Travel Nursing Pay – How are your extra hours paid?

One of the most overlooked aspects of the travel nursing pay package is “Extra Hours.” Extra hours are hours that are worked above and beyond the hours mandated by the contract. In this blog post, we’ll look at some examples to determine the difference between an extra hour and an overtime hour. We’ll also discuss some of the issues at play with extra hours and what it all means for travel nurses.

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Let’s begin with a simple pay package example. Let’s say you have a 13 week contract for 36 hours per week with the following compensation components:

Taxable Base Rate: $20/hour

Taxable Overtime Rate: $30/hour

Lodging Stipend: $2500 per month

M&IE Stipend: $300 per week

Travel Stipend: $700 total for the 13 week contract.

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In order to arrive at this pay package, the travel nursing agency based its calculations on the revenue it expects to earn given the number of hours to be worked during the assignment and the bill rate for the assignment. Now, on a perfect week, one in which everything goes as anticipated, the traveler will turn in a timecard with 3 12 hour shifts. This will enable the agency to collect the money they were anticipating from the hospital and pay exactly as anticipated. But what happens during the imperfect weeks? Let’s take a look at three different scenarios to get a clear understanding of the issue.

Travel nursing time sheet scenario 1: Hours are short:

In this scenario, the traveler turns in a timecard with fewer than 36 hours on it. For example, the traveler may have been called off, or called in sick, for a shift and turns in a timecard with only 24 hours? In this case, the taxable base rate for the un-worked hours will not be paid; but what about the stipends and fixed costs like company provided housing? The agency isn’t able to collect the money they need to pay for these items because the hours weren’t worked.

Different agencies handle this in different ways. Some agencies have penalty clauses in their contracts which essentially breakdown the value of these costs to an hourly value and state that the paycheck will be penalized that amount for each un-worked contract hour. Other agencies may just literally spell out in their contracts that the stipends are paid hourly. So if the hours aren’t worked, then the stipends are automatically reduced. The point is that the vast majority of companies will have some mechanism in place which attempts to ensure they don’t have to soak up all the stipend costs as a result of un-worked contract hours. These mechanisms are never perfect which is why companies are so adamant that the contracted hours are worked.

Travel nursing time sheet scenario 2: Hours are met, but imperfect:

In this scenario, the timecard has 36 hours on it, but it’s not for 3 12 hour shifts. Instead, the traveler has worked 14 hours, 12 hours, and 10 hours. Essentially, there are no issues here for either party. The agency is going to be able to bill the hospital and collect for the hours. In fact, it may even work out in the agency’s favor if their contract with the hospital has an increased bill rate for hours worked after 12 in a day. The only difference for the nurse will be that the additional 2 hours worked on the 14 hour day may be paid out as overtime or double-time depending on state law. The important thing to note here is that the overtime or double-time rate will based on the taxable base rate. In our example this rate is $20 per hour so the overtime rate is $30 per hour and the double time rate is $40 per hour.

Travel nursing time sheet scenario 3: Extra Hours:

In this scenario, the timecard has more than the 36 contracted hours on it. This could be 38 hours if a couple of extra hours were worked or 48 hours if an entire extra shift was worked. Let’s use the latter case to provide an example. Let’s say that the nurse worked 4 12 hour shifts. The issue here is to determine how that fourth shift will be paid out.

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Different agencies handle it in different ways. Some agencies simply pay the taxable hourly rate. So the paycheck will have $20 per hour for the regular hours and $30 per hour for the overtime hours. However, the agency is still collecting the same bill rate that enables them to pay that base rate PLUS the stipends. So the agency is making out like a bandit if they only pay the taxable base rate. This is why there is a difference between “Overtime Hours” and “Extra Hours.”

You see, once the contracted hours are met,the agency has paid for the stipends and any other costs that they had calculated in when determining the pay package for the assignment. So if they don’t offer some additional form of compensation for hours worked above and beyond the contracted hours, then they are pocketing a far larger percentage of the bill rate for those particular hours. Again, some agencies are happy to do this. But others offer incentives to work extra hours.

There are a number of ways to do this. I’ve seen some agencies simply offer a set additional amount for working extra hours. For example, they may offer an additional $10 per hour for all extra hours worked. Others may simply continue to pay the stipend money as an hourly rate for any extra hours. Others may pay double time based on the taxable base rate.

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It’s important to note that we looked at examples based on weekly scenarios. I did this because it made explaining the issues easier. However, it’s important to point out that extra hours are really hours that are worked in excess of the total number of hours on the contract as opposed to the total number of hours in any given week. In other words, if the contract is for 13 weeks at 36 hours per week, then there’s a total of 468 hours. So, extra hours would be those hours above 468 for the thirteen week period. However, this doesn’t change the issues at play.

As mentioned previously, agencies have mechanisms in place to ensure that they don’t pay out stipends for time not worked. As a result, you should determine two things. First, you want to determine the mechanisms in place to ensure that you’re paid back for the penalties on missed hours if you make those hours up in the future. For example, if you work 24 hours one week and get penalized by having your stipends reduced, then you want to make sure that your stipends are increased if you work 48 hours the next week or any time in the future. Second, you want to find out how the company pays for any extra hours. If you don’t, you may kick yourself later when you work a bunch of additional shifts and find out that you are only paid the low taxable hourly rate quoted in your contract.