A travel nurse is a nurse who gets by hired healthcare staffing companies to work temporary contracts for hospitals and other healthcare providers at different locations around the country away from the nurse’s legal tax-home. That’s the simple answer. However, there is much more to it than this. In this article, we’ll provide a comprehensive look at what a travel nurse is so you can approach this career option with confidence.
What Is A Travel Nurse? 6 Components
Our definition of “travel nurse” is certainly more detailed than others. We believe nurses should have the complete story so they’re not caught off guard. Let’s break the definition into pieces so we can we can address each component separately. Here are the 6 components of our definition:
- A nurse
- Hired by a healthcare staffing company
- Works temporary contracts
- Nurses complete the contracts at hospitals and other healthcare providers
- The nurse moves around the country periodically for the work
- The locations are away from the nurse’s legal tax home
What Is A Travel Nurse? The Nurse Component
The first part of our definition is that a travel nurse is, well, a nurse. We’re pointing this out because there are many types of travel healthcare professionals. The allied field includes travel therapists and travel techs. Physicians who engage in this type of work are commonly referred to as “locum tenens.” Moreover, there are many different types of “nurses”. So, what specifically are we referring to when we say “a nurse”.
The term “travel nurse” most commonly refers to Registered Nurses (RN). However, it could also refer to Licensed Practical Nurses (LPN/LVN) or Certified Nursing Assistants (CNA). Some people use it to refer to Nurse Practitioners (NP), Clinical Nurse Specialists (CNS) and Certified Registered Nurse Anesthetists (CRNA).
We prefer to reserve the term “travel nurse” for RNs, LPNs/LVNs and CNAs. We typically refer to the advanced practice nurses as “Locum Tenens” in order to keep with industry standards. That said, it’s important to note that travel healthcare professionals across all classifications face many of the same circumstances and issues.
What Is A Travel Nurse? The Healthcare Staffing Company
Our definition of a travel nurse indicates that they must work for a healthcare staffing company. It’s fair to say that some in the industry would disagree. The reason is that there are 2 scenarios in which a nurse could meet all of the other criteria in our definition except this one. First, the nurse could avoid the healthcare staffing company by working as an independent contractor. Second, the nurse could work directly with hospitals as a “seasonal worker.”
So, why don’t we include these scenarios in our definition of a travel nurse? The simple answer is that these situations present an entirely different set of unique circumstances. We’re not going to go into all those differences here.
However, our view is that an independent contractor is just that, an independent contractor. Additionally, it’s important to note that it’s highly unlikely for travel nurses, as we’ve defined them, to qualify as independent contractors. That said, there are many agencies and even hospitals that will employ nurses as independent contractors even though the nurses do not qualify as such. The IRS frequently levies fines and penalties for such actions.
Similarly, we view seasonal contract workers as temporary employees. They too face a unique set of circumstances that travel nurses do not face.
Finally, the vast majority (over 95%) of nurses who engage in this type of work, do so through a travel nursing company.
What Is A Travel Nurse? The Temporary Contract
The temporary contract is the next component in our definition of a travel nurse. Thirteen weeks is the most common time-frame for travel nursing contracts. However, you will also see contracts that are 6 weeks, 8 weeks, and 26 weeks. It’s very rare to see contracts with different durations than those listed here.
Temporary contracts are an important part of travel nursing. Essentially, they put the travel in travel nursing. When a contract is complete, the travel nurse travels to the next location. And, as we’ll discuss further below, temporary contracts are an important tax related requirement.
What Is A Travel Nurse? Where The Work Is Completed
The next component of our definition is that travel nurses work with hospitals and other healthcare providers. This is fairly obvious and straightforward. Hospitals and healthcare providers all around the country utilize the services of travel nurses. Travel nurses fill the void when:
- Healthcare employers have difficulty filling their permanent job openings
- Permanent staff members take a leave of absence
- There are temporary increases in a patient population
- The organization is expanding
- The organization is implementing new services that require employee training
What Is A Travel Nurse? Periodical Movement
The next component in our definition of a travel nurse is that the travel nurse moves around periodically for work. As mentioned above, the pertinent tax laws require this. Specifically, it’s required for the travel nurse to maintain their tax home.
You see, a significant percentage of a travel nursing pay package comes in the form of tax-free reimbursements. In order to qualify for these tax-free reimbursements, the travel nurse must have a legal tax-home. Part of maintaining a legal tax home is not working too long in any one location lest it become the tax-home.
So, travel nurses have to move around periodically. The standard rule of the thumb is that the travel nurse cannot work in the same metropolitan area for more than 12 months is any rolling 24 month period. A travel nurse’s contracts serve as proof that they abode by the rules.
Travel nursing’s tax implications are complex. You can review this series of articles for more details.
What Is A Travel Nurse? Distance From The Tax Home
The final component in our definition of a travel nurse relates to distance from the travel nurse’s tax home. Specifically, the travel nurse’s work assignments must be far enough from the travel nurse’s tax home that the travel nurse is required to “sleep or rest to meet the demands of work while away from home”. The IRS does not specify the exact distance required to meet this criteria. However, one thing is certain. The travel nurse must incur expenses in order to receive tax-free reimbursements.
Why is this important? Well, most hospitals require travel nurses to have a home address that is a specified distance from the hospital. The requirement for many hospitals is 50 to 75 miles. In any case, if a nurse is working a short term contract at a hospital close to home, then they are not a travel nurse. This scenario is commonly referred to as a “Local Contract”.
What Is A Travel Nurse? Putting The Information To Use
Our definition of a travel nurse is more detailed and restrictive than others for a reason. We want to ensure that those considering travel nursing as a career option know what they’re getting into. We want them to approach the career with confidence.
Our definition’s focus on tax related issues is perhaps the main difference between our definition of a travel nurse and others. That said, it’s important to note that it is possible to work under similar circumstances without taking tax-free reimbursements. In this scenario, the travel nursing company will redirect the reimbursements to the taxable wage. This way, the gross pay is comparable, but the net pay is less because more taxes will be taken out.
While we acknowledge that this is a possibility, we also think it’s important to note that this behavior could get the travel nursing company in trouble for “wage recharacterization”. The IRS expects the tax-free reimbursements to be just that, reimbursements for expenses, not a substitute for wages. When a company redirects the reimbursements to the taxable wage for some, but not all, of its employees, then it demonstrates that the reimbursements are being treated as a wage.
Itinerant Workers vs. Travel Nurses
The IRS uses a separate term for people who move from place to place for work but do not have a tax home. They refer to them as “itinerant workers”. There is nothing wrong with this. However, travel nursing companies can get in trouble with the IRS for working with them. Therefore, many travel nursing companies, especially the largest companies, will not work with itinerant workers. This is an important factor for anyone considering the profession to be aware of.
Here again, itinerant workers face an entirely different set of circumstances than travel nurses. Therefore, we believe it’s better to make that clear in the definition of a travel nurse.
We hope this definition helps you determine if travel nursing a good career choice for you. As always, we’d love to hear your thoughts on this topic or answer any questions you may have. Please post them in the comments section below!