I get a lot of questions from individuals regarding per diem payments received from their employers, with the per diem amounts showing up in their income on their W-2s. Excess per diem is considered to be taxable wages to the employee. The specific rules are very long, and I will not go into them here. However, I will point you to the proper IRS publication where the rules are spelled out in detail. The publication is IRS Publication 463 (dated 2013), and can be found here: http://www.irs.gov/publications/p463/ch06.html.
The above link covers accountable plans but also covers per diem payments and when these payments may be taxable to the employee.