Do we have to pay employees a per diem when they travel?

California law does not set a fixed per diem for employees who travel on behalf of a company. Under Labor Code section 2802, employers must reimburse employees for all necessary expenses incurred while performing their duties, including meals and lodging.

Employers can either:

• Pay a daily per diem to cover meals and lodging, or
• Reimburse employees for actual expenses submitted with receipts, up to reasonable limits.

A clear expense reimbursement policy should outline how to claim expenses, submission deadlines and prior approval requirements. Deadlines cannot be used to withhold reimbursement,