“Per diem” is a Latin phrase meaning “by the day,” describing an employment scheduling structure used across various professions. This model offers high flexibility for both the employer and the worker, serving as an alternative to traditional full-time or part-time contracts. Per diem employment is increasingly important as organizations seek agile solutions for managing fluctuating workforce needs. This article explains how this unique scheduling model functions, detailing its structure, compensation, and suitability for different individuals.
What Per Diem Employment Means
Per diem employment refers to an arrangement where an individual is hired to work on an “as needed” basis without guaranteed minimum hours or a consistent schedule. The worker is placed on the employer’s roster and is only scheduled when an immediate staffing need arises. This employment status is defined by its highly intermittent nature, distinguishing it from the common use of “per diem” for travel or meal allowances.
This arrangement is typically considered “at-will” employment, allowing either party to terminate the relationship at any time. Employers may implement minimum shift requirements, such as mandating one weekend shift per month or a specific number of hours per quarter, to keep the employee active. This structure allows organizations to maintain a flexible pool of trained staff ready to fill unpredictable operational gaps.
How Per Diem Scheduling Works
Per diem scheduling is designed for “gap filling,” revolving around the immediate need to cover staffing deficits. Employers use these workers to manage unpredictable circumstances, such as sudden sick calls, unexpected spikes in demand, or to cover employee leaves of absence. This reliance on just-in-time staffing makes the scheduling process dynamic compared to fixed assignments.
Shifts are offered through various methods, ranging from online portals posting available shifts to last-minute outreach via text or phone call. Workers are afforded flexibility and can often decline shift offers without penalty, provided they meet any contractual minimums. This allows the worker significant control over their personal calendar.
However, the employer can also cancel a scheduled shift, sometimes with little advance notice, if the operational need disappears. For example, if patient census drops in a healthcare setting, the per diem staff member may be told not to report. Consequently, the worker must be prepared for income volatility arising from these last-minute changes.
Per Diem Pay and Benefits
The compensation structure reflects a direct financial trade-off for the absence of standard employment benefits. Per diem workers typically receive an hourly wage noticeably higher than the rate offered to full-time counterparts performing the same job. This premium often ranges from 10% to 30% above the base rate, compensating the worker for self-funding their benefits package.
The employee foregoes traditional financial protections, including paid time off, sick leave, and vacation days. Furthermore, the employer generally does not contribute to health insurance premiums or offer retirement savings matching, such as a 401(k) contribution. The worker must budget for and secure their own medical coverage, retirement planning, and income loss during time off.
A legal consideration is the Affordable Care Act (ACA), which requires certain employers to offer health coverage to employees averaging 30 or more hours per week over a measurement period. Although per diem work is intermittent, consistently meeting this threshold may trigger the employer’s obligation to offer health insurance. This threshold can influence how employers manage the scheduling of their highest-hour per diem staff. The enhanced hourly pay is intended to offset the cost and burden of managing these responsibilities independently.
Key Industries Utilizing Per Diem Staff
The per diem model thrives in sectors where demand is unpredictable and continuous coverage is necessary.
Healthcare
Healthcare is the most prominent industry relying on this structure, particularly for registered nurses, certified nursing assistants, and allied health professionals. Hospitals and clinics use per diem staff to navigate the volatility of patient census, ensuring safe staffing ratios are maintained during unexpected surges or high staff absence rates.
Education
The education sector also uses the per diem structure extensively, primarily through substitute teaching roles. When a permanent teacher is absent, the school district must immediately secure a qualified professional to maintain classroom instruction, which suits the on-call nature of per diem work. This strategy allows organizations to scale up their workforce without committing to long-term payroll obligations.
Weighing the Pros and Cons of Per Diem Work
Evaluating per diem employment requires balancing the significant personal freedoms it offers against the inherent financial instability it creates.
Advantages of Per Diem Work
One of the most attractive advantages is the maximum flexibility afforded to the worker, who retains substantial control over their schedule. They can choose to work only when it aligns with their personal life or other commitments. This freedom is coupled with the financial benefit of a higher hourly pay rate, which can provide robust short-term income and immediate financial returns on hours worked.
Working across different facilities or units also provides an invaluable opportunity to gain broad professional experience. This exposure allows the worker to refine skills and observe varying organizational practices. This experience can significantly enhance a professional’s resume and marketability, particularly for those who are early in their careers or looking to transition into a new specialty. The ability to decline shifts prevents burnout and supports individuals seeking a better work-life balance than a rigid, full-time schedule allows.
Disadvantages of Per Diem Work
The primary disadvantage is the complete lack of guaranteed income, which introduces significant financial instability for those relying on it as their sole source of livelihood. Since shifts are based purely on operational need, the worker’s income can fluctuate wildly from week to week, making long-term financial planning difficult and stressful.
The absence of employer-sponsored benefits means the worker assumes the entire financial burden of healthcare and retirement savings, which can be substantial. Furthermore, the risk of last-minute shift cancellation by the employer compounds income uncertainty, potentially leaving the worker with unexpected loss of earnings for a day they had planned to work.
Given these trade-offs, per diem work is often best suited for specific demographics. This includes students needing supplemental income, retirees who already have health and retirement coverage, or individuals with a financially stable partner. It also serves well for professionals aiming to supplement their primary income without committing to a second traditional job.