Industry NewsWhen Per Diem Allowances Decrease, Hoteliers Pay

When Per Diem Allowances Decrease, Hoteliers Pay

We ask a lot of the active-duty service members and federal workers who support our armed forces. These men and women defend our way of life and work, sometimes for months, far away from their homes, family, and friends. With so much already on their shoulders, service members traveling on assignment should not be expected to dig into their own pockets to secure decent lodging and pay for a meal.
But that is exactly the situation many service men and women find themselves in.

It all started with a misguided attempt by the Department of Defense (DOD) to save money. In 2014, the DOD enacted a policy that altered the per diem allowance for long-term temporary duty (TDY) workers. Instead of helping to reduce costs, this policy passes the burden of finding affordable lodging on to the backs of individual employees, rather than the department or service for which they work.

Take for example the more than 3,000 workers from Puget Sound Naval Shipyard in Bremerton, Wash., who were assigned elsewhere for repairs on aircraft carriers last year. In the past, the per diem for food and lodging covered 100 percent of the cost for these people. Under the new DOD policy, per diem allowances were reduced by 25 percent for periods longer than 30 days and 45 percent for those lasting longer than 180 days. So, if you are working away from home for less than a month you would not see a change, but the longer you are away, the smaller your reimbursement.

Many of the service people I represent are seeing significant reductions this year, making it harder to find a reasonable place to sleep and taking business away from the hotels where they usually stay. This negatively impacts service members, civilian defense workers, and the hotels and restaurants that serve defense communities.

I firmly believe that we can improve the capability of our military while saving taxpayer money. But this DOD policy will fail to accomplish that goal. Only saving approximately $22 million a year, this policy will do far more harm than good in the long run. When confronted with the choice of paying out-of-pocket for an assignment or not going, fewer workers will volunteer for critical work. According to the Naval Sea Systems Command, which oversees our Navy’s four public shipyards, that means experienced employees will be less likely to sign up. Without veteran workers, the Command reports that maintenance periods will be extended, morale will plummet, and maintenance costs will soar. In the end, the readiness of our Navy will suffer, along with our national security.

This also damages the places our workers stay. Over the years, hotels in states like California, Hawaii, and Washington have opened near military installations to house personnel on long-term temporary duty assignment. In fact, many of these businesses already offer lower rates to men and women traveling for work on defense projects to match the per diem rates. That was before the DOD enacted this new policy. Now, many hoteliers are faced with matching the new rates and losing money and customers in the process.

Our civilian defense workers and service members—as well as the businesses that support them—are not getting the support and respect they deserve. They have been through a government shutdown that put paychecks in limbo and across-the-board spending cuts that took an axe to the budget rather than paring it down strategically. It doesn’t make sense to continue to burden our workers and our hotel industry with an unfair per diem policy.

That’s why in 2014, I put together a bipartisan group of members that called on the DOD to not implement this policy. After the policy went into practice, I introduced bipartisan legislation to restore this crucial compensation to our workforce. Last year, a provision in the House of Representative’s version of the National Defense Authorization Act included language that matched our bill. While it didn’t make it into the final version signed by the President, we will keep at it. We need to end this harmful policy because these folks, travel businesses, and, most-of-all, our military, deserve better.

About the Author
Congressman Derek Kilmer has been the representative for Washington’s 6th congressional district since Jan. 3, 2013.