Professionals seeking work arrangements outside of traditional full-time or part-time contracts often question whether PRN and Per Diem are the same. These terms are frequently used interchangeably, especially in healthcare, to describe a specific type of non-regular, non-benefited employment. Both arrangements mean the employee works only when the employer has a need. Understanding the distinction is important because it affects paycheck structure and legal classification. The primary difference lies in the Latin roots of each phrase, emphasizing either scheduling or compensation.
Understanding PRN: The “As-Needed” Schedule
PRN is an abbreviation for the Latin phrase Pro Re Nata, which translates to “as the circumstance arises.” This meaning informs the scheduling model associated with PRN roles. A PRN position is fundamentally tied to the employer’s fluctuating need for staffing, such as unexpected absences or spikes in demand.
This model allows facilities to manage unpredictable labor demands without over-staffing their permanent payroll. For the employee, the arrangement offers maximal flexibility in setting their schedule, which is attractive for those balancing work with education or other careers. Most PRN contracts require the employee to work a minimum number of shifts within a defined period, such as four shifts per month, to maintain active status.
Understanding Per Diem: The Daily Pay Structure
Per Diem is a Latin phrase translating literally to “by the day.” When applied to a job classification, the term focuses specifically on the compensation structure. The employee is paid a daily or hourly rate for the work performed.
Compensation is transactional, covering only the hours worked without including the accrual of paid time off or employer-sponsored benefits. This term is separate from the use of per diem to describe a daily allowance for travel expenses. The daily pay model is a direct trade-off for the higher hourly rate offered to compensate the worker for the absence of a benefits package.
Where the Terms Overlap and Diverge
In practice, most employers, particularly in healthcare, use PRN and Per Diem synonymously to describe the same flexible, non-benefited employment category. The contractual reality for the worker is often identical regardless of the term used. Both are used for positions that cover staffing gaps, allow employees to choose shifts, and offer a higher hourly wage than benefited counterparts.
The subtle divergence lies in the emphasis of the original Latin meanings. PRN focuses on the reason for the work—that it is “as-needed” to meet operational requirements. Conversely, Per Diem highlights the method of compensation—that the employee is paid “by the day” without an accompanying benefits package. A facility might refer to its internal float pool as PRN to stress the scheduling flexibility, yet the job posting will confirm the Per Diem compensation structure.
The Flexibility and Financial Perks
The primary advantage for an employee accepting a PRN or Per Diem role is the significant increase in hourly pay. These positions typically offer a premium hourly rate, often exceeding the pay of a full-time benefited staff member by 25% to 40%. Employers can offer this elevated wage because they are not contributing to the cost of health insurance, paid time off, or retirement matching.
This higher compensation is coupled with the advantage of schedule control. Employees choose when they want to work, allowing them to manage their work-life balance or work around family obligations. This control allows the worker to create a customized work calendar, maximizing income when convenient. Working in diverse settings also provides an opportunity to broaden experience and skill sets without long-term commitment.
The Trade-Offs: Guaranteed Hours and Benefits
The primary trade-off for enhanced flexibility and higher hourly rate is the absence of guaranteed hours, resulting in fluctuating income. Since these roles are based entirely on the employer’s need, shifts can be canceled with little notice if staffing levels stabilize. This lack of certainty requires workers to maintain a financial buffer to manage periods when work is scarce.
The major drawback is the lack of traditional employee benefits. PRN and Per Diem workers generally do not receive health insurance, paid time off, or employer-sponsored retirement matching. They must source and pay for these protections independently. While some large healthcare systems may offer a medical coverage option designed to meet specific Affordable Care Act (ACA) requirements for eligible PRN staff, this is an exception rather than the norm.
Employee Classification and Compensation Rules
Despite the flexible nature of the work, PRN and Per Diem employees are almost universally classified as W-2 employees, not 1099 independent contractors. This classification means the employer is responsible for withholding federal and state income taxes, as well as the employee’s portion of Federal Insurance Contributions Act (FICA) taxes, which cover Social Security and Medicare. W-2 status offers a simpler tax season compared to the self-employment tax burden required of 1099 contractors.
These workers are typically considered non-exempt under the Fair Labor Standards Act (FLSA). This means they are subject to federal overtime rules, mandating payment at one and one-half times their regular rate for all hours worked over 40 in a defined workweek. The higher hourly rate the worker receives is considered their regular rate for this calculation. If a “per diem” is paid as a travel reimbursement, care must be taken to ensure it is not improperly excluded from the regular rate calculation.
Strategies for Finding PRN and Per Diem Roles
Job seekers can find PRN and Per Diem opportunities through several targeted channels that cater to the episodic nature of the work. When evaluating a role, job seekers should closely examine the contractual commitment requirements before accepting the position.
Primary Sources for Roles
Hospital float pools and direct facility websites are primary sources.
Institutions often manage supplemental staffing internally to ensure consistent quality and training.
Regional and national staffing agencies specialize in placing these workers in short-term assignments.
Facilities often impose stipulations to maintain a ready workforce, such as mandatory holiday coverage or a minimum number of shifts per schedule period. Understanding these specific requirements upfront ensures the position’s obligations align with the desired flexibility.