As more and more companies begin outsourcing key business functions and enlisting the help of staffing agencies to provide workers, a fissure forms in the workplace, disrupting traditional employment relationships. Without a direct employee-employer relationship, these companies oftentimes mistakenly relinquish employer responsibilities which can have an adverse impact on workers who might experience a loss of benefits, inadequate health and safety protections, and sometimes lower pay.

The Wage and Hour Division promotes compliance with a number of laws which impact almost every industry in the United States. One way to reach the 7.3 million establishments and 135 million employees covered by WHD laws in the U.S. is through planned initiatives like the one launched 2 years ago in the temporary staffing industry by the division’s New Orleans District Office. Recognizing the valuable and the important role that these employers play in today’s economy, the Wage and Hour Divisions’ Southwest and Southeast Regions began directed investigations to address concerns about the industry practice of misclassifying a portion of worker’s earnings as per diem payments.

Per Diem Pay Schemes

The investigations under the temporary staffing initiative uncovered evasive per diem schemes through which companies misclassified a portion of workers’ earnings as per diem payments. Per diem payments are compensation for living expenses incurred on behalf of the employer,…