Imagine only showing up to work when your skills are in demand — just like Batman answering the call when the Bat Signal illuminates the sky. That’s the essence of “per diem” work.

But what exactly is per diem, and how does it work? How can this flexible, on-demand schedule benefit both employers and employees? 

If you’ve ever wondered about spot work and the questions that entail, you’re in the right place. Keep reading to uncover the benefits of per diem work and discover how it can benefit both employers and employees.

Defining Per Diem Work

"Per diem" is a Latin phrase meaning "for each day." 

In the context of employment, per diem refers to jobs where individuals are hired on a day-to-day basis, often without a fixed schedule. Employers call on per diem workers as needed, which offers flexibility for both worker and employers. Many professionals implement per diem work in health care, construction, hospitality, or education, as these industries frequently rely on flexible staffing solutions.

Per diem can also refer to daily allowances provided to employees, particularly for travel expenses, covering costs like meals and lodging while on business trips. The U.S. General Services Administration establishes the rates that federal agencies use to reimburse employees for lodging and meals. This information can be found by clicking here. 

The Benefits of Per Diem Work 

Per diem work comes with a range of benefits that make it an appealing option for both workers and employers. It commonly serves as a formidable solution for those seeking greater control over their careers, better pay for fewer hours, and opportunities to explore different industries — all without the commitment of full-time employment. Here are a few of the key advantages:

1. Flexibility: One of the most significant benefits of per diem work is its flexibility. As a per diem worker, you can choose when and where you want to work, allowing you to balance professional obligations with personal commitments. This autonomy makes it ideal for those who need a nontraditional work schedule or want to pursue multiple interests simultaneously.
2. Premium Pay: To compensate for shift unpredictability, many employers offer per diem workers higher hourly rates than their full-time counterparts. This premium pay can make per diem roles especially lucrative for professionals willing to accept irregular work hours.
3. Diverse Experience: Per diem roles often expose workers to various departments, tasks, and teams, allowing them to develop a broad range of skills. Whether it’s health care, construction, or education, working per diem gives employees the opportunity to gain experience in different settings, further enhancing their professional development.
4. No Long-Term Commitment: Per diem work provides the freedom to explore different work environments without being locked into a long-term contract. For those unsure of their long-term career paths or looking to test the waters before committing to full-time roles, per diem employment offers a low-risk way to evaluate different job opportunities.
5. Multiple Income Streams: Another key benefit is the potential to work for multiple employers simultaneously. Since per diem workers are hired on an as-needed basis, they can take on various gigs to diversify their income, creating opportunities for financial growth and stability.
6. Work-Life Balance: For individuals who prioritize personal time, per diem work offers a unique advantage. Workers have more control over their schedules, allowing them to better manage their work-life balance compared to those in traditional full-time roles.

The Challenges of Per Diem Work

While per diem work offers numerous benefits, it also comes with its own set of challenges. Understanding these downsides is important for both employers and workers considering this type of employment.

1. Inconsistent Income: One of the biggest drawbacks of per diem work is the unpredictable income. Since there are no guaranteed hours, workers may face long stretches without work, leading to financial instability. This lack of predictability can make budgeting difficult, especially for those relying solely on per diem jobs.
2. A Lack of Benefits: Unlike full- or part-time employees, per diem workers are usually not eligible for benefits such as health insurance, retirement plans, or paid time off (PTO). This can leave workers unprotected in the event of illness or needing personal time, forcing them to seek out costly private insurance or forego coverage altogether.
3. Job Security: Since per diem workers are only called upon as needed, they don’t have the same level of job security as full-time employees. Employers may scale back their hours or stop offering shifts altogether during slow periods, leaving workers with little recourse or ability to plan for the future.
4. Career Advancement: Per diem workers may miss out on opportunities for career development and advancement within an organization. Because they aren’t permanent employees, they might not be considered for promotions or full-time roles, limiting long-term growth prospects.
5. Inconsistency: Depending on the industry, per diem workers might frequently shift between different teams or work environments. This can create challenges in terms of adapting to new systems, coworkers, or processes with every new assignment, potentially leading to feelings of isolation or instability.

Per Diem Workers vs. Independent Contractors vs. Part-Time Employees

While per diem work offers distinct advantages, it’s important to understand how it compares to other flexible employment arrangements, such as independent contractors and part-time employees. Each has distinct characteristics in terms of scheduling, tax classification, and job security, so let’s dig into these differences.

1. Per Diem Workers: Per diem employees are hired on an as-needed basis, often to fill temporary staffing gaps or provide specialized expertise. They are official company employees and receive W-2 income, with taxes automatically withheld from their paychecks. However, they don’t have guaranteed hours or a fixed schedule, which offers flexibility but leads to variable income. While they typically receive higher hourly pay to compensate for the lack of benefits, such as health insurance or PTO, this unpredictability can be a trade-off for those seeking more control over their work-life balance.
2. Independent Contractors: On the other hand, independent contractors are not considered employees at all. Operating as self-employed professionals, they sign specific contracts with companies to provide services. While both per diem workers and contractors enjoy flexibility, contractors are responsible for handling their own taxes, as they receive 1099-NEC forms. Additionally, contractors set their own rates and methods for completing tasks, which allows for greater autonomy but without the employee protections or benefits that per diem workers may have.
3. Part-Time Workers: Part-time employees fall somewhere between per diem workers and full-time staff. Unlike per diem employees, part-time workers have a set number of hours per week, offering more consistency in income and scheduling. While they might receive fewer benefits than full-time employees, depending on the employer, part-time workers may still qualify for perks like health insurance or PTO. This predictability comes at the cost of flexibility, as part-time employees are expected to adhere to a scheduled shift.

Summarizing the Key Differences 

Tax Classification

• Per Diem: Employee (W-2 income, taxes withheld)
• Independent Contractor: Non-employee (1099-NEC, responsible for self-employment tax)
• Part-Time: Employee (W-2 income, taxes withheld)

Control and Flexibility

• Per Diem: Work when needed, can accept or decline shifts.
• Independent Contractor: Full control over work methods, can work for multiple clients.
• Part-Time: Set a schedule with more limited flexibility.

Pay and Benefits

• Per Diem: Higher hourly rates, no benefits.
• Independent Contractor: Determines own rates, no benefits from the employer.
• Part-Time: Lower hourly rates, may receive some benefits like health insurance or PTO.

Keeping Tabs on Per Diem Employees

Just like Batman responding to the Bat Signal, per diem workers step in when they’re needed most — offering flexibility and specialized skills without the commitment of a full-time role. Whether you’re an employer looking for agile solutions or a worker seeking more control over your schedule, per diem employment offers unique benefits.

However, per diem schedules, with their irregular hours and inconsistent needs, can be challenging to manage. By leveraging digital time tracking solutions, like OnTheClock, companies can effectively "keep an eye on Gotham" — tracking per diem workers' hours with precision and ease, all while minimizing the administrative load.

Ultimately, per diem work empowers both businesses and workers to adapt to changing needs, providing a flexible, efficient solution when it is needed most.