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9th Circ. Per Diem Ruling Clarifies OT Obligations, Attys Say

Law360 - Daniela Porat

A health care staffing company's recent bid to pursue high court review of a Ninth Circuit ruling on when per diems factor into overtime pay elicits some key takeaways, including that while per diems should be closely tied to actual expenses they can still vary based on hours worked, attorneys say.

With an eye on a U.S. Supreme Court review petition, AMN Services LLC last week asked the Ninth Circuit to stay a panel's unanimous February ruling that the company had wrongly excluded per diem payments from traveling clinicians' regular pay because the per diems functioned more like compensation than expense reimbursements.

Companies provide per diems to workers typically to cover travel expenses, such as meals and lodging, rather than reimbursing them per individual receipt or requiring them to front any such costs.

Although the appellate panel's decision doesn't upend things, it still clarifies the distinction between pay for hours worked versus a benefit for costs incurred by an employee, said Moira Heiges-Goepfert, an attorney at worker-side firm Outten & Golden LLP.

"I think it's a well-reasoned decision that falls comfortably within precedent," Heiges-Goepfert said.

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The way AMN Services LLC set up its per diem benefit structure made those payments seem more like incentives for attendance and working more instead of payments purely associated with travel or costs incurred, said Heiges-Goepfert, the Outten & Golden attorney.

By deducting per diems for missed shifts regardless of the reason and paying them regardless of whether expenses were actually incurred, among other practices, the company recast the per diem as wages for hours worked, the panel concluded.

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