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We just found out my wife is pregnant. She's in the process of switching her employment status to what they call per diem, meaning she's not technically a full time employee, although she can (and will) work full time hours (she's an RN). The primary give and take in this situation is that she forfeits her benefits, but she gains ~$8/hour more.

My question is, does it make fiscal sense for her to continue through with per diem? My thoughts are this, but I'd really like some other insight:

  • We have about $15,000 in immediately usable savings
  • We have another $9,000 in savings, but designated for non-emergency spending
  • She's under my healthcare, which is pretty exceptional
  • She'd be losing short-term disability, which could cause a hiccup if she's put on bed rest for the last couple months
  • She'd be losing PTO, which would cause call-in days (due to pregnancy) to be unpaid
  • She'd be bringing in an extra ~$750/mo. from the bump in pay
  • If she works 8 months, that's about $6000 after tax (2x her current monthly income)
  • Short term disability pays at 50% her income (so during FMLA, a total of $4500)

So it seems that we could take a large % of her new paycheck, and save the $4500 ourselves, while banking an extra $1500. My primary concern though is if she needed more time off than the typical 12 weeks after giving birth. We have savings to cover bed rest (or other complications) for a couple months, but at that point relying on short-term disability from her full-time benefited position sounds more stable.

Are there factors here that I'm leaving out?

  • Does going per Diem also impact her right to full time work? ie: Does it become a 'seniority' type situation where she may get fewer hours if people with more seniority claim more workdays than expected? Does it impact the calculation of overtime pay (if applicable)? – Grade 'Eh' Bacon Aug 31 '17 at 17:22
  • Overtime is based on the new rate (1.5x), and it could affect her right to full time work, but they're pretty understaffed as it is, so I don't see that being an issue (they frequently offer $100 gift cards for people willing to pick up extra shifts on the weekend) – MrDuk Aug 31 '17 at 17:27
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    Your 2nd sentence has some confusing wording. Perhaps it would better read as: "She's in the process of switching her employment type to what they call per diem..." – TTT Aug 31 '17 at 18:24
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    I'd err on the side of caution because $1,500 is not much of a win and is predicated on everything turning out as well as it can. – quid Aug 31 '17 at 19:34
  • She might expect to work full time; is that guaranteed? – chepner Aug 31 '17 at 21:31
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She should probably stay in her current status as a full-time employee.

In the scenario you described, working 8 months during pregnancy and being off 12 weeks, would yield at most an extra $1,500 over her current situation. But, she'd lose the security of the short term disability. At $1,500/mo, it'd only take her being out-of-work one month over the expected 12 weeks for her to break even.

You also mentioned she would lose her PTO. Assuming she's able to use a combination of vacation/sick leave as needed, those hours are worth as much as her current hourly rate during the pregnancy, and half as much after (if they reduce they amount she can claim from short term disability). She'd also miss the accrual of new PTO during the pregnancy. Combined, this could be worth close or more than the $1,500 you expect to gain.

Losing her seniority position, risking her ability to go back to full-time status, and the possibility of being taxed as independent contractor (which I understand is not common in the health care field), also sound like minor risks worth considering that also favor staying full-time.

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