As the demand for traveling nurses declines, many nurses are reporting savage pay cuts – ranging from 25% to 75% – from recruiting agencies. In response, many of these nurses are now suing recruitment agencies for allegedly participating in “bait and switch” practices regarding their pay, writes Valerie Bauman for Newsweek.
Traveling nurses sue recruitment companies for brutal pay cuts
During the pandemic, the travel nursing industry experienced significant growth as many hospitals and healthcare systems grappled with staffing shortages amid Covid-19 surges. According Recruitment Industry Analystsrevenue from traveling nursing has tripled, from $3.9 billion in 2015 to around $11.8 billion in 2021. And at the peak of demand for traveling nursing, some nurses have seen their salaries soar to 125 dollars an hour.
However, as Covid-19 hospitalizations dwindled and many states ran out of pandemic relief funds, demand for travel nurses plummeted, leading to deep — and sometimes brutal — pay cuts.
Hannah Bailey, a 49-year-old nurse who contracted with Aya Health, initially agreed to a contract with an hourly rate of $85.86 with a weekly stipend of $1,000, from late March to late June. Then, five weeks later, his rate was suddenly reduced to $50.85 an hour. Weeks later, her rate was further reduced to $34.25 an hour, lower than what she was receiving in her old job without travel.
“I’m just barely breaking even,” Bailey said. “Sometimes I’m in the negative, like this week…I wouldn’t have taken the job at this rate of pay.”
According to Bauman, hundreds of travel nurses have reported similar cases of having their pay rates drastically reduced after initially being offered a much higher rate. Currently, several staffing firms are facing lawsuits alleging they engaged in fraudulent “bait-and-switch” practices of hiring a nurse at a fee while planning to reduce it after they move.
Austin Moore, attorney at Stueve Siegel Hansonsaid it has filed lawsuits against four staffing companies to date, including Aya Health, Maxim Health, NuWest Groupand Cross Country Health Care.
“We’re hearing from nurses across the country who felt absolutely taken advantage of and felt like the rug had been ripped from them,” Moore said. “It’s fraud because they knowingly participate in a bait and switch.”
While Aya and other providers said they would not comment on specific disputes, a spokesperson for Aya denied all wrongdoing, saying the allegations were “demonstrably false” and that the complaints failed to note “the reality that nurses received mid-assignment pay raises at various times during the pandemic.”
Additionally, Cross Country CEO John Martins said, “Our customers have faced unprecedented cost pressures, and while historically rare, if changes are required to a contract, our focus has always been to protect and insulate our clinicians from rapid fluctuations in compensation or the sudden loss of a temporary assignment to the greatest extent possible.”
Why these sudden pay cuts?
According to American Staff Association (ASA), a trade group that represents travel nursing and other staffing companies, hospitals have been the ones to demand that staffing companies reduce their rates for traveling nurses as Covid-19 rates rise. 19 were dwindling and that many of them lacked federal pandemic funds.
“When billing rates go down, the recruitment agency’s revenue goes down, and the agency must make commensurate reductions in its costs, including labor (the largest cost share) to maintain its profitability,” said Toby Malara, vice president of government relations at ASA.
However, Mindy Hatton, General Counsel of the American Hospital Association (AHA), said rates for travel nurses are set by recruitment companies, not hospitals.
“Travel nurse recruitment agencies have taken advantage of hospitals and healthcare systems during the pandemic by inflating prices to unsustainable levels, a significant proportion of which is not passed on to nursing and other staff,” said Hatton.
To address the high costs of travel nurses, the AHA, the American Health Care Association and the National Center for Assisted Living earlier this year asked the White House to investigate recruiting agencies. According to the organizations, placement agency prices are not directly correlated to the income travel nurses earn.
How these pay cuts could make the nursing shortage even worse
According to Maggie Ortiz, a nurse advocate, the practice of cutting wages sharply could potentially worsen the current shortage of nurses.
Based on data from McKinsey & Companythe United States is projected to have a deficit of 200,000 to 450,000 RNs by 2025. Although some nurses are leaving the profession due to retirement, a significant portion may leave due to a sharp decline in job satisfaction and an increase in other stressors.
For example, a recent survey of American Association of Critical Care Nurses found that only 40% of RNs said they were “very satisfied” with their jobs, compared to 62% who said the same in 2018. Overall, 67% of RNs said they planned to leave their current job at over the next three years. Of this group, 36% said they planned to leave within the next year, and 20% planned to leave within the next six months.
If traveling nurses continue to face sudden pay cuts, many will be less likely to engage in travel and help with shortages, and more are likely to leave the profession all together after the trauma of the Covid-19 pandemic, Ortiz said.
“Patients need to understand that there will likely be organizations that will close…we are seeing that there will be floors that will be closed. These will be units that will be closed,” Ortiz said. “Every nursing problem is a patient problem.” (Baman, Newsweek09/25)