Per Diem Issues

[SMB1911]

I am a federal contractor currently out of town for work. My company is obligated by federal regulation to pay for lodging and rental car per receipts as well as meals and incidentals at a flat daily rate set by the federal government. The lodging and car go on my corporate credit card which I am supposed to pay after I receive the funds from my company. All of the funds are supposed to come directly to me.

For whatever reason, they continually fall behind in paying me. They then withhold all of my per diem, including the portion for my meals. Normally I would receive it on Friday. They tell me if I pay my corporate card out of pocket by Monday, they'll pay me. Which I refuse to do. They then sit on my money and pay it the next week.

The initial issue was at the very beginning of this trip and it was 5 or 6 weeks before I received a payment. They sent the lump sum including my portion to pay for food. Then it was OK for a month or so and now it's back to the usual mess. This last occurrence was on Friday the 7th of Aug. They owed me for one week in June and 2 weeks in July. They sent it straight to my corporate card again.

I'm not starving and can afford my meals. It's a matter of principal for me. Some of the other employees at my company make considerably less than me and it can have a negative affect on their finances.

Is this practice legitimate? Thank you.

 

[Just Blue]

I am a federal contractor currently out of town for work. My company is obligated by federal regulation to pay for lodging and rental car per receipts as well as meals and incidentals at a flat daily rate set by the federal government. The lodging and car go on my corporate credit card which I am supposed to pay after I receive the funds from my company. All of the funds are supposed to come directly to me.

For whatever reason, they continually fall behind in paying me. They then withhold all of my per diem, including the portion for my meals. Normally I would receive it on Friday. They tell me if I pay my corporate card out of pocket by Monday, they'll pay me. Which I refuse to do. They then sit on my money and pay it the next week.

The initial issue was at the very beginning of this trip and it was 5 or 6 weeks before I received a payment. They sent the lump sum including my portion to pay for food. Then it was OK for a month or so and now it's back to the usual mess. This last occurrence was on Friday the 7th of Aug. They owed me for one week in June and 2 weeks in July. They sent it straight to my corporate card again.

I'm not starving and can afford my meals. It's a matter of principal for me. Some of the other employees at my company make considerably less than me and it can have a negative affect on their finances.

Is this practice legitimate? Thank you.

What state? (required information)

 

[Taxing Matters]

I am a federal contractor currently out of town for work. My company is obligated by federal regulation to pay for lodging and rental car per receipts as well as meals and incidentals at a flat daily rate set by the federal government.

The rules can vary a bit depending on the particular agency your employer is contracting for. There are a huge number of federal statutes that relate to federal government contracting that cover various agencies and Departments. While many of them refer to the same basic standards for federal contracting, some are different. However, in most cases the way it works is that the federal agency is required to put in their contracts with the contractor the pay requirements it must meet. In other words the company isn't bound directly by the federal regulation; rather, the company is bound by the contract it has with the agency. If you aren't being paid correctly, your remedies start with complaining to the agency that contracted with your employer and/or the U.S. Department of Labor, Wage and Hour Division (WHD). That said, my guess is that delays in reimbursing travel expenses of a few days or even a few weeks might not get much action. More egregious violations would get more attention. The process is likely to be slow. WHD gets a lot of complaints and its budget has been stagnant for years, limiting what it is able to do.

 

[LdiJ]

I am a federal contractor currently out of town for work. My company is obligated by federal regulation to pay for lodging and rental car per receipts as well as meals and incidentals at a flat daily rate set by the federal government. The lodging and car go on my corporate credit card which I am supposed to pay after I receive the funds from my company. All of the funds are supposed to come directly to me.

For whatever reason, they continually fall behind in paying me. They then withhold all of my per diem, including the portion for my meals. Normally I would receive it on Friday. They tell me if I pay my corporate card out of pocket by Monday, they'll pay me. Which I refuse to do. They then sit on my money and pay it the next week.

The initial issue was at the very beginning of this trip and it was 5 or 6 weeks before I received a payment. They sent the lump sum including my portion to pay for food. Then it was OK for a month or so and now it's back to the usual mess. This last occurrence was on Friday the 7th of Aug. They owed me for one week in June and 2 weeks in July. They sent it straight to my corporate card again.

I'm not starving and can afford my meals. It's a matter of principal for me. Some of the other employees at my company make considerably less than me and it can have a negative affect on their finances.

Is this practice legitimate? Thank you.

I am a little confused.

Are we talking about an actual corporate credit card, where the company is liable for the balance due on the card rather than you? If that is the case, the norm would be for the company to pay the credit card directly and settle any differences with you, based on your expense reports and/or per diem. How do you pay for your meals? Do you pay for them yourself and then get reimbursed by your per diem, or do you also include them on the company card?

If you don't pay your meals and incidentals with the company card, then it would not be appropriate for them to pay your meals and incidentals per diem to the company card.

 

[SMB1911]

The state is Virginia.

The agency is the Navy.

The issue is they are taking our per diem for food and incidentals and applying it to our credit cards. We aren't getting it at all until the end of this trip, after we're home.

 

[SMB1911]

I am a little confused.

Are we talking about an actual corporate credit card, where the company is liable for the balance due on the card rather than you? If that is the case, the norm would be for the company to pay the credit card directly and settle any differences with you, based on your expense reports and/or per diem. How do you pay for your meals? Do you pay for them yourself and then get reimbursed by your per diem, or do you also include them on the company card?

If you don't pay your meals and incidentals with the company card, then it would not be appropriate for them to pay your meals and incidentals per diem to the company card.

This is an actual corporate card, as in it says "Corporate" in the logo of the card. It is not on my credit report but I'm not sure about the liability issue. The card is issued to me, with my name stamped in it. I am responsible for paying the bill. I'm supposed to be paid everything, based on my expense reports. Airfare, taxis, lodging, rental cars and ODC's all go on it. I can, if I choose, use it for food and gas. I choose not to. Airfare, lodging and rental car are all I put on it. Those are the only variables.

I pay for my groceries/meals and even my gas out of pocket. The per diem for meals is a flat daily rate I should be paid, regardless of anything else.

Edited to add: The expense reports are turned in on time, complete, in the proper format, etc. I am sure of this because I handle them for me and my team.

And thank you all for your help.

 

[LdiJ]

This is an actual corporate card. It is not on my credit report but I'm not sure about the liability issue. The card is issued to me, in my name. I am responsible for paying the bill. I'm supposed to be paid everything, based on my expense reports. Airfare, taxis, lodging, rental cars and ODC's all go on it. I can, if I choose, use it for food and gas. I choose not to. Airfare, lodging and rental car are all I put on it.

I pay for my groceries/meals and even my gas out of pocket.

I am going to guess that the company is ultimately responsible for the card. I am also going to guess that they monitor the payments due on the card and if you are not paying the card when the balance is due, that they then pay it directly to protect the company's credit. I also understand that they might not be reimbursing you promptly so that you can pay the card promptly.

Perhaps you should go ahead and use the corporate card for food and gas since this is happening and you are allowed to do so. You will just have to keep track of your food and incidentals purchases so that you can pay the card yourself for anything in excess of your per diem.

 

[Stephen1]

I am going to guess that the company is ultimately responsible for the card. I am also going to guess that they monitor the payments due on the card and if you are not paying the card when the balance is due, that they then pay it directly to protect the company's credit. I also understand that they might not be reimbursing you promptly so that you can pay the card promptly.

Perhaps you should go ahead and use the corporate card for food and gas since this is happening and you are allowed to do so. You will just have to keep track of your food and incidentals purchases so that you can pay the card yourself for anything in excess of your per diem.

I'm assuming that OPs "corporate" card is similar to the "government" card that I had while on active duty with the military. The card had my name on it and I was 100% responsible for paying any charges independent of when/whether I got reimbursed. If I didn't pay on time (for example, when my reimbursement was delayed) the government did not step in and pay it but I got in trouble with my bosses. I've heard this complaint before. "Why should I pay when I haven't been reimbursed?" "Why should I get into trouble for not paying/late paying when it is based upon when I actually got reimbursed?"

 

[LdiJ]

I'm assuming that OPs "corporate" card is similar to the "government" card that I had while on active duty with the military. The card had my name on it and I was 100% responsible for paying any charges independent of when/whether I got reimbursed. If I didn't pay on time (for example, when my reimbursement was delayed) the government did not step in and pay it but I got in trouble with my bosses. I've heard this complaint before. "Why should I pay when I haven't been reimbursed?" "Why should I get into trouble for not paying/late paying when it is based upon when I actually got reimbursed?"

I can understand the government deciding not to step in and pay it, there is too much bureaucracy in the government that allows for no flexibility at all. However, the company that the OP works for, while a contractor to the government, is still a private company whose credit is going to be important to them, since they HAVE been stepping in and sending the OP's per diem directly to the card.

 

[FlyingRon]

Yep, I refused to carry one of the government cards when I was with the Army. It was just a liability. It made sense for guys who couldn't get their own I guess. The Army used it as an excuse NOT to give out full travel advances anymore. It was a massive screwage just to allow them to float the money for a month.

My wife had a government card that did bill direct to the government, but she had a mass of paperwork to fill out every time she used it to justify each purchase.

Ages ago, I worked for a defense contractor where the card was entirely handled by them. I just had to initial the statements when they came in to show that they were company business.

 

[Taxing Matters]

When I was at IRS I had a government credit card. The government would pay it eventually if the employee didn't, but the agency made it clear that if the employee didn't pay the bill timely his/her job was in jeopardy. It wasn't just the Army, civilian agencies too limited travel advances by pointing to the ability to use the card instead. It wasn't done so much for the float; agencies aren't getting interest on that money, it's the Treasury that benefits. But agencies do save money in admin costs when employees aren't asking for travel advances. That was the main motivation from the agency's perspective. I'd have used the government's card except that I could use mine instead and by using mine I got the card rewards for the purchases that I'd not have received with the government's card.

But the OP's problem is with timely travel reimbursement and not so much the card itself.

 

[FlyingRon]

I don't think it saved them any administrative cost to lower the travel advance from 100% to 40%.

 

[Taxing Matters]

I don't think it saved them any administrative cost to lower the travel advance from 100% to 40%.

That wouldn't save admin costs. But my agency's decision to not to do travel advances at all for a variety of expenses that could be put on the card certainly did. Less travel advance requests = less admin costs.