Per diem employees: what it means and how to manage it

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.

⏱ 7 min readUpdated November 2026Flexible staffing

Animated calendar with days popping in sequencePer diemFlexible staffing

🥚
Found it: the availability windowAsk per diem staff to submit availability for the next month by a fixed date. You fill gaps faster when you know who can work before the gap appears.
In shortA per diem employee works on an as-needed basis, picking up shifts when the employer needs extra coverage, without a guaranteed schedule or minimum hours. The term is common in healthcare, home care, education and hospitality. Per diem workers are usually employees, not contractors, so minimum wage, overtime, payroll taxes, Form I-9 and many state leave laws apply. They often receive a higher hourly rate instead of benefits, but benefit eligibility depends on hours worked and plan rules.
Key takeaways

Two meanings of per diem

“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.”

How per diem employment works

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 vs. part-time vs. temporary

Per diem compared with other arrangements
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.

Rules that still apply

Per diem pool checklist complete.

Pay and benefits

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.

What the DOL says about part-time and overtime

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 worked example

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.

How to manage a per diem pool

  1. Onboard fully. Per diem staff need the same training, policies and credentials as regular staff, even if they work rarely. See how to onboard hourly employees.
  2. Keep availability current. Ask per diem employees to update their availability regularly so you know who to contact.
  3. Post open shifts. Publish available shifts to the whole pool and let qualified people claim them, instead of calling down a list.
  4. Set clear expectations. Define any minimum commitment, how far ahead shifts are offered and how cancellations work.
  5. Track credentials. In healthcare and security especially, licenses and certifications must be current before every shift.
  6. Watch total hours. Monitor weekly hours across locations for overtime and over time for benefit eligibility.
  7. Stay in touch. People who rarely work can feel disconnected. Include them in announcements and recognition.

When to use per diem staff

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.

How EZTime helps

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.

Frequently asked questions

What does per diem mean for an employee?

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.

Do per diem employees get overtime?

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.

Do per diem employees get benefits?

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.

Is a per diem worker an independent contractor?

Usually not. Per diem workers are typically employees who work flexible hours. Classification depends on how the work is controlled, not on the schedule.

Can per diem employees work for other employers?

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.

Do per diem workers have to accept every shift?

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.

Is per diem the same as PRN?

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.

Where to go next

Related reading

Fill open shifts from your per diem pool

EZTime lets you post open shifts that available staff can pick up from the app, and tracks their hours like any other employee.

Disclaimer: This guide on flexible staffing is general information, not legal advice. Wage, leave and benefits rules depend on federal, state and local law and your plan documents. Check current requirements or consult an employment attorney for your situation.