Does a Nurse Practitioner Repay a Bonus if the Contract is Terminated? | Termination of Nurse Contracts
Does a nurse practitioner have to pay back their bonuses if they terminate their contract early? The answer to this is normally 99% of the time, yes, you will have to pay back either a portion or all your bonuses as listed in your professional benefits package. Let’s first talk about what kind of bonuses there are. Typically, there is some type of sign-on bonus. It can be called a signing bonus, or a sign-on bonus. Sometimes it’s relocation expenses, but it’s given to you a lump sum at the time that you either sign your employment agreement or at the time that you commence, which means start your employment, so like your first day. Those are the bonuses that are offered to you. Now, the reason why you get these bonuses is to attract you to become employed with the employer and provide your services.
Nurses and Sign-On Bonus Refund Upon Termination
So, it’s great. It’s exciting. And normally, there are significant amounts of money anywhere from 10,000 and up, but the thing you need to know, and you need to read very carefully, there is always some type of strings attached to this sign-on bonus because it also helps your employer retain you to keep you there. There’s normally some type of payback provision, and it normally states anywhere between one to three years, you must have continuous employment with the facility. Otherwise, you have to pay back either the entire bonus or the bonus at a prorated amount. So, for however many months you’ve been employed, that portion will be forgiven off that bonus. Some things you want to really consider before you sign your employment contract are if you receive this money at the beginning of your employment as a bonus, it is considered income and therefore it’s taxed as income.
Let’s just say, they’re offering you a $10,000 signing bonus, you sign, you receive the money. You won’t receive the full 10,000 because taxes will be taken off the top as they do normally with income. However, let’s say you want to leave within a year and your contract agreement states that you must pay back your entire signing bonus. They mean the full 10,000. They don’t mean the amount minus any taxes that you’ve paid. So, this is something that you really want to consider. I always recommend either limiting the amount of time like down to a year before the amount is forgiven or asking it to be prorated as I talked about before that every month a portion of the bonus is forgiven. Sometimes you have to sign something called a promissory note. It’s almost structured like a loan. They’re going to loan you this amount of money. Other blogs of interest include:
- Should a Nurse Practitioner be Reimbursed for Moving Expenses?
- What Benefits Should be in a Nurse Practitioner Offer Letter?
And if you leave before and you have signed that promissory note, they can come after you for that money. And normally, on the promissory notes, there’s some type of interest. So, if you don’t pay back within 30 days of your termination, they can tack on anywhere from 12 to 15%. Again, these sign-on bonuses are attractive, but you want to make sure that you read your employment agreement very carefully to know how long you have to be employed with the practice before this amount is forgiven.
Nurse Relocation Expenses in Agreements
Should a nurse practitioner receive reimbursement for relocation expenses? And the answer to this is yes. If you are moving across the state, out of state, and across the country, you’re moving a significant distance, you should absolutely receive relocation, either expenses or reimbursement. Now, normally this is in an amount anywhere from 10,000 to 20,000, it kind of just depends on your contract, but that’s normally kind of the range. You rarely see it go below 10,000, just because it’s so expensive to move especially today, with all the gas prices and everything, it is going to be difficult to move under $10,000 if you’re moving really anything. That’s something to keep in mind. But normally on contracts, I always see 10,000 or above, anywhere from 10,000 to 20,000. And then next, it’s normally structured in a couple of different ways.
The first way that I see is probably the most common. It’s structured almost like a bonus. They may call it a relocation bonus, or they may just say relocation expenses, but they just give it all to you in a lump sum. They’ll structure it like a $10,000 bonus, they’ll give that to you. But the thing to remember, if it’s structured in this way, it’s considered income and it’s taxed as income. So, you won’t receive the full 10,000, taxes will be taken off of the top. That’s one thing that you really want to remember, especially if there’s some type of payback provision. Normally, you have to pay back the full amount or it’s prorated depending on how long you’ve been with the practice. You want to look out for that. If you must pay back the full amount you want to consider, you didn’t receive the full amount because taxes were taken off of it.
That’s something you might want to negotiate in the terms of your agreement. The second way I see is direct reimbursement to the companies. If you find a moving company that you feel comfortable with, you’ll let your future employer know, and they will directly pay that company. Now, even if they are directly reimbursing with the company, there’s still typically some type of payback provision. And it will say, you’ll have to pay back the full amount if you terminate your agreement for any reason within one to two years. So again, look out for that. And then the last way that’s probably the rarest, but you would pay the moving companies yourself and then they would reimburse you, meaning, your employer if you get them the receipts.
And anytime you’re doing this sort of reimbursement directly to the company or directly to you, there is normally a cap on this. So again, it’s normally still 10,000 to 20,000. And then there’s always some type of payback provision if you terminate your agreement within a short period. So, you also want to look to see if that is prorated or if you must pay the full amount. The other thing you want to take into consideration is sometimes it defines what’s considered a moving expense. I’ve seen anywhere from, well, of course, a moving company, airline tickets, shipping your car or your personal property or storage during your move. All those things can be considered relocation or moving expenses. You just want to check out your employment agreement, read it very carefully. If you cannot get clarity from the words on your actual contract, reach out to your future employer. I always recommend via email, so that it’s in writing, and ask them to define some of those terms for you.
RN and AP Contract Offer Letter
What should be included benefit-wise in an offer letter for a nurse practitioner? An offer letter is normally step one of your employment with your prospective future employer. In the offer letter, it’s normally going to outline a couple of things. One is going to explain what your position is. If you’re specialized, what kind of services are you going to be providing, what location and what setting, is it a hospital, clinic, hybrid? Kind of just depends on your specialty. Normally, there will also be something in there roughly about your schedule. Sometimes it will just say 40 hours, or it may break it up if you’re helping in the OR, or a hospital setting will say 70% this, 30% in the clinic.
And it may discuss if you have any call duties, so like nights or weekends, that’s typically included in an offer letter as well. Now, let’s talk about the benefits. What benefits are going to be included in that offer letter? Let’s start with some of your health benefits. Normally, you don’t get a detailed outline or even a benefits package at this level when you’re just first receiving your offer letter. Once you receive the offer letter, it will normally just state that you will get some sort of health insurance, vision, dental, life insurance disability, maybe long term, short term, and then some type of retirement. And it’s not going to say a detailed explanation of how much each policy is going to pay out, like all that stuff. That’s going to be in a benefits summary or a benefits package. Sometimes that’s included later in your employment agreement, but when we’re just at the level of your offer letter, it just states this is what they provide.
So, that’s going to be the number one, probably it’s just going to outline them briefly, just say the name of what it is. Then the next set of benefits you’re sort of like your ancillary benefits. Those are normally included also in your offer letter. That’s going to include any type of continuing education allowance, licensing, fees, dues, especially a DEA license right now. Those are normally always included in there. If you have any type of board expenses that they’re going to be paying for, that also would be in there, and then also for sure, it will be your compensation. Probably the number one thing you want to look at is what is your compensation and how is it calculated? And then PTO time will also be in there as well.
How much you’re offered if you have any additional PTO days for continuing education, that’s something you always want to look out for as well. And then any type of signing bonus or relocation bonus, all of those will be in the offer letter. The purpose of the offer letter is to start the process of negotiating and to start the process of you becoming an employee. Now, if you sign an offer letter, you’re not agreeing to become employed by the practice. You’re agreeing to enter into negotiations for your employment. And normally, offer letters are pretty good, too. They’re going to be forthcoming with your benefits because they want to entice you to become an employee. So, they’re going to show you all the good stuff right up front.
Your benefits should always be included. You’re going to look for all those health benefits like we just talked about retirement but go further and look and make sure there’s continuing education, there’s reimbursement for those expenses like dues, licensing fees, DEA license, any type of boards that you may be taking, all that kind of stuff you’ll want to look for as well. And then lastly, always look for PTO, how much you’re getting, and look, are you able to calculate it? Sometimes it gets a little confusing. I know it’s popular right now to do a four-day work week, but when your PTO time is calculated in hours, sometimes that can get a little confusing. So, you may want to reach out and ask them to clarify what that is, and how many weeks is that with your four-day work week if that makes sense.
What business expenses should a nurse practitioner be reimbursed for? These can kind of vary depending on where you are, what your specialty is, and what kind of care you’re providing. But they all should be outlined in your employment agreement. I’m going to start with the most common ones and kind of work my way down from there. Starting with number one, your continuing education. You must continue your education to renew your license and practice. That’s the number one thing that employers normally reimburse for. It can look a couple of different ways, but I would say 90% of the time of the agreements that I see, you are given some type of continuing education allowance where there’s a max that they’ll reimburse and that’s normally anywhere from $3,000 to $5,000 annually. This would include going to any types of conferences or meetings.
And if travel is involved, normally, that continuing education allowance does account for travel expenses. So, I would say that’s the first one. You also want to look, I don’t know if it technically is called reimbursement, but if they’re reimbursing you for your continuing education, your employer should also be offering you PTO time specifically for your continuing education. Otherwise, you’re using your own PTO from your vacation days. And that’s not something that you want to be giving. You need this continuing education to practice. Therefore, you should be receiving anywhere from two to five days of PTO time to take those continuing education. The next thing I would probably say is your DEA license. Sometimes you have to have them in multiple states. If you’re on the east coast, I see that come up a lot.
Or even in one state, you have to register your DEA license and it’s really expensive. It’s normally over $800. So, that’s a big expense that you do not need to be paying for. Your employer should be reimbursing you for that. And then also, your initial DEA license and any renewals. You want to make sure that you have that language in your employment contract. Going down the list, probably the next most common reimbursement is your license. Obviously, you have to have a license in order to practice and provide services for your employer. Therefore, they should be providing that. Also, professional dues for professional organizations, common nationally known organizations, or a local chapter. Normally, this also can be capped at a certain amount. But your employer should be reimbursing you for that.
Again, it’s probably going to help you with continuing your education, networking, best practices, all that stuff. It’s helpful to everyone. And so, they should be reimbursing you for those expenses. Depending on if you are moving to a new location to become an employee, you may get relocation expenses reimbursed, and this is kind of structured a couple of different ways. Sometimes they will directly reimburse you. You’ll provide them with receipts of your moving expenses. Sometimes your employer will pay the companies directly, so you’ll have to get approval, and then they will communicate with your moving company and pay them directly. And then other times it’s structured like a bonus. They’ll just give you around $10,000 upfront. Although if it’s structured as a bonus and you receive those funds, it’s taxed as income.
So, you just want to be aware of that, that you’re not going to receive that full amount because taxes will be taken out of it. And then also for sure, with the relocation expenses. But sometimes you have to be careful in an employment contract. There are provisions in there that if your employer is providing these reimbursements for these expenses, and you terminate your agreement with them within a specific period, you may have to pay back a portion, if not all of these expenses. Now, I’d say it’s rare for your continuing education, licensing, and dues. It’s very common with relocation expenses though, but I have seen in a contract before that you are required to pay back all of the reimbursements if you left within a specific period, so you want to make sure you’re definitely reading that carefully.
And then lastly, I would say probably the rarest that I’ve seen, but I have seen them in employment agreements before, is cell phone reimbursement. If you’re using a cell phone or they’re providing a cell phone to you to use when you’re providing your services or travel. If you must travel, sometimes it will give you a sort of mileage reimbursement or maintenance for your vehicle, things like that. So, those are kind of rare and kind of specific to someone who is going to be traveling a lot. But other than that, just to kind of recap, for sure, continuing education, license, dues, fees, DEA license, and relocation expenses, are going to be the basic categories of what you should get reimbursement for.
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