“Per diem” translates literally to “by the day” or “for each day,” and within the hospital setting, it defines a specific type of employment status. This classification is widely used in healthcare for roles like nursing, technician, and administrative support, where staffing needs fluctuate constantly. Per diem workers function as supplemental staff, helping hospitals manage unpredictable patient volumes, cover for employee absences, and fill gaps in the schedule. This arrangement offers the healthcare facility a flexible mechanism to maintain adequate staffing levels without having to commit to the fixed overhead of a full-time employee.
Understanding the Employment Classification
A per diem employee is classified as an “as-needed” worker. Unlike part-time or full-time staff who are placed on the master schedule, per diem workers are utilized to cover shifts that suddenly become open due to illness, vacation, or an unexpected surge in patient census. The hospital is under no obligation to offer a specific number of shifts, and the employee is generally not obligated to accept every shift offered. This creates a mutually flexible arrangement, though the per diem staff member remains an employee of the hospital, distinct from a contract or agency worker.
Compensation and Benefits Trade-Offs
The primary financial distinction for per diem employment is the compensation structure, which features a significantly higher hourly wage compared to regular staff in the same position. This increased hourly rate is often referred to as “incentive pay” and is the direct trade-off for the lack of a benefits package. While the higher pay rate can be attractive for those seeking to maximize short-term earnings, it is designed to compensate the worker for the absence of standard employment benefits.
Per diem employees are typically ineligible for health insurance, paid time off (PTO), sick leave accrual, and employer-matched retirement contributions. They also may not receive holiday pay or shift differential pay, depending on the facility’s policy. This structure means the employee must independently manage costs for healthcare coverage and retirement planning, which are normally subsidized by the employer.
Practical Scheduling Expectations
While the per diem status implies significant flexibility, most hospitals enforce specific minimum work requirements to maintain employment. These minimums are contractual obligations, often requiring a set number of shifts per month or specific weekend shifts per quarter. Failing to meet these contractual minimum shift requirements can result in the termination of the per diem status.
Per diem staff are often the first to be called in during peak demand periods, such as holidays, during severe weather events, or when the hospital census is unexpectedly high. This expectation means the flexibility is not absolute, and employees may be required to work less desirable shifts to remain in good standing. Shifts are often picked up through internal staffing software, where the employee can view available openings and volunteer for them, though the facility ultimately controls the scheduling to meet its operational needs.