California Decision: Per Diem Payments Are Wages

In a significant court decision in California, it has been affirmed that per diem payments made to workers are to be used in computing Workers Comp premium charges. In ReadyLink Healthcare, Inc. v. State Compensation Insurance Fund, the Ninth Circuit Court of Appeals let stand an earlier decision that held per diem payments to wages, for purposes of calculating California Workers Compensation insurance premiums.

The per diem payments in this case were not tied to particular expenses of workers, but were instead a flat daily amount.

It should be noted that this ruling pertains only to California, where a separate rating bureau operates with its own unique manual of rules governing Workers Compensation insurance premium calculation. In most other states, the NCCI manual of rules would govern. NCCI rules in most states allow for the exclusion of per diem reimbursements from premium calculations, subject to some limitations.