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Per Diem
Benefits & Compensation
Per Diem
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
A candidate for a hard to fill position asked us to pay part of his salary as a per diem. Is this legal and/or advisable?
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Per Diem

posted at 11/2/2010 11:28 AM EDT
Posts: 58
First: 12/1/2006
Last: 9/2/2011
A candidate for a hard to fill position asked us to pay part of his salary as a per diem. Is this legal and/or advisable?
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Per Diem

posted at 11/3/2010 3:15 AM EDT
Posts: 1771
First: 10/24/2002
Last: 9/14/2011
I think you'd be sliding down a slippery slope towards a misclassified IC situation. If I were you, I'd just say no.
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Per Diem

posted at 11/3/2010 6:52 AM EDT
Posts: 2146
First: 2/15/2006
Last: 9/14/2011
I'd want to know WHY first? What is he wanting to accomplish? Is he trying to hide $ from a creditor/garnishment/IRS/exwife? Not real ethical and I am not sure I would want to hire someone who asked this.

"per diem" just means a daily payment. Is he asking to be paid that amount out of AR/AP/accounting rather than Payroll? If so, the IRS will not take too kindly to an employee getting both a W-2 and a 1099. And I agree with hrbth that I would be unwilling to do so. You could end up owing back taxes on that 1099 income because it is wages!

Plus if he is exempt you would have the issue of making sure he is making the minimum salary ($455 a week federally, possibly more depending on your state).

Under IC rules and tests, is he going to be doing the same job for other clients? Does he own another company? Is he able to work for your competitors without your approval? And honestly, you should not have a person as an IC doing the very same job as an employee. And it would be hard to separate the two since he is the same person!

The whole thing does not pass the smell test.
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Per Diem

posted at 11/4/2010 6:53 AM EDT
Posts: 1771
First: 10/24/2002
Last: 9/14/2011
I agree. If a candidate asked me for this, I'd probably withdraw the job offer, just because the request was made.
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