New employment arrangements are emerging to satisfy the changing needs of both employers and workers. One such arrangement gaining traction is the concept of “per diem employees”. With this comprehensive guide, explore its definition, real-world applications, and the advantages of per diem employees.
Per diem employees, also known as on-call or as-needed employees, are a valuable part of many companies’ workforces Working on an irregular or flexible schedule, per diem employees help provide coverage and flexibility that regular full-time and part-time employees may not.
However, managing per diem employees does come with some unique challenges. Follow these tips to get the most out of your per diem workforce while avoiding common pitfalls.
What is a Per Diem Employee?
A per diem employee is someone who works on an as-needed basis. They are called in to work shifts based on the company’s fluctuating needs, usually to fill in for absences or to handle increased workloads.
Some key characteristics of per diem employees
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No guaranteed set schedule or minimum number of hours They work on an on-call basis
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Typically receive higher hourly wages than regular employees to compensate for irregular hours.
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Do not receive full-time benefits such as health insurance, PTO, etc.
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Have flexible availability and are willing to work variable shifts.
Per diem arrangements allow companies to scale up or down more quickly and cost effectively than hiring additional full-time staff. Industries like healthcare and retail commonly rely on per diem workers.
Set Clear Expectations Up Front
Many issues can be avoided by setting clear expectations with per diem staff from day one. Have employees sign an acknowledgement that outlines:
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They are employed on an as-needed basis with variable hours.
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They are expected to accept a minimum percentage of shifts (e.g. 75% of offered shifts).
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They must provide ample notice if turning down assigned shifts.
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Grounds for termination, such as refusing too many shifts.
Make sure per diem employees understand they are not guaranteed any number of hours. Outline your needs and scheduling procedures. Doing this early on can prevent misunderstandings down the road.
Treat Per Diems as Part of the Team
While per diem employees have a different status than regular staff, it’s important they still feel included as part of the team. Ways to do this:
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Invite per diem staff to all-hands meetings and company events when possible.
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Recognize and show appreciation for per diem employees’ contributions.
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Provide the same training and coaching opportunities.
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Hold per diem staff to the same performance standards as others.
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Make sure per diem employees are aware of company news and updates.
When per diem employees feel engaged and valued, they will be more likely to contribute positively and stick around.
Track Hours Closely
To avoid misclassification issues, carefully track per diem employees’ hours and schedules. Full-time misclassification can lead to penalties and benefit entitlements for employees.
Best practices include:
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Maintain records of all hours worked, shifts accepted/declined, and schedule changes.
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If hours trend full-time for an extended period, convert the employee to regular status.
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Conduct quarterly audits to identify misclassification risks early. Consult a HR provider if concerned.
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Classify any employee working a regular, consistent schedule as part-time or full-time.
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Understand laws regarding benefits eligibility thresholds in your state.
Closely monitoring hours ensures per diem employees remain truly flexible staff.
Standardize the Scheduling Process
A standardized scheduling process removes ambiguity and confusion from shift assignments. Key elements to address:
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Notification policy – How far in advance are employees notified of potential shifts? Set the expectation.
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Shift acceptance timeline – How long do employees have to accept/decline a shift before it’s passed to another per diem?
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Schedule change policy – Under what circumstances can employees adjust or cancel accepted shifts? Detail approved reasons.
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Communication channels – Clarify preferred methods and response times for shift notifications and confirmations.
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Availability – Have employees provide their anticipated availability so you can fill shifts accordingly.
Formalizing scheduling reduces frustration on both sides. Per diems understand expectations, while managers have reliable coverage.
Document Everything
Documentation is crucial when it comes to avoiding unemployment claims. Be sure to document:
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All shifts offered to per diem employees, whether accepted or declined.
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Any policy violations, performance issues, or disciplinary actions.
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Dates and reasons for terminating per diem employees.
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Per diem acknowledgements and status change forms.
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Resignation letters if per diem employees voluntarily end employment.
Thorough documentation provides evidence if employees file for unemployment after being let go. It’s also vital for showing employee status in case of audits.
Review Policies and Handbooks
Update your employee handbooks and HR policies to accurately reflect how per diem employees are used and managed at your company. Key areas to review:
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Classification policies – Clearly differentiate per diem status from regular part-time and full-time.
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Compensation – Explain per diem pay rates, overtime eligibility, pay cycles, etc.
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Scheduling – Provide policies for shift notifications,trading shifts, lateness/absences.
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Time tracking – Clarify procedures for clocking in/out and approving timesheets.
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Termination – List reasons per diem employment can be terminated voluntarily or involuntarily.
Accurate policies set standards and prevent confusion when onboarding and managing per diem staff.
Partner with an Expert
Managing per diem employees comes with legal and regulatory risks. An experienced HR provider can help:
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Ensure per diem policies and procedures are legally compliant.
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Classify workers properly and avoid misclassification.
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Navigate termination and unemployment claims.
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Interpret changing labor laws.
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Develop ironclad employment documentation.
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Supply HR expertise and best practices.
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Manage payroll, benefits and other HR functions.
The right HR partner provides confidence you are managing your per diem workforce effectively.
Key Takeaways
Managing per diem employees has unique challenges but great benefits when done right. Following these tips will help maximize the flexibility and cost advantages of per diem staff:
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Set clear expectations upfront through acknowledgement forms.
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Make per diem employees feel valued through training, inclusion and recognition.
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Closely track hours and schedules to avoid misclassification.
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Standardize scheduling processes and communications.
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Document everything thoroughly.
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Review and update handbooks and HR policies.
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Consider partnering with an HR provider for expertise.
With the right strategy, per diem employees can be a true asset to your changing business needs.
What Exactly Is a Per Diem Employee?
A per diem employee, sometimes referred to as a “per diem worker” or “per diem staff,” is someone brought into an organization on a temporary or as-needed basis. They step in, often facilitated by a staffing agency, to fill short-term employee gaps or cater to specific projects. Unlike traditional full-time or part-time employees who follow a fixed schedule, per diem employees are the go-to folks when their expertise or assistance is urgently required.
Where Can You Find Per Diem Employment?
Per diem employees can be found across various industries, each with its unique set of needs and directives. Let’s explore some common scenarios where per diem employment comes into play:
Picture a bustling hospital where per diem nurses, doctors, and other healthcare professionals are the unsung heroes. They swoop in during staff shortages, peak flu seasons, or unexpected patient influxes. This flexible staffing approach ensures that patient care remains a top priority.
Per Diem Explained: How We Pay Per Diem in Our Company
How do you manage per diem rates for traveling employees?
Managing per diem rates for traveling employees in an organization requires research and continuous evaluation. The prime objective for setting up a per diem policy is to help travel and finance teams allocate budgets, track expenses, ease approvals, and ensure superior employee experiences.
Should a company pay a per diem?
Company policy can dictate a per diem rate much higher or lower than these suggestions. Yet, the IRS will consider anything over that value as taxable income for your employee. Companies can also choose whether to pay this rate up-front or after the employee returns. Some employers won’t cover all M&IE expenses.
How to choose a per diem management software?
Research different management software options to help you pick a program that suits your company and its per diem employees. It might be helpful to keep a spreadsheet of your per diem employees. Spreadsheets are valuable for storing, sorting and analyzing data.
Should you add per diem workers?
If the company is going through a busy season, you can add per diem workers to help with staffing. Another benefit is that per diems can easily become full-time employees. This helps with the recruiting process since you already know the employee’s qualifications and skills.
