Per diem employees are workers who work on an as-needed basis. This allows employers to have fewer employee expenses and provides employees with greater flexibility in their work schedules. Per diem employees are like independent contractors, but they are considered employees of the company, while contractors are not. Per diem employees are common in the healthcare, education, restaurant, and construction industries. Substitute teaching is a well-known form of per diem employment. Ideally, per diem employment has benefits for both employers and employees.
What Is Per Diem Employment?
Per diem employees do not have regular schedules and instead provide availability hours. They work those hours if their employer has a need for them. Instead of being paid at an hourly or salaried rate, per diem employees are paid on a per diem rate, which is often a higher rate. This higher rate is in response to their short-notice availability.
Per diem employees don’t have to commit to a full work week and often hold other per diem jobs or spend time enjoying time off work. Per diem arrangements allow employees to spend more time with family than a typical 40-hour work week allows.
This form of employment is beneficial to employers because they have fully trained professionals in addition to their usual staff during rush periods or in case of a sudden employee shortage.
Do Per Diem Employees Earn Benefits?
Many per diem employees exchange benefits for that schedule flexibility. This is not true of all per diem employees, but benefits that are generally forgone include:
- Health insurance coverage
- Retirement benefits
- Paid time off
Employers are required to express what benefits are provided and what benefits are not provided as per diem employees. Failure to clearly communicate this can create a workplace legal dispute. This can add up to a substantial amount that is lost, and those considering per diem employment must weigh the costs and benefits according to their circumstances.
The Benefits of Per Diem Employment
Per diem employment allows employers to adapt to changes in workflow, including unexpected staff shortages or influx of work. If employers handle per diem employees well and ensure effective communication, it can be a highly beneficial arrangement for a company. It allows them better control over labor costs and paying for benefits.
Employees who have several familial obligations or another job can find per diem employment useful as a way to make additional income. It also allows employees to practice their work in the industry without having to adhere to a 40-hour work week.
Employer Responsibility in Per Diem Employment
Employers should communicate with per diem employees and often have a written explanation or agreement describing what is expected of the employee and what benefits they are eligible for. Employers also have several other responsibilities with per diem employees.
- Full-Time Equivalency
Employers and employees alike need to track per diem employee hours. Under the Affordable Care Act, any employee who works more than 30 hours a week is considered a full-time employee. Whether a per diem employee is considered part-time or full-time affects whether or not an employer is required to offer healthcare insurance.
If a per diem employee works full-time equivalently, employers are required to offer them healthcare coverage. Failure to offer coverage when a per diem employee works full-time equivalency could result in a labor dispute. Tracking shifts ensure that employers know whether they need to offer that coverage or not, and employees should know whether they deserve coverage.
- Paid Time Off
Keeping track of hours also determines whether or not employees are eligible for paid time off (PTO). If a per diem employee works more than 1250 hours over a 12-month period, then the Family and Medical Leave Act (FMLA) provides them with PTO. Both employers and employees should be aware if a per diem employee is eligible for those benefits.
There are other responsibilities that employers have for per diem employees. Employers should also provide similar feedback and employment actions to per diem employees that they prude to full-time and part-time employees. Unemployment laws may also impact per diem employees, and it’s essential to make clear what the availability policy is for these employees. Final pay laws also apply to per diem employees.
Q: What Are the CA Employment Law Updates for 2023?
A: As of January 2023, California employment law updates include an increase to the minimum wage to $15.50 for all sized employers, which also increased the minimum yearly salary. There are also changes to overtime pay for agricultural employees. The law also increases pay transparency and reporting for employers, and bereavement leave is now a protected form of leave. The changes also give greater protections from retaliation for workers facing emergency conditions.
Q: How Does Per Diem Work in California?
A: Per diem, when referring to travel expenses, outlines the total amount of expenses an employee has during business travel on a daily basis for lodging, travel, and meals. These rates are set by company policy most often and exist because of IRS limits on tax write-offs for businesses. The business will reimburse the employee for the set amount of per diem expenses, and the rest the employee may have to pay out-of-pocket. However, per diem does not override the legal requirement to reimburse for reasonable expenses.
Q: Are Employers Required To Pay Per Diem in California?
A: If the travel expenses are directly related to an employee’s work requirements, then an employer is required to reimburse them for those expenses. Though a company can list in its policy what its maximum limit is on per diem expenses, it can’t force an employee to pay out-of-pocket for reasonable expenses required in their job duties. Personal entertainment or high costs are not typically required to be reimbursed.
Q: What Are the Rules for Paying Per Diem?
A: Private companies often use the federal per diem guidelines or California’s Department of Industrial Relations (DIR) guidelines to determine a company policy for per diem expenses. This sets a maximum allowance for travel, lodging, meals, and other incidentals. A company can either reimburse employees by providing a company card or by reimbursing them after travel.
Legal Counsel for Employment Disputes
If an employer fails to communicate your rights as a per diem employee or is failing to offer you benefits you qualify for, you need to discuss with a skilled employment attorney. Contact the Law Offices of Corbett H. Williams today to protect your employee rights.