What per diem (as-needed) employment is, how it differs from part-time and temporary work, the pay, overtime, benefits and leave rules that still apply and how to schedule a per diem pool well.
“Per diem” is Latin for “per day,” and in business it has two separate meanings. One is a daily allowance for travel expenses such as meals and lodging; see the per diem glossary entry. The other, covered here, is a type of employment where someone works day by day, as needed. In healthcare this is often called PRN, from the Latin pro re nata, “as the situation requires.”
To record clock-ins, breaks and overtime automatically, see EZTime time and attendance software.
A per diem employee is hired, onboarded and paid like other employees, but has no fixed schedule. The employer offers shifts when it needs coverage, for example to fill in for vacations, call-outs, seasonal peaks or unexpected demand, and the employee accepts the shifts they want. Some employers require per diem staff to work a minimum number of shifts per month or certain holidays to stay active; others do not.
For the business, a per diem pool provides flexibility without the cost of overtime or agency staff. For workers, it offers control over when they work, which suits students, retirees, people with other jobs and parents.
| Per diem | Part-time | Temporary | |
|---|---|---|---|
| Schedule | As needed, no guaranteed hours | Regular, set hours below full time | Set period or project |
| Duration | Ongoing | Ongoing | Ends when the assignment ends |
| Employer | The business | The business | The business or a staffing agency |
| Typical pay | Often a higher hourly rate | Standard rate | Varies |
| Benefits | Often none or limited, depending on hours and plan rules | Sometimes, depending on hours and plan rules | Often none |
See part-time employee and temporary employee for the related definitions.
Per diem pool checklist complete.
Per diem employees commonly earn a higher hourly rate than staff in the same role who receive benefits. The premium varies by employer and industry and is a business decision rather than a legal requirement. Whatever you pay, include any shift differentials or bonuses in the regular rate for overtime calculations.
Benefit eligibility depends on your plan documents, state law and, for large employers, ACA hour thresholds. Do not assume per diem status alone makes someone ineligible. Review hours regularly; a per diem employee who consistently works full-time hours may need to be offered coverage or reclassified.
Two federal rules apply to per diem staff exactly as they do to anyone else:
The no-averaging rule matters for per diem pools. A worker who picks up 50 hours one week and 20 the next is owed overtime for the first week, even though the two-week average is only 35. Track hours by workweek, not by pay period.
A home care agency pays per diem aides $21 an hour with no benefits, while regular aides earn $18 plus benefits. One week, a per diem aide works 32 hours at one client and 12 hours at another, for a total of 44 hours. Because both assignments are for the same employer, overtime applies to the 4 hours over 40: 40 × $21 = $840, plus 4 × $31.50 = $126, for a total of $966. If the agency only looked at each client’s hours separately, it would underpay overtime.
Per diem pools work well for covering predictable gaps, such as vacations and holidays, and unpredictable ones, such as call-outs and sudden demand. They are often cheaper than paying overtime to regular staff or using agency workers. They are not a substitute for adequate core staffing; if you rely on per diem workers for regular shifts every week, it may be time to hire. Our overtime vs. new hire calculator helps compare options.
EZTime lets managers post open shifts that qualified employees can claim from their phones, sends shift reminders, tracks hours across locations with overtime threshold alerts and stores credentials with expiry reminders in the digital employee file.
It means working on an as-needed basis, picking up shifts when the employer needs coverage, without guaranteed hours. It is common in healthcare, where it is also called PRN.
Yes, if they are non-exempt. Hours over 40 in a workweek must be paid at time and a half, counting all hours worked for the same employer, including at different locations.
It depends on the employer’s plans, state law and hours worked. Many per diem roles pay a higher hourly rate instead of benefits, but large employers must track hours under the ACA, and paid sick leave laws often apply.
Usually not. Per diem workers are typically employees who work flexible hours. Classification depends on how the work is controlled, not on the schedule.
Generally yes, unless a valid agreement restricts it. Many per diem workers combine several jobs. Hours with different, unrelated employers are not combined for overtime.
Usually not. Per diem arrangements typically let workers decline shifts, which is part of the appeal. Employers often set a minimum, such as a number of shifts per month or holiday coverage, to stay on the active list. Put any minimum in writing.
In healthcare, PRN (from the Latin ‘pro re nata’, as needed) and per diem are usually used interchangeably to mean an as-needed employee. Some employers use them for slightly different arrangements, so define the terms in your own policies.
EZTime lets you post open shifts that available staff can pick up from the app, and tracks their hours like any other employee.