Defining Per Diem Jobs: Everything You Need to Know

What is a Per Diem Job?

A per diem job refers to employment where individuals work on an as-needed basis, typically for a short period of time. This type of employment is also known as 'daily work' or 'day-by-day' employment. Per diem employees are not guaranteed regular hours or a fixed schedule, and they are often hired to fill in gaps or cover shifts when there is a temporary increase in workload or when regular employees are unavailable.

Per diem work is common in various industries, including healthcare, hospitality, transportation, and construction. It offers flexibility for both employers and employees, allowing organizations to adjust their workforce based on fluctuating demands while providing individuals with the opportunity to work on their own terms.

Per Diem Employees vs. Independent Contractors

It's important to distinguish between per diem employees and independent contractors. Per diem employees are classified as W-2 employees, meaning they are hired by an employer and receive a regular paycheck with taxes and other deductions withheld. On the other hand, independent contractors are considered self-employed and are responsible for paying their own taxes and expenses.

While per diem employees have the benefit of being part of a company's workforce, independent contractors have more freedom and control over their work. They can choose their clients, set their own rates, and have more flexibility in their schedule.

Pros and Cons of Per Diem Work

Per diem work offers several advantages and disadvantages for both employers and employees. Let's explore some of the pros and cons:

Pros:

• Flexibility: Per diem work allows individuals to have control over their schedule and work when it suits them best. This flexibility is especially beneficial for people with other commitments or responsibilities.
• Higher Hourly Pay: Per diem employees often earn a higher hourly rate compared to full-time employees due to the lack of benefits and job security.
• Exposure to Different Work Environments: Per diem jobs give individuals the opportunity to work in various settings, which can enhance their skills and broaden their experience.

Cons:

• Uncertain Income: Since per diem employees do not have a fixed schedule, their income may vary from month to month. It can be challenging to budget and plan finances without a consistent paycheck.
• Lack of Benefits: Per diem employees typically do not receive benefits such as health insurance, paid time off, or retirement plans. They are responsible for arranging their own benefits and savings.
• Limited Job Security: Per diem employees are often the first to be let go during downturns or when there is a decrease in demand. They may have to constantly search for new opportunities to maintain a steady income.

Per Diem and Business Travel Expenses

Per diem also refers to the amount of money employees can spend on travel expenses while on a business trip. When employees travel for work, they are reimbursed for their accommodation, meals, and incidental expenses based on a per diem rate set by the company or government.

The per diem rate varies depending on the location and duration of the trip. It covers expenses such as lodging, meals, transportation, and tips. The purpose of per diem allowances is to simplify the reimbursement process and provide employees with a fixed daily amount to cover their expenses.

Using Per Diem for Your Small Business

If you are a small business owner, per diem can be an effective way to manage your workforce and control costs. Here are some things to keep in mind:

• Flexibility: Hiring per diem employees gives you the flexibility to adjust your workforce based on demand. You can bring in additional staff during busy periods without the long-term commitment.
• Cost Savings: Since per diem employees are not entitled to benefits, you can save on expenses such as health insurance, retirement plans, and paid time off.
• Talent Pool: Per diem work attracts a diverse pool of talent, including experienced professionals who prefer flexible work arrangements. This allows you to tap into a wider range of skills and expertise.

Conclusion

Per diem jobs offer flexibility and opportunities for both employers and employees. They provide a solution for organizations to meet temporary staffing needs while enabling individuals to have control over their work schedules. However, per diem work also comes with its challenges, such as uncertain income and limited job security.

If you are a small business owner, leveraging per diem employees can help you effectively manage your workforce and reduce costs. It allows you to adapt to changing demands without the long-term commitment of hiring full-time employees.