First, it’s fair to say that some of the items included on this list are debatable. If you’ve had a different experience with one of these issues, then we welcome your comments and questions; simply post them in the comments section below! Second, we’ve covered some of these issues in greater detail and will provide links to the applicable article throughout.
Myth 1: Travel Nurses Qualify for Tax-free Money If They’re 50 Miles Away From The Job
This statement is commonly referred to as the 50 mile rule. Unfortunately, it simply isn’t true. The IRS allows businesses to pay tax-free reimbursements for lodging and meals & incidental expenditures when the employee needs to sleep or rest to meet the demands of work while away from their tax-home. There is no mileage limit and expenses need to be incurred in order to accept reimbursements.
This myth persists because there are several similar rules that get misinterpreted. First, some hospitals have distance rules for travel nurses in order to differentiate them from PRN nurses. Second, some agencies maintain their own internal rules. Third, some states require that state legislators live more than 50 miles from the capital in order to qualify for per diem reimbursements. Finally, in order to write-off the costs associated with a permanent move for work, the IRS requires that the new work location be more than 50 miles from your current home.
In rare cases, recruiters will use the 50 mile rule to get candidates to accept travel nursing assignments that are closer to home when the candidate isn’t interested in traveling. In any case, it’s important to remember that there is no such rule.
Myth 2: Travel Nurses Can Work At Home For A Week Or Two Every Year To Continue Receiving Tax-Free Money In The Same Place
Another common thing to hear about tax-free money is that you can continue taking travel assignments at the same hospital or in the same general location for as long as you want if you only return home to work a few shifts for a week or two every year. This simply isn’t true. While there is no hard rule on this issue, one general rule of thumb is to never work in one location for more than 12 months in any 24 month period.
Why is this the case? In order to qualify for tax-free reimbursements, you have to be working away from your tax-home. The IRS considers your tax-home to be your main place of business. Various IRS court cases have established that if you spend the lion’s share of your work time in one location, then your tax-home will shift to that location. The bottom line is that frequent moves are required in order to maintain your “temporary status” and ensure your tax-home doesn’t shift.
Many agencies are now paying close attention to this rule. Some agencies are opting to tax the entire pay package or even decline the extension if they think the traveler is staying in one location for too long. This is because agencies are required to make a reasonable attempt to verify that travelers qualify for the tax-free stipends. Of course, if you’re working with the same agency at the same place for more than 1 year, then the agency is culpable as well because allowing this to happen is evidence that they’re not making a reasonable attempt to verify you qualify for tax-free money.
Despite this, many agencies still allow this to happen. You’ll find some that even encourage it. This is because it’s much easier for agencies when travelers extend and there is always a concern that the traveler will leave thee agency if they don’t extend. Nonetheless, it’s important for travelers to know that this runs afoul of IRS regulations and puts them at risk.
Myth 3: Travel Nurses Can Work For $10 Per Hour
You might be wondering why a registered nurse would even consider working for $10 per hour. The reason is that many agencies offer packages with really low taxable base rates so they can load more money into the non-taxable benefits. This results in the traveler receiving higher net pay.
It also means that that the agency will avoid paying the employer portion of the payroll taxes on a larger portion of the compensation package. By avoiding this cost, the agency can either provide a higher compensation package to the traveler or pocket the savings for themselves. This gives the agency an advantage over its competitors.
The problem is that paying really low taxable base rates is against IRS regulations. While there isn’t a hard rule as to how much agencies pay their travel nurses, the IRS does require that all employees receiving tax-free stipends be paid a rate they would reasonably expect to make in the regular labor market. The most common taxable base rate you’ll see recommended for travel nurses to avoid issues with the IRS is $20 per hour.
You’ll often here that taking any less than $20 per hour will “raise a red flag.” This refers to an increased chance of being audited. While individual travelers have indeed been audited, the biggest risk for an audit falls on the agency. And when the agency is audited, all of their travelers are usually dragged into the audit as well. Either way, it’s highly recommended to avoid really low taxable base rates.
Myth 4: JCAHO Certifies Documentation
It’s no secret that paperwork has become a nightmare in the travel nursing industry. There is paperwork that needs to be completed for each new agency that you want to work with. This paperwork expires so it must be updated periodically. Moreover, there is additional paperwork that needs to be completed for each new assignment. While paperwork exists for permanent nursing jobs, the fact that travelers change jobs so often compounds the problem.
Of course, agencies and recruiters are quick to point out that they must contend with the paperwork as well. In justifying the paperwork, many recruiters point to JCAHO as the culprit. In doing so, many recruiters claim that agencies can only accept paperwork that is “JCAHO certified”, “JCAHO compliant”, or “JCAHO approved.” Below is an example of one such claim clipped from a social media chat.
TJC stands for “The Joint Commission” in this quote. The truth is that JCAHO doesn’t approved or certify any documentation when it comes to travel nursing. There is simply no basis for claiming otherwise. While it’s true that JCAHO audits agency documentation, they do not certify any documentation for use in this regard. This is why you will not see any of the big documentation services like Prophecy Health or API claim that their paperwork is JCAHO certified or approved….because JCAHO doesn’t do that.
Myth 5: The Travel Nursing Agency Needs ALL of Your Paperwork Before They Can Work With You
As mentioned above, travel nursing paperwork is a nightmare. Many agencies take a hard-line approach and tell travelers that they need to complete ALL of the paperwork before they can start working with them. These agencies have the traveler complete all the tests, employment documents and other documents before they can even discuss jobs and pay packages.
The truth is that agencies don’t really need anything to talk with travelers about the services they can provide. Travelers shouldn’t have to go through all that trouble just to find out the agency doesn’t have jobs in the locations the traveler wants to go, or doesn’t provide the compensation package that traveler wants.
Moreover, in order to submit the traveler for an open assignment, the agency only needs an application, resume, skills checklist, references and basic background questions to be completed. It’s extremely rare for hospitals to require anything more during the submission process.
Then why do some agencies maintain this requirement? Many agencies feel that it’s important for them to get the traveler to demonstrate commitment before investing significant amounts of time with the traveler. They also realize that paperwork is no fun so the traveler will most likely avoid going through the process with other agencies. Finally, some agencies prefer to get the paperwork out of the way to avoid setbacks during the onboarding process.
That said, it’s a good idea for travelers to have their submission paperwork ready to go as early as possible. This is because travel nursing jobs can fill quickly. Hospitals sometimes receive multiple submission profiles within hours of opening a new job.
Moreover, there is one instance in which completing all the paperwork first is a fair requirement. Strikes and rapid response assignments typically have very short turnaround times. So completing the paperwork upfront will be required to land these jobs.
We understand how frustrating it can be for travel nurses to complete even the basic paperwork with travel nursing agencies. That’s why we added features to BluePipes that allow travelers to create their own travel nursing resumes, applications and skills checklists. You can send them to any agency you want and it’s all free for travelers.
Myth 6: Travel Nurses MUST Float
Many agencies tell travelers, especially new travelers, that they must be willing to float in order to be a travel nurse. While it’s true that some assignments do require travelers to be open to floating, there are also plenty of assignments that don’t require floating. As with many other aspects of travel nursing, there will be more opportunities available if you are able and willing to float.
It’s also important to note that some hospitals require travelers to float in order to qualify for guaranteed hours. If the traveler chooses not to float, then they don’t get guaranteed hours. In any case, floating is always a subject to take up during your travel nursing job interview.
Myth 7: Travel Nurses Only Get Paid 1.5 times The Taxable Base Rate For Overtime
One of the big advantages that agencies tout about travel nursing pay packages is that they include a large portion of tax-free money so travelers benefit from higher net pay. Meanwhile, the taxable hourly base rates tend to hover around $20 per hour. Of course, overtime laws require that employers pay 1.5 times the taxable base rate for any overtime hours. As a result, many agencies pay their overtime this way and claim that the rules require them to do it this way. This means the traveler receives around $30 per hour for working overtime which is really low.
The truth is that the overtime rules establish minimum requirements. There are methods that agencies can utilize which allow them to pay much more than 1.5 times the base rate. Moreover, agencies are certainly capable of doing this given that the bill rate for the overtime hours is as much as, or more than, the bill rate for regular hours. As a result, you are certainly able to find many agencies that do indeed pay overtime rates that are higher than 1.5 times the taxable base rate.
Myth 8: You’re Getting Ripped Off
As I mentioned at the outset, some of these “Myths” are debatable and this is one of them. There are certainly cases where travel nurses get the short end of the bargain when it comes to pay packages. The low overtime rates we just discussed are a good example. Moreover, we have tons of articles on this blog about travel nursing pay packages and how to negotiate. We even have a free eBook that is over 70 pages devoted to travel nursing pay negotiation.
That said, I think there is a tendency to rush to negative judgement when discussing pay. I see it on message boards and social media chats all the time. I also dealt with a lot as a recruiter.
As a recruiter, I would receive at least 1 call a week from a traveler who thought they were getting ripped off by their current agency. Of course, this was a perfect opportunity for me pounce as a salesman, but that isn’t my style. Instead, I would gather all of the details I could so I could let them know whether or not I thought they were getting ripped off.
My guess is that eight times out of ten the traveler was getting at least a decent deal. There were almost always important details that weren’t being taken into consideration. I see this all the time in online chats. A traveler will post an issue about their pay and recruiters jump on it and say the traveler is getting ripped off despite the fact that there are many unanswered questions that could affect whether or not the traveler is truly receiving a bad deal.
Again, I’m not saying bad pay rates never happen. Moreover, I’m a huge proponent of travelers negotiating shrewdly with their agencies. Instead, I recommend talking things through with your recruiter when you feel you’re getting shortchanged to give them a chance to explain. Another approach is to talk to your fellow travelers at the hospital and contact one of their recruiters to run your pay package by them to see how a different agency’s offer compares to your current package. Remember though, it’s imperative to always consider the entire pay package when evaluating and comparing.
9: We’ll Just Find Another Travel Nurse To Take This Job
This is one of my favorites but it requires some explaining. Recruiters will sometimes tell a traveler that the agency will just find someone else to take a job if the traveler isn’t interested for some reason. This usually happens out of frustration when there is some impasse that the recruiter has difficulty working around. Below is an example of a recruiter taking this approach.
In this case, the recruiter tells the traveler that he will, “offer to someone else.” First, agencies don’t make offers, hospitals do. Also, there is a common misconception that each agency submits only one candidate to a job. Instead, agencies submit all of their interested and qualified candidates to a job. Agencies do this because it’s not their job to decide on which candidate is best. The agency’s job is to determine the qualified and interested candidates, treat them all equally, and present them to the hospital to decide.
Moreover, the more candidates the agency is able to submit for a job, the better the agency’s chance at landing that job over competing agencies. Perhaps most importantly, it’s less common for an agency to have multiple candidates for the same job. Therefore, if a candidate is removed from consideration, then it’s more common that the agency will be left without anyone to submit.
10: Travel Nursing Companies Give Away Free Stuff!
You’d be hard-pressed to find a travel nursing company that didn’t advertise free housing, free travel, and/or free medical benefits among other things. Agencies are almost forced into doing this by virtue of the fact that other agencies do it. Ultimately, it’s an advertising strategy designed for newcomers who aren’t yet familiar with the complexities of the travel nursing pay package.
As we’ve mentioned in previous blog posts, nothing is free when it comes to the travel nursing pay package. As evidence, the same companies that offer free housing will also offer a lodging stipend if you choose to provide your own housing. How is that free? This is why it’s so important to consider every last compensation variable when evaluating and comparing pay packages.
That said, you will certainly come across claims that certain benefits can indeed be free. For example, certain companies offer paid vacation time which they do not factor into their rate calculations. They also won’t pay you any money if you choose not to use or take the paid vacation time.
However, all agencies maintain a general goal for their profit margins. Moreover, they typically have a minimum profit margin that they’re willing to accept on a contract. As result, an agency that provides paid time off most likely maintains higher minimum profit margins than an agency that doesn’t offer this benefit. Again, the only way to know for sure is to run accurate pay comparisons.
As always, we hope you found this information useful and we’d love to hear about your experiences with these topics. Did we leave something out, or get something wrong? Let us know in the comments section below!