Per diems in the transport sector are a significant part of work organization and employee costs, so any regulatory change has a direct impact on the daily operations of companies. “It is important for carriers not only to know that the rules are changing from October but also to understand how they will affect the actual work organization. In the transport sector, per diems are not just an administrative issue – it is a system applied daily to hundreds or even thousands of trips. Therefore, the most important thing now is to assess your practice and prepare for changes before they come into effect,” says Egidijus Langys, managing partner at Avocad.
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Avocad lawyer Viktorija Dubovskienė points out that before October, carriers should not only familiarize themselves with the new rules but also review the internal documents in companies and the actual practice of setting per diems. “The topic of per diems is not new to carriers, but in practice, we still see situations where companies leave too much discretion to the decision-making manager or responsible person in their internal documents. It is precisely such vague rules that can become a problem in case of a dispute,” says V. Dubovskienė.
Before October, it is not enough to comply with the minimum limit
According to the current procedure, the employer can pay per diems lower than the maximum set by the Government, but such reduction must be properly established in the company’s documents.
It is important that simply setting the minimum allowable per diem limit is not enough. Lower amounts must be specific, and their application must be justified by objective circumstances.
In court practice, reducing per diems is primarily associated with their purpose – to compensate for additional employee expenses during a business trip. Therefore, safer criteria are those that actually reduce such employee expenses, for example, meals, accommodation, or other business trip conditions provided or paid for by the employer.
On the other hand, linking the amount of per diems to the employee’s length of service, work quality, violations committed, damage, or other employee performance evaluation criteria is much riskier. “Per diems should not become a means of encouraging or disciplining the employee. If a lower amount is set simply because the employer is dissatisfied with the driver’s work results or a violation committed, there is a risk that such reduction will be deemed unjustified,” notes V. Dubovskienė.
It is also problematic when company rules set a wide range of possible per diem amounts, and the specific amount is chosen at the discretion of the manager or responsible person after the business trip. The employee must be clearly informed in advance about the amount of per diem they are entitled to and what this amount depends on.
From October – a simpler but more strictly defined system
From October 1, the per diem reduction system will change. Since the new rules are only coming into effect, there is no court practice on their application yet, but the regulation itself sets clearer limits for employers.
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In companies with a collective agreement, it will still be possible to agree on lower per diems, provided the minimum limits set by law are observed.
For companies without a collective agreement, the duration of the business trip will be important. Per diems cannot be reduced for shorter trips, but a reduced amount can be applied for longer trips, provided the established minimum limit is respected. “The new procedure will be somewhat simpler for the employer because the need to create complex per diem reduction criteria systems will decrease. However, there is also a very clear obligation to decide in advance what amount of per diem will be paid during a specific business trip,” explains V. Dubovskienė.
The driver will have to know the per diem amount before departure
One of the most important practical changes is employee notification. If the employee is to be paid less than the maximum per diem, they must be informed in writing about the specific amount set for the business trip before it begins. This means carriers will have to abandon the practice where the driver leaves for a trip without knowing the final per diem amount, which is determined later based on their work results or other circumstances. From October, there will also be a separate rule for very short first or last days of a business trip – in such cases, only part of the set per diem amount will be paid.
According to E. Langys, practical preparation should currently be the most important task for carriers. “September should be a preparation month for transport companies. Waiting for the first disputes or inspections and only then changing internal rules would be the most expensive path. It is much safer now to assess whether the company’s documents, employee notification process, and actual practice will comply with the new regulation,” emphasizes the managing partner of Avocad.
What should carriers do now?
According to V. Dubovskienė, in September, transport companies should first review the existing per diem payment rules. Special attention should be paid to vague formulations that allow setting the per diem amount “at the employer’s discretion,” taking into account “work quality,” “violations committed,” or other subjectively assessed criteria.
At the same time, companies should prepare for the new procedure effective from October and provide a simple mechanism for informing the driver in writing about the per diem amount applicable to them before departure. “We would recommend carriers to view this change not as just another document correction. It is a good opportunity to organize the entire per diem setting process so that it is uniform, clear, and as little dependent as possible on the individual manager’s decision. The simpler and more transparent the system, the lower the risk of disputes for both the employer and the employee,” says Avocad lawyer Viktorija Dubovskienė.
The new procedure should provide more clarity for carriers but will also require preparation in advance. Therefore, companies that apply per diems lower than the maximum should consider September a suitable time to review internal rules and prepare for their changes from October 1.
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