In my series of articles on Preliminary Contract Negotiations, I discussed negotiating overtime in step 11. In this article, I’m going to delve a little deeper…
The case for Travel Nurse Overtime Negotiation
If you have no intentions of working any overtime, ever, you can skip this part. However, if you’re like me and want as much overtime as possible, this is a negotiating point.
Some travel nurse companies will negotiate overtime rates 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 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 does not budge on this, I remind them that me working overtime is beneficial for me…but them.
Overtime isn’t simply the 1.5 times your taxable rate
Although this is the standard in the permanent staffing world, travel nursing pay is set up differently. We are contractors and can negotiate whatever rate we want – within the constraints of the agency agreement, of course!
1. Determine the “effective taxable wage”
For the sake of the conversation, let’s say that your take-home wage is $1200 a week; you have a 36hr guarantee; and a taxable wage of $18/hr. Many companies will try to pay you overtime on only the taxable wage of $18. And most will only pay the ‘taxable wage’ ($18/hr in this example) for hours 36-40.
The reason is because housing and M&I are based on your guaranteed 36 hrs. However, the bill rate to the hospital doesn’t change, so the company profits on the difference. We are going to try to recover some of that money back into your hands.
Go to paycheckcity.com and play with the calculator until you reach a taxable wage that would make you the $1200/wk take home if you were taxed on 100% of your money for 36 hrs. (This varies by state). For this example, we will assume it’s $44/hr. Once you know your ‘effective taxable wage,’ you are better positioned for negotiations.
2. Negotiate the ‘Secondary Rate.
For hours 37-40, you can negotiate a secondary rate with the agency. Generally, I recommend that you base this on the ‘effective taxable wage.’ In this example, $44/hr.
3. Determine your Overtime rate.
Now that you know your ‘effective taxable rate,’ you can better determine what the OT rate should be. It’s unlikely that the agency ‘can’ pay you time and half of the ‘effective taxable rate’ because this is likely higher than the actual bill rate. BUT, you have a place to start! In this example, time and half of the ‘effective taxable rate’ would be $66/hr.
My recommendation is to work with a ‘triple’ rate as a start for OT negotiations. In this example, the taxable rate is $18, so the ‘triple’ rate would be $54/hour. This is likely much closer to a realistic OT rate than the $66 (time and half of the ‘effective taxable wage.’
4. Be Realistic
The agency has to make money too! You want this to be a win-win situation! These tips are only a suggestion on a place, to begin with, negotiations. Your trust level with your agency/recruiter will play a role in your negotiations, which is why it’s essential to have an agency/recruiter that you trust.
When you work OT, it should be putting more in your pocket and the agencies as well.
Personally Speaking: I’ve had contracts that I couldn’t get a good OT rate and told the agency that I wouldn’t work OT with that rate (and I didn’t). Then I’ve had contracts where my ability and drive to work OT was a great factor in negotiating a great rate. Simply stating, ‘I’m hoping to work a bunch of OT this contract. Let’s make this a ‘money-maker for BOTH of us!’ and my recruiter was able to get me a fabulous OT rate.
5. Don’t Forget…
It’s important to remember if you are taking call/call-back or working holidays during your contract that this is reflected in your contract at the correct rate!
I hope that these travel nurse overtime negotiation tips have been helpful. How do you experienced travelers negotiate OT? Looking for more information about your Travel Nurse Pay? Do you have other tips or suggestions? Please post in the comments to share with our readers!
