How to Manage Per Diem Employees the Right Way

In industries that require work to be done 24/7 or at any moment, healthcare for example, per diem employees can be, and often are, the answer. Literally meaning “daily,” per diem employees work on an as-needed basis, often less than full-time employees, with a flexible schedule, and they do not receive benefits. The clear advantage of having such employees is the ability to call on one to cover for a temporarily absent employee. A hospital, for instance, will take advantage of these “daily” workers, resulting in an adequately staffed building at all times, even if a high amount of employees are out. Per diem employees make up the reserve tank.

But they can be a double-edged sword.

In most cases, per diem employees’ increased flexibility is a pro for both them and you, the employer, and they show up when needed. For the most part, per diem arrangements work out fine. But this is not always the case. When the per diem employee becomes unresponsive and/or is unreliable, what do you do? When he or she constantly cancels or changes shifts at the last minute, consequently forcing other employees to resentfully cover for him or her, what do you do? When the per diem employee is not fit for the job or is causing trouble, what do you do? You probably already have a fairly straight-forward plan of action in mind; you get rid of the problematic per diem employee. But it is how you do it that matters. If you just “get rid of” the problematic per diem employee without following several easy, but critical, guidelines, the former per diem employee may file a claim for unemployment. And win.

Consider the likely scenario of a per diem employed as a nurse who becomes unreliable and regularly cancels or changes her shifts at the last possible minute. This becomes a major disruption for scheduling, and frustrates both you and her fellow employees, who are forced to cover for her when she’s out, as she often is. Let’s call her Nancy.

What NOT to Do

The easiest, and most obvious, solution is to simply stop scheduling hours for her. Since per diem employees only come in when needed and work only when scheduled, this would fix the problem, right? Not quite. She can file an unemployment claim and the state would most likely side with her because you have no proof to counter it. After all is done, your unemployment tax rate will rise. So, what do you do?

What to Do

There are three golden principles when it comes to managing per diem employees to minimize unemployment liability in the long term.

  • Treat per diem employees as if they were regular employees. They should receive annual reviews and be subject to the disciplinary process, like any other employee, if need be. Just as you have with your regular employees, you will have a history of their performance that may prove useful down the road. If something had gone astray with a per diem employee in the past, it will have had been noted.
  • Document, Document, and DOCUMENT. Documentation will be one of your biggest tools in minimizing unemployment liability with per diem employees. If and when he or she files a claim for unemployment, you will be prepared and have something to show to the state. Document any last minute shift cancellations or changes and keep a calendar of shifts offered to the per diem employee that he or she refused. Additionally, require that per diem employees put their resignation in writing and have written proof of status change requests, when regular employees become per diem employees.
  • Have a policy in place that reflects your expectations regarding per diem employees. Have it state that it is a voluntary termination if they do not pick up any shifts for a certain period of time (60-90 days generally works). If Nancy decides to stop working her shifts and files a claim for unemployment, the burden of proof will rest on her side, and, as long as she doesn’t have any compelling reasons for voluntarily quitting, will likely lose the case.

Having the foresight in these kinds of situations is the biggest deciding factor of the outcome. It is, of course, best to apply the five golden principles sooner rather than later, before a problem reveals itself. But it is never too late to begin now and be insured for the future.


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