There are multiple variables to consider when you’re looking at travel nurse contract negotiations between yourself and your travel nurse recruiter/company. The ultimate outcome should be a win-win situation for both parties. The recruiter wants to make a good commission, the travel company has parameters required for profit and you want the most that you can get. So where do you start?
In order to negotiate a travel nurse contract, it’s important to understand what your negotiating parameters are. First, you need to understand that all of your compensation, benefits and reimbursements will come from one source. This source is the Bill Rate. You may have never heard the term before and it’s important before you begin contract negotiations that you Understand the Bill Rate. In this post, I compared the bill rate to a pie. The following are all pieces of the pie that you will consider as you begin contract negotiations.
Basic Elements of Travel Nurse Contract Negotiations
There are 7 Basic elements to travel nurse contracts:
- Travel Reimbursements
- Licensing Reimbursements
This is covered in a separate posting titled Making sense of Travel Reimbursements. I would suggest if you haven’t read it already, that you read it now and make sure you understand the different types of travel reimbursement available.
It is not a given that a travel nurse agency will offer this as part of your package/contract. Licensing can become a significant financial consideration for travel nurses. There are licenses that are very cheap and others that can be quite costly. If you require license reimbursement, it is important to consider that this cost will come out of your part of the pie. It’s also important to remember that this cost can be utilized as a deduction on your end of year taxes if you choose not to have the travel company provide a reimbursement. Check the individual State Boards for specific licensing information.
Benefits are a complicated matter. I’m not going to go into this much. You can ask your recruiter about benefits offered and if there is any effect on your payment package if benefits are selected. Some companies will offer a monthly tax-free allotment for personal health insurance if they do not offer health insurance or if you choose to maintain your health insurance privately.
Travel Nurse Housing is a big portion of your slice of the pie; second only to your salary/hourly rate. This is where your wants/needs can play a factor in your negotiations. If you require to be downtown Manhattan (for example), your housing costs are going to be significant higher; resulting in a lower amount of the ‘pie’ left for salary, transportation, etc. Other factors, beyond location that may affect housing costs can include: area of the country, availability of furnished housing, pet-friendly housing, personal requirements (garage, washer/dryer, etc).
There are two considerations when looking at housing. You can take the company provided housing or you can receive a housing stipend and arrange housing on your own. There are advantages and disadvantages to both. It is important to note that although you may be able to pocket some extra money by taking the housing stipend, there are significant tax issues that you must comply with in order to be eligible to receive the housing benefits tax-free. Read more about your housing options in the 3 part “Where will I live” series of posts.
BEFORE YOUR EVEN SUBMITTED FOR A SPECIFIC POSITION, YOU SHOULD HAVE TRAVEL NURSE CONTRACT NEGOTIATIONS INITIATED.
Now that you know what else is coming out of your part of the pie, you can look at your hourly rate. You probably have a minimum amount that you have pre-determined that you need to make hourly. If not, you should figure out what that is. We discussed this in Needs/Wants.
It’s obvious that you want to get the best salary possible. It’s time for you to look at the other parameters above and figure out which ones you are willing to bend a little on. Do you really need the licensing reimbursement? How will it affect your take home pay if you don’t take it? Is it worth an extra $0.50/hr to take care of these costs yourself and take it as a deduction on your year-end taxes? I have found that for my-self, I prefer to take a less amount of ‘benefits’ and a higher hourly rate. I can generally make up for any loss of benefits either through weekly salary or the year-end tax benefit.
Tax Advantage / Tax Free Payments
Tax advantage is an industry term that is complicated to understand due to each individual companies interpretation of the plan. To put it in a nut-shell; it’s an amount of your hourly wage that is tax-free. Why should you get tax-free monies? You can read more about tax-free here but basically, it’s the same as a corporate employee working a short time in another area ie for convention, meetings, etc. The employee (due to being away from home on temporary assignment) is allowed tax-free benefits.
TAX EVASION AND MISREPRESENTATION ARE RAMPANT IN THE INDUSTRY. KNOW WHAT YOU CAN AND CANNOT CLAIM LEGALLY TO AVOID ANY AUDIT ISSUES.
The government has developed an amount for each area of the country that is maximum allowable for meals, lodging and expenses. This is generally referred to as the GSA. If you take the company provided housing you are not eligible for the lodging portion of this. Most companies will break down the meals/expenses portion of this into an hourly amount. I will warn you that there are many variables to consider when accepting this tax-free amount and many companies will utilize a wage re-structuring which is by all intents and purposes illegal and could get you into serious issues with the IRS.
If you need more information, please consult a tax expert.
If you have no intentions of working any overtime, ever; you can skip this part. However, if your like me and want as much overtime as possible; this is an important negotiating point.
Some companies will negotiate overtime rate separate from the contracted hourly rate. The following information is important and armed with it will help you negotiate for a higher overtime rate. Why? This is because all of your expenses/benefits are covered on the travel nurse agencies part in the contracted amount of hours. Any hours that you work over the contracted amount are simply a benefit (and increased revenue) for the travel nurse agency. Most companies will offer you time and half of your base rate (minus any tax-free amounts) for overtime. I always negotiate for a higher overtime rate and if the travel agency will not budge on this; I remind them that me working overtime is not only beneficial for me…but for them as well.
So now that your armed with some basics of pay-structure, you’re ready to start your travel nurse contract negotiations. Before your even submitted for a specific position, you should have most of these items negotiated. You should know what your pay is going to be, what type of housing you will be living in (or how much the company is offering for housing stipend), what benefits are available, etc.