Tips for Travel Nursing Contracts

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Different travel nursing companies have different travel nursing contracts. The differences lie largely with the various contract clauses that companies choose to use. As mentioned previously, you want to ensure that the contract includes a certain set of information for tax purposes. This includes the start date, end date, taxable pay rate, non taxable stipend rates, and the address of the hospital.

In addition, you should make sure that every compensation variable you’re expecting is stated in the contract. You should also make sure that all the pertinent work related arrangements are present such as the unit, and shift to be worked. Finally, you should make sure that every special agreement you’ve made with the hospital regarding your working conditions, requested time off, and scheduling is included in the contract.

There are several contract clauses that merit special attention. Let’s address them individually.

Travel Nursing Contracts: Missed Hours Penalties and Charge-Backs

We’ve touched on missed hours penalties previously. Remember that a penalty is a mechanism for the company to recoup costs when the full contracted hours are not worked. A penalty clause may stipulate that the travel nurse will be penalized a certain dollar amount for every hour not worked in a given pay period. For example, the clause may state that the travel nurse’s pay check will be deducted $20 for every missed contract hour in a two week period.

Essentially, the amount of the penalty will be based on the value of all the compensation variables except the hourly rate. Therefore, the penalty may or may not include the value of the lodging stipend, the M&IE stipend, the travel stipend, company provided housing, company provided medical benefits, and any other variable that costs the company money. While this action may violate wage recharacterization rules, it is used none the less in some form or another by almost every company. Don’t let it scare you off. Essentially, if you don’t work, you don’t get paid just like any other job. However, this is where the guaranteed hours come in to play.

Travel Nursing Contracts: Guaranteed Hours

Because travel nurses can get penalized for missing hours, they’ll want to make sure that the guaranteed hours policy is clearly stated in the contract. If you’re a true travel nurse incurring duplicate expenses, then you didn’t travel away from your home to simply duplicate your expenses. The guaranteed hours policy ensures that you don’t get stuck paying for duplicate expenses due to shift cancellations.

Travel Nursing Contracts: Non-Compete Clauses and Exclusivity Clauses

Almost every company will have non-compete or exclusivity clauses in their contracts. Some people treat non-compete and exclusivity to mean the same thing. I’m not a lawyer, but from what I can tell by reading about this topic, it appears as though lawyers don’t know whether they’re the same thing or not. Therefore, I’m going to point out 2 key aspects that I believe travel nurses should be aware of regardless of what the clause is called.

First, some clauses intend to prevent you from working at the contracted hospital in any capacity for some specified period of time after your contract is completed, typically 1 year. This means you can’t work there through another company and you can’t take a job with the hospital directly. However, when it comes to taking a job directly with the hospital, there may be a buyout clause in the contract between the hospital and the company that allows the hospital to pay the company a fee if the hospital wishes to hire you on.

Second, some clauses intend to prevent you from working only with another company at the contracted hospital for some specified period of time after your contract is completed, typically 1 year. This means that you would not be able to work at the hospital through another company. However, you could become directly employed with the hospital without penalty. A buyout clause may still exist in the contract between the company and hospital and it would still come in to effect if you were to take a job directly with the hospital. However, that’s between the hospital and the company.

Companies utilize these clauses to protect against loss. The company has invested significant time and resources in to finding and credentialing the travel nurse and they want to ensure that their investment is protected. It’s important to point out that the laws governing these clauses vary by state. These clauses are nearly impossible to enforce in California. In other states, they’re nearly impossible to get out from under. If you’re highly concerned about these clauses, then I recommend doing some research on the specific state in question and perhaps seeking legal advice if that suits you.

Travel Nursing Contract Cancellation Penalties

Most contracts will have some form of penalty for early cancellation by the traveler. The value of the penalty is typically designed to mitigate the losses the company will incur if the travel nurse cancels the contract early. These expenses can include but are not limited to various compensation variables like company provided housing or travel expenses as well as the cancellation fee that is charged to the company by the hospital which can run anywhere from 1 to 2 weeks worth of billing. The cancellation penalties charged by companies typically represent a small percentage of the total cost the company stands to incur.

It’s important to point out that many contracts seek to collect this penalty by docking the travel nurse’s paycheck. This may be against state employment regulations depending on the state you’re in. It’s very difficult to dock an employee’s paycheck in many states. Therefore, if your paycheck is docked, you can check with the state’s labor board to see if this action is legal.

If it’s not legal, then you can file a claim with the labor board and attempt to have the funds returned. The company may be charged penalties on top of having to return your funds, so the simple act of filing the claim or even threatening to file the claim may get the company to return the funds. The company would then be forced to go after you through proper legal channels which may be too costly to justify action.

Perhaps the most important general concept to understand about the contract you sign as a travel nurse is that it’s a contract between you and the company, not a contract between you and the hospital. Meanwhile, the confirmation is the contract between the agency and hospital as it pertains to you. You see, the company already has a master contract with the hospital. The master contract establishes the business relationship between the company and the hospital which includes the working expectations for the company’s contracted workers. The confirmation is intended to establish the parameters of each assignment and any special considerations.

This is an important distinction for travel nurses to understand for two reasons. First, it highlights the importance of establishing with your recruiter any special agreements you’ve made, or desire to make, with the hospital prior to the company accepting the offer. If these items are not included in the confirmation, then they may not be honored by the hospital. Furthermore, attempting to add such items after the confirmation has been sent can be difficult.

Second, this distinction highlights the importance of addressing issues with your recruiter when you feel that they violate your contract. I’ve read many reputable travel nursing blogs that seem to advocate addressing “contract violations” with the hospital directly. This is fine and you’re welcome to do as you please. However, there’s a good possibility that the unit manager and/or supervisor you’re working with have no idea what has been agreed to. It’s very likely that they’ve not seen the confirmation. It’s also possible that the confirmation was sent without the agreements included. This would be unfortunate, but it does happen. In any case, the best approach is to take these issues up with your recruiter to ensure that they are resolved without damaging your relationship with the hospital.

As always, we’d love to hear about your experiences or questions on this topic in the comments section!

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12 replies
  1. Bethany Niles says:

    there’s a clause in my contract that I can’t go back to a hospital I’m at for a year with a different company or the hospital pays a conversion fee. What if I do? What exactly can happen?will the hospital make me pay that fee they end up paying the company? And how much is it usually?

    Reply
    • Kyle Schmidt says:

      These “non-compete” clauses are quite common in the travel nursing industry. In some states, like California, they are completely unenforceable as they’re prohibited by state law. I’m surprised that any hospital would agree to such a term. Typically, there is a penalty if the hospital hires you as a full time employee within one year. In those cases, the hospital may gladly pay the fee on their own. In any case, if they want you to pay, then they’d have to ask you to do so. Docking your pay without notice would be illegal. I hope this helps!

      Reply
  2. missy wood says:

    I was suppose to start my contract job on the 20th of this month. This date was changed to the 21st of the month r/t my QF gold results being lost. I’m told I will need to sign a new contract with new start date because hospital will only start orientation on Mondays. Am I still legally bound to sign new contract? If so should I be compensated for time and money lost?

    Reply
    • Kyle Schmidt says:

      I’m sorry to hear about this, Missy. I’m not a lawyer, so this is not legal advice. You’d need to contact a lawyer to discuss your unique circumstances and get a legitimate legal answer. That said, my understanding is that changes to the contract render the contract void which is why they sent you a new contract to sign. My experience indicates that you are not under any legal obligation given that the terms have changed. That said, it will definitely upset both the agency and the hospital which is something to consider. This is especially significant if the hospital is part of a large organization, like Kaiser or HCA, or if the agency is a large Managed Service Provider like AMN or Cross Country. Such organizations could potentially blacklist you which would close off a large number of potential job opportunities. While I would agree that this is an unfair practice, it happens nonetheless. I hope this helps!!

      Reply
  3. Carol Olesen says:

    I signed a guaranteed, 13-week contract with TravMax (Maxim Staffing) to work at a LTAC in Texas, However, after being verbally abused for 2 solid shifts, I notified my agency as well as the facility H.R. Department. The HR Dept in turn gave it to the CNA. She send a long letter of apology for the poor treatment I had received and vowed to make it better. But, instead of making any changes, they canceled my contract and the reason they stated was: they knew I was unhappy so they decided to cancel my contract.

    This also happened with another RN traveler last week and her agency got the hospital to pay her $16,000 for canceling and not honoring her contract. However, my agency says they do not do that. The only thing my agency is willing to do if find another contract for me.

    I drove over 900 miles from Colorado to Texas on a guaranteed contract that has now been canceled through no fault of my own. Do I have any legal recourse?

    Reply
    • Kyle Schmidt says:

      Sorry to hear about this situation, Carol and thanks for sharing. First, it’s important to note the contract you sign is between you and the agency. So, any contractual obligations regarding cancellations would be between you and the agency. It’s really rare for agencies to include clauses benefiting travelers in case of cancellations by the hospital with or without cause. In any case, legal recourse would most likely need to be taken up in court.

      That said, the contract between the hospital and the healthcare facility sometimes includes a clause for cancellations without cause. Usually, the penalty is one or two weeks worth of billing. Most often, the agency does not pursue collection of the penalty because the healthcare facility is their customer. When they do collect the penalty, the agency will use the funds to cover fixed costs like housing and pay for various expenses to get the traveler up and running on their next assignment. They may also cover costs incurred by the traveler. For example, your travel expenses might be reimbursed.

      Also, I’m not sure how the other agency was able to get the hospital to pay $16,000 for a cancellation. Perhaps that was the equivalent of two weeks worth of billing, although that would be a very lucrative travel nursing contract. Additionally, hospitals rarely pay bills before the standard net 30, 60 or 90 day payment cycle. I’m not saying it’s not possible, but it’s an exceptional case. I wish I could provide more actionable and concrete information, but I hope this helps!

      Reply
  4. Joyce Crouse says:

    My agency called me 12,hrs before my departure flight to tell me that a.vaccination form I’d sent 2 weeks before did no meet hospital guidelines. So now my start date has been pushed back at least weeks. I’ve already paid $800 in rent in advance with no company compensation. What are my rights?

    Reply
    • Kyle Schmidt says:

      I’m so sorry to hear this, Joyce. This is one of the fundamental risks for nurses engaged in travel nursing. There is a chance that your agency will cover the financial costs related to rent and travel expenses. Please be sure to ask if you haven’t already. Whether or not there are any legal remedies depends largely on the contract. However, most contracts have clauses that indemnify the agency in such circumstances. You may consider obtaining legal advice for this issue if the agency offers no remedy. I wish I had a better answer, but I hope this helps!

      Reply
    • JeniFa says:

      Apparently, something is a rye. Why would a vaccination form not meeting standard push back a start date an entire 2 wks? I’ve submitted a doctor’s Rx as an approved form showing my PPD results.

      Perhaps you should count your losses and look for another assignment with a different facility altogether or go with an entirely different Agency.

      I have a real problem with the recruiters explanation. Time is money and I don’t like anyone wasting either.

      JenIfa

      Reply
  5. JeniFa says:

    Doe guaranteed hours only cover ME& I and housing or should it cover the hourly rate as well? I’m trying to figure out if I should take an assignment that has no guaranteed hours. My question again is how important are guaranteed hours in the event the facility has low census and no other unit to float a traveler to?

    Reply
    • Kyle Schmidt says:

      Different agencies handle guaranteed hours in different ways. Most agencies cover ALL the pay variables including M&IE, Lodging and hourly rates. You might find other agencies who don’t cover all variables. Also, different agencies have different guarantees. Some might guarantee every hour. Others might allow the hospital to call off the traveler a specified number of shifts during the contract before the guarantee kicks in. The importance is up to the traveler. Many travelers will not sign a contract without an iron-clad guaranteed hours policy. You can find more information in this blog post. I hope this helps!!

      Reply
      • JeniFa says:

        Thanks for the reply! I spent a lot of time last evening pouring the importance of guaranteed hours. Definitely can’t afford duplicate expenses and it seems crazy to me to go on an assignment without having guaranteed hours.

        Reply

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