Per Diem Employee: Definition and Tips for Hiring

By Indeed Editorial Team

Published February 22, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Per diem employees are found in several industries, including in the school system and in construction work. There are benefits of hiring per diem employees, including that these employees only work on an as-needed basis which can ultimately save money. In this article, we'll explore what a per diem employee is, how to manage per diem employees and tips for hiring this type of employee.

What is a per diem employee?

Per diem is a Latin term that means "per day." Per diem employees are those that are hired on an as-needed basis and only work when they are needed by a company. For example, a substitute teacher is typically considered a per diem employee, as they are only hired to fill in until the primary teacher returns to their position.

Most companies pay per diem employees based on a full day of work rather than on a salaried or hourly basis. For example, substitute teachers receive a full day of pay instead of just the hours they worked. However, some employers will pay per diem employees an hourly wage depending on how long the employee will work with the company. For example, a copywriter hired to work on a specific project has either a set sum for the project or will pay the writer an hourly wage.

Per diem employees typically do not receive benefits from the employer. Depending on the type of work, some employers may pay the employee a larger amount to compensate for the lack of benefits. For example, a hospital that hires a per diem doctor may pay the doctor more than the average wage for this position to make up for the fact that the per diem doctor is not receiving benefits.

Related: Guide To Per-Diem Jobs

Advantages of per diem employees

There are several benefits of hiring per diem employees. These benefits include:

  • The company does not have to pay the per diem employee benefits or unemployment insurance.

  • The company does not have to pay payroll taxes for the per diem employee.

  • When a department or team needs help, the company calls in per diem employees.

  • Managers do not have to worry about creating schedules for this type of employee as they only work on an as-needed basis.

How to manage per diem employees

Because per diem employees work on an as-needed basis rather than coming into the office every day like traditional employees, managers should follow certain steps when managing this type of employee. These steps include:

1. Remain flexible in terms of training

Whereas traditional employees hired by a company are available to train according to the manager's training schedule and availability, per diem employees may not be. It's important to remain flexible when training per diem employees, as it often is according to their schedule rather than yours. Working around the per diem employee's availability will ensure they are properly trained and that you can maintain your daily responsibilities as a manager or team lead.

The best way to establish a training schedule for a per diem employee is to work with the employee at the onset of their hiring to determine a schedule that works for both of you. Doing so will allow the per diem employee to share when they are available and when they aren't and to know ahead of time when they will be available for training.

2. Treat per diem employees the same as traditional employees

A great way to manage per diem employees is to treat them like your full-time employees. This includes providing per diem employees with regular performance reviews and implementing any disciplinary processes. Doing so can help you better keep track of per diem employee progress and performance and make adjustments when needed to ensure maximum productivity.

3. Maintain thorough documentation for every per diem employee

A potential disadvantage of hiring per diem employees is the increased risk of unemployment liability. You can greatly reduce this risk by maintaining a thorough document for each per diem employee you work with. Be sure to document when they started, when they ended their work with you, any shift changes or cancellations and other important information related to their time as part of your team.

Related: Documentation in the Workplace

4. Only schedule the per diem employee when you need them

It's important to remember the purpose of per diem employees, which is to fill in for a specific position as needed. Scheduling per diem employees to work consistently or on a full-time basis can complicate the scheduling process and result in issues later on. If you do need the employee on a full-time basis, consider converting that employee to a full-time employee so they receive the benefits and pay they deserve.

Related: How I Transitioned From Full-Time To Per-Diem Nursing

Tips for hiring per diem employees

The following are tips to keep in mind when hiring per diem employees:

Establish a process for hiring per diem employees

If you regularly hire per diem employees, establishing a process for hiring them can be very beneficial. For example, you could note in the process how long the per diem employee is to work on your team. This will ensure that both parties are fully aware of the expectations and that there is no confusion when hiring and dismissing per diem employees.

Use a staffing agency

Working with a staffing agency can be a great benefit as it reduces your need to vet per diem employees. Staffing agencies will typically find and interview the most appropriate persons for the position and then provide you with the top talent available to select from.

Consider per diem employees when looking to fill permanent positions

If you regularly work with per diem employees, you likely have a good idea of how well each performs. If a permanent role comes up in your department or on your team, hiring a per diem employee who has worked with you and your team before can be much more beneficial than hiring a new person.

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