What’s the Meaning of a Per Diem Job? Everything You Need to Know

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Ever wondered about the flexibility and uniqueness of per diem jobs? What exactly does it mean to work on a per diem basis, and how does it differ from traditional employment? 

Whether you’re an ambitious job seeker looking for job opportunities or an employer seeking agile staffing solutions, understanding everything about per diem employment is essential. 

In this article, we explore the meaning of a per diem job while touching upon its advantages and disadvantages for workers and employers.

Per diem jobs are employment arrangements where workers are hired as needed or temporarily.

“Per diem” is a Latin expression meaning “for each day.” Historically, it was used to describe daily allowances given to workers for expenses incurred while on business travel. Over time, it represents a type of employment where workers are called in and paid based on their work days, reflecting the original ‘per day’ concept.

These workers work part-time and are brought in when their services are required, offering flexibility for both the employer and the employee. 

Unlike independent contractors, per diem workers are employees with taxes withheld from their paychecks and are subject to minimum wage and overtime laws. However, there’s no specific limit on the number of hours they can work, and their schedules can vary​​.

Per diem employment offers flexibility and variability, catering to individuals who prefer a less structured working arrangement than the more predictable and stable nature of full-time and part-time employment.

Here’s how they differ:

• Work Autonomy: Per diem workers might experience more autonomy in their roles than full-time or part-time employees, as they are often hired for their expertise in specific areas and might be given more freedom in accomplishing their tasks.
• Benefits and Protections: Full-time employees typically receive a comprehensive benefits package, including health insurance, paid time off, and retirement plans. Part-time employees may receive some benefits but these are less extensive than full-time employees. Per diem workers, on the other hand, often do not receive these benefits, as their employment is more sporadic and less committed.
• Job Security: Full-time positions offer more job security and long-term employment prospects than per diem and part-time roles. The latter two are more susceptible to fluctuations in work availability and do not typically offer the same level of job security.

Related Article: If you’d like to learn about other employment types, read our article on Contingency Workers.

Per diem jobs have several distinct characteristics that are attractive to certain segments of the workforce who value flexibility and higher pay rates for specific days worked:

Flexibility in Schedules

One of the most significant aspects of per diem jobs is the high level of scheduling flexibility. Workers in these roles have the freedom to choose when they work. This arrangement is beneficial for individuals who need or prefer a less rigid work schedule, allowing them to balance their education, personal projects, or multiple jobs.

Temporary Nature of Employment

Per diem jobs are inherently temporary and contingent on the employer’s needs. These positions do not provide long-term employment security or consistent work hours, making them suitable for situations where the demand for labor is unpredictable or seasonal. This temporary nature also means that per diem workers must be prepared for periods without work.

Varied Compensation Structures

The compensation for per diem jobs can differ significantly from traditional employment. Per diem workers often receive a higher hourly rate than full-time or part-time employees. However, their overall income can be variable and less predictable​.

Per diem jobs are common in several industries, where the demand for labor can fluctuate significantly or specialized skills are needed for short-term projects.

Some common examples include:

• Healthcare: Nurses, doctors, therapists, and other medical professionals often work on a per diem basis in hospitals, clinics, and other healthcare facilities. These healthcare roles are crucial, especially to cover shifts during staff shortages, periods of high patient volume, or to provide specialized care that is not constantly needed.
• Education: Substitute teachers and adjunct faculty often work on a per diem basis. They fill in for regular staff members who are absent or provide specialized expertise for short-term educational programs or courses.
• IT and Consulting: Specialists in information technology, business consulting, or other professional services often work per diem, providing expertise to companies on specific projects or problems that do not require full-time employment.
• Creative and Media Fields: Freelance writers, graphic designers, photographers, and other creative professionals often work on a per diem or project basis, providing their services to different clients as needed.
• Event Staffing: Catering staff, event coordinators, and other personnel involved in organizing and executing events frequently work on a per diem basis, as the demand for these services is event-driven and varies greatly.
• Transport and Delivery Services: Drivers for goods transportation or delivery services, especially in roles where the demand fluctuates, often work per diem.

Per diem rates are based on different situations or settings, such as those within government, corporate, or international frameworks. A comprehensive understanding of these diverse rate structures empowers both workers and employers to make well-informed decisions concerning per diem work expenses:

Government Per Diem

The U.S. General Services Administration (GSA) annually establishes per diem rates for federal workers and other entities adhering to federal reimbursement guidelines. These rates consider location, cost of living, and industry standards. Widely recognized and standardized, government per diem rates often serve as a benchmark for other organizations in determining their allowances.

Corporate Per Diem

Corporate per diem allowances are individually determined by companies and may deviate from federal rates. Tailored to cover travel expenses for workers on business trips, these allowances are subject to company policies and may vary based on the destination. Many companies use GSA’s rates as a baseline, adjusting to align with specific needs and budget constraints.

International Per Diem

International per diem rates accommodate workers traveling beyond the United States, factoring in cost differences in other countries. Typically established by government agencies like the U.S. Department of State, these rates depend on location and exchange rates. International per diem rates enable companies to ensure equitable compensation and reimbursement for expenses incurred during overseas travel.

Per diem work offers several advantages for workers, making it an attractive option for many. These benefits include:

Work-Life Balance

The flexible nature of per diem work can improve work-life balance. Workers can avoid the rigid schedules of traditional employment, allowing them more control over their time and activities outside of work​​.

Diverse Work Experiences

Working per diem allows professionals to gain experience in various settings and roles. This is particularly beneficial in healthcare, education, and consulting, where exposure to different environments and challenges can enhance a worker’s skills and expertise.

Opportunity to Test Different Work Environments

Per diem work can serve as a way to explore different workplaces or industries without the long-term commitment of full-time employment. This can be invaluable for career exploration or transitioning to a new field.

No Long-term Commitment

The temporary and as-needed nature of per diem work means there’s no long-term commitment required from the worker. This can be ideal for individuals who prefer not to be tied down to a single employer or who enjoy the variety of working for multiple employers.

Potential for Networking and Professional Growth

Working in various settings and with different teams can expand a professional’s network and open doors to future employment opportunities.

Reduced Workplace Politics

Since per diem workers are often not involved in the day-to-day dynamics of a workplace, they may experience less stress related to workplace politics or long-term organizational issues.

While per diem work offers several advantages, it also has some disadvantages that are important for workers to consider:

Lack of Job Security & Inconsistent Income

One of the most significant drawbacks of per diem work is the lack of job security. Per diem workers are employed on an as-needed basis, meaning ongoing work is not guaranteed. This unpredictability can make it challenging for individuals to rely on per diem jobs as a stable source of income​​​​.

Absence of Employment Benefits

Unlike full-time employees, per diem workers usually do not receive health insurance, paid time off, or retirement plans. This lack of benefits can be a significant disadvantage for long-term financial security and health coverage​​​​.

Need for Self-Marketing

Per diem workers need to market themselves to secure ongoing work. This can include networking, updating resumes, and actively searching for new opportunities.

Tax Implications

The variability in income and lack of tax withholdings in some per diem arrangements can complicate tax situations, requiring workers to manage their tax obligations more proactively.

Per diem jobs offer several advantages for employers, making them a valuable component of workforce management strategies:

Flexibility in Staffing

Per diem workers allow employers to adjust their workforce based on fluctuating business needs. This flexibility is particularly beneficial in industries with variable workloads or seasonal peaks, allowing employers to bring in additional staff only when needed​​.

Reduced Overhead Costs

Employing per diem workers can lead to significant cost savings, as employers are not obligated to provide the same benefits as they would to full-time employees, such as paid leave or retirement contributions. This can substantially lower the overall cost of labor​​​​.

Access to Specialized Skills

Per diem arrangements allow employers to bring in specialized skills for specific projects or periods without the commitment of a long-term hire. This can be particularly advantageous for projects requiring specialized expertise that the existing staff may not possess.

Higher Productivity

Per diem workers are often highly motivated to perform well, as their continued employment may depend on their performance and the ongoing need for their services. This can lead to higher productivity levels compared to some full-time employees.

Per diem jobs, while offering various advantages to employers, also come with some challenges:

Inconsistent Availability of Workers

Since per diem workers are not committed to a regular schedule, they may not always be available when needed. This can lead to staffing challenges, especially during unexpected surges in demand or when trying to fill shifts at short notice​​.

Lack of Employee Loyalty or Commitment

Per diem workers may not feel as committed to the organization as full-time employees. This lack of long-term commitment can impact team integration and understanding of the company’s culture and goals​​.

Quality and Consistency of Work

Since per diem workers may not be as familiar with the company’s procedures and standards as full-time employees, there can be variability in the quality and consistency of their work.

When considering employing per diem workers, employers should keep in mind several important factors to ensure that this workforce model aligns with their business needs and complies with legal requirements:

Cost Implications

The cost implications associated with hiring per diem workers include:

Labor Costs

Hiring per diem workers can affect overall labor costs in different ways compared to full-time or part-time employees:

• Lower Benefit Costs: Per diem workers typically do not receive the same benefits as full-time employees, which can result in significant savings for employers in terms of benefit costs.
• Higher Hourly Rates: Although per diem workers often have higher hourly or daily rates than regular employees, this can be offset by the absence of benefits and the flexibility to hire them only when needed, potentially leading to lower labor costs.
• Reduced Overtime Expenses: Since per diem workers are employed on an as-needed basis, employers can utilize them to avoid paying overtime to regular employees, leading to potential cost savings.

Administrative Costs

The costs of managing a per diem workforce, such as scheduling and payroll administration, should also be considered. These may vary depending on the complexity of the scheduling and the number of per diem workers employed.

Tax

Employing per diem workers involves various financial and legal considerations for employers. These include managing fluctuating payroll taxes due to irregular work hours, potential tax deductions for business expenses related to per diem employment, and varying obligations for unemployment insurance and workers’ compensation, depending on state laws.

Proper classification of per diem workers is critical to avoid legal penalties. Additionally, as per diem workers don’t receive standard employee benefits, employers are exempt from associated tax implications, which can lead to reduced labor costs.

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Legal and Compliance

When employing per diem workers, employers need to be mindful of several legal and compliance issues:

Labor Laws Compliance

Both federal and state labor laws, particularly those related to minimum wage and overtime pay, apply to per diem workers. Employers must ensure that the compensation for per diem workers does not violate these laws.

For example, the total compensation for hours worked must not be less than minimum wage. Additionally, if a per diem employee works more than 40 hours in a workweek, they are typically entitled to overtime pay at a rate of 1.5 times their regular pay rate​​.

Per Diem for Work-Related Travel

Per diem allowances, which cover work-related travel expenses, are not federally mandated, providing employers flexibility in deciding whether to offer such allowances.

Reimbursement Policies

While federal labor laws like The Fair Labor Standards Act (FLSA) do not mandate reimbursement of out-of-pocket expenses for work purposes, some states may require it. For example, if non-reimbursed expenses effectively reduce an employee’s pay below the minimum wage, it could lead to a wage claim under state law.

Employers should be aware of the specific requirements in their states​​.

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Performance Metrics

Effectively measuring the performance of per diem employees involves identifying key performance indicators (KPIs) that align with the specific nature of their work. Here are some considerations and potential KPIs for per diem workers:

Completion and Quality of Assigned Tasks

For per diem employees, especially those in project-based roles, measuring the number of tasks or projects successfully completed within a given timeframe and the quality of the outcomes can be a primary KPI. This could include metrics like accuracy, adherence to project specifications, and client or supervisor satisfaction with the work.

Attendance and Reliability

Since these employees are often hired as needed, their willingness and ability to accept shifts and show up as scheduled is critical. KPIs include attendance rate, frequency of accepting offered work, and the number of last-minute cancellations or no-shows.

Productivity Levels

Measuring the work completed in a given period can be a useful performance indicator. This could be quantified in terms of units produced, customer interactions handled, or other quantifiable output measures relevant to the specific role.

Customer Feedback and Service Quality

In customer-facing roles, metrics like customer satisfaction scores, feedback, or complaint rates can measure worker performance.

Cost-Effectiveness

Evaluating the cost-effectiveness of employing per diem workers, especially compared to other staffing models, can be a strategic KPI. This might include analysis of labor costs relative to output or profits.

The landscape of per diem jobs is evolving with several new trends. These trends reflect a shift towards more dynamic, flexible, and technology-enabled work arrangements. Here are some new trends:

Gig Economy Integration

Per diem jobs are increasingly becoming a part of the broader gig economy. This integration reflects a workforce shift where more individuals seek flexible, short-term, and independent work arrangements. 

Per diem roles, especially in healthcare, hospitality, and IT industries, align more with the gig model, allowing workers to pick shifts or projects that fit their schedules and lifestyle preferences.

Remote Per Diem Jobs

With the rise of remote work, there’s an increasing availability of remote per diem opportunities. This trend is particularly prevalent in customer service, administration, IT, and consultancy services. Remote per diem jobs offer the flexibility to work from anywhere, opening up a wider pool of job opportunities for workers and talent for employers.

Technology-Driven Matching Platforms

The emergence of digital platforms that efficiently match per diem workers with employers is a significant trend. Platforms like Wonolo and Shiftpixy use algorithms and data analytics to match worker skills and availability with employer needs, streamlining the finding and filling of per diem roles. This technology-driven approach connects employers with the right talent quickly and effectively.

Increased Use in Various Industries

Per diem, work is expanding beyond traditional industries like healthcare and hospitality into sectors such as education, creative fields, and technical services. 

The growing recognition of the benefits of flexible staffing models across different types of businesses drives this diversification.