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Per Diems – Vexing Part of Average Weekly Wage – One Easy Fix


The Vexing Part of Workers Comp -Average Weekly Wages – Per Diems – Easy Fix

I was reading an article written by John Kamin, Attorney on his blog concerning per diems.  Even though

the article and case were on California claims, two of the article’s conclusions rang very true –

–  When evaluating whether to include a per diem in an AWW calculation, ask yourself, “Was this an overly beneficial per diem? Was it more than the average person would spend?”

–   If “yes,” then it should be included in the AWW. If “no,” or if it’s just a strict reimbursement of costs, then it should not be factored into the AWW calculations.

picture of cash workers comp per diems rates
Public Domain – Wikimedia

Per Diems – Not Overly Beneficial

Many companies have removed their expense reimbursement structures and substituted these rates.  Truck drivers have long used per diem rates.   The Internal Revenue Service has a great website for information.

From IRS Publication 535 –

The employee has to use the GSA per diem rates for each city which can be burdensome.  The high-low method keeps overly beneficial rates of reimbursement from occurring even though the rates may seem low for certain areas.


High-low method. This is a simplified method of figuring the federal per diem rate for travel within the continental United States. It eliminates the need to keep a current list of the per diem rate for each city.

Under the high-low method, the per diem amount for travel during January through September of 2021 is $292 ($71 for M&IE) for certain high-cost locations. All other areas have amper diem amount of $198 ($60 for M&IE). The
high-cost localities eligible for the higher per diem amount under the high-low method are listed in Notice 2020-71, available at IRS.gov/irb/2020-40_IRB#NOT-2020-71.

Effective October 1, 2021, the per diem rate for high-cost locations increased to $296 ($74for M&IE). The rate for all other locations increased to $202 ($64 for M&IE). For October, November, and December 2021, you can either
continue to use the rates described in the preceding paragraph or change to the new rates. However, you must use the same rate for all employees reimbursed under the high-low method.


These rates would not be overly-beneficial as they are the rates supplied by the IRS.   The M&IE rates are for meals and incidental expenses if the lodging rates are not considered in the reimbursement.  They may seem low, but they will make the idea of reimbursements much easier and not have to worry about them being overly beneficial to the employee.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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