most employees—regardless of whether they’re full-time, part-time, or per diem. If a per diem worker is legally an employee, they’re entitled to basic rights like minimum wage and protections against discrimination or harassment.
Even if you’re hired per diem, if you work more than 8 hours in a day or 40 in a week, you may qualify for overtime pay under California law. This is often overlooked and can result in underpayment.
All non-exempt workers in California, including per diem employees, are entitled to rest breaks and meal periods. Skipping these can lead to legal consequences for the employer.
Typically, per diem employees aren’t given benefits. However, if they work a certain number of hours consistently, they might qualify for health benefits, sick leave, or retirement plans—depending on the employer’s policies and applicable laws.
Mislabeling workers as independent contractors to avoid paying benefits or overtime? That’s a legal red flag in California.
California’s ABC test determines if a worker is an employee or an independent contractor. Many per diem workers mistakenly assume they’re independent when, legally, they should be classified as employees.
Employers who misclassify workers face fines, back pay obligations, and even civil lawsuits. Workers have the right to file complaints or lawsuits if they suspect they’ve been misclassified, and firms like MJB Law Group can provide legal guidance in such situations.
Do you follow specific company hours? Use their tools? Get performance reviews? These are signs you might be an employee, even if you’re paid per diem.
Not all per diem money is tax-free. Here's what to know.
The IRS sets daily per diem limits for meals and lodging. If your employer pays more than the allowable rate—or doesn’t require receipts—the extra amount becomes taxable. California generally aligns with these rules.
If properly documented, per diem reimbursements are non-taxable. However, anything treated as wages must be reported as income and is subject to tax withholding.
Detailed logs, receipts, and travel records are essential. They protect both the employer and employee from audits and tax issues.
What you can claim (or be paid) depends on location and type of expense.
The U.S. General Services Administration (GSA) sets daily maximums for lodging and meals across California. For example, San Diego has higher lodging rates than Bakersfield due to cost-of-living differences.
| City | Lodging Rate | Meals & Incidentals |
| Los Angeles | $182 | $74 |
| San Diego | $199 | $76 |
| Fresno | $128 | $64 |
Business-related costs like hotel stays, meals, and gas may be reimbursable. Personal expenses like entertainment, laundry, or alcohol typically are not.
Most employers use GSA rates as benchmarks. Some pay a flat daily amount, others reimburse exact costs. Ask your employer for their travel expense policy.
Let’s weigh the pros and cons—because it’s not all sunshine and rain.
Per diem workers often enjoy control over their schedules, working only when they want to. This suits parents, students, and semi-retirees especially well.
There’s a flip side. No work guarantees mean inconsistent income. You could work five days one week—and none the next.
While the daily rate may be high, frequent cancellations or shift changes can result in unstable income. Budgeting becomes more difficult without a steady paycheck.
Employers can’t cut corners just because someone is per diem.
Employers must maintain clear records of hours worked, pay rates, and dates. This helps in resolving disputes and complying with labor regulations.
Clear guidelines about how per diem pay is calculated, when it applies, and what expenses are covered should be provided in writing.
Regular audits and legal reviews help companies avoid violations—and expensive lawsuits. Per diem staff should be treated fairly and legally.
If you’re navigating the maze of per diem pay and employment laws, MJB Law Group is your ally. We’re a boutique litigation firm based in California that focuses exclusively on employment and personal injury law. We are located at 1442 Irvine Boulevard, Suite 201, Tustin, CA 92780.
We're open Monday through Friday from 8:30 AM to 5:30 PM, and we're closed on Saturdays and Sundays. Our lawyers understand the complexities of per diem work—and fight tirelessly against corporations and insurers who take advantage of it.
With a personalized, compassionate approach, MJB Law Group treats you like more than a case number. We’ll listen to your story, explain your rights, and fight for what you deserve. Contact and schedule a consultation today.
Per Diem in California is more than just a paycheck structure—it’s a legal, financial, and personal choice. While the flexibility it offers can be appealing, it also comes with challenges like income unpredictability, tax implications, and potential misclassification.
Understanding how California labor laws interact with per diem work is essential. And if you're unsure about your rights or think you’ve been misclassified, reaching out to MJB Law Group might be the smartest move you can make.
Usually not. Since many per diem jobs don’t deduct unemployment insurance, those earnings may not count unless treated as regular wages.
Possibly. If the worker meets the hour threshold under California’s sick leave law, they can earn and use paid sick time.
Yes. If classified as employees, per diem workers have the same rights against wrongful termination as regular employees.
If they’re employees and not contractors, then yes—they’re entitled to workers’ comp if injured on the job.
That depends on your contract and classification. Independent contractors have more freedom, while employees may face consequences.
