An expose published by NBC News reveals a troubling trend that appears to be occurring more in the world of hospitals and RNs: some hospitals are now forcing new entry-level RNs to sign restrictive contracts that stipulate the nurses will be responsible for paying back “training costs” if they quit or are fired from their jobs before their contract length is up.
As if the world of healthcare isn’t in trouble enough, the trend has left some nurses who are new to the field with hefty bills reaching up in the thousands after quitting jobs that they found to be detrimental to their physical and mental health. Jacqui Rum was one of those nurses, and she told her story to NBC News, along with the story of how she is now being told she must pay back $2K to Los Robles Regional Medical Center after she quit her job 13 months in for what she said were unsafe working conditions. “I didn’t even have time to take a lunch break, my hair was falling out, and the level of stress just wasn’t sustainable,” she told the outlet.
The hospital has hired a collections agency and is now threatening additional legal fees and interest if she doesn’t pay up.
“We’re desperate for a job, we just got out of school, we don’t know any better,” Rum, 38, told NBC News of why she and several other new nurses signed the contract.
How Hospitals Can Charge Nurses for Quitting
The contract that Rum signed may have been one commonly known as a “residency contract.” The contracts list that the hospital will provide “training” valued at an amount that varies from $2,000 to $5,000 to as high as $10,000 and upwards to the nurse in exchange for that nurse working for the hospital for typically at least 2 years. One Tiktoker even claims the fee is $20K at VHS in Las Vegas.
@dimplesqueennini Replying to @irisayalaa nurse residency is the reason you have to pay contract break fees, currently it is set at 20k for VHS in Las Vegas. #nurseresidency #nurse #newgradnurse #residency #residencylife #newgradrn #newgradrnjobs #rn ♬ original sound – Dimples Queen
If the nurse quits or is fired before that 2 years is up, they will be responsible for paying the hospital back for the value of the training. The amount may be prorated based on how long you actually worked or just one flat fee.
While new grade or RN residency contracts are getting more attention now, these types of contracts have been around for a while. In fact, National Nurses United called on the Federal Trades Commission (FTC) in 2021 to formally investigate what they called “New Grad” or “RN Residency” contracts.
The National Nurses United (NNU) noted that the contracts are disingenuously dressed up as a form of enhanced education with a set cost or “tuition.’” But, in fact, “the ‘education’ is the mere basic on-the-job training necessary to perform the nurse’s job while the true intent of the contracts is to indenture nurses to the employers.”
The NNU explained that such contracts are common for new grad RNs who have never worked in a hospital before, but can also occur for nurses who are changing positions within a hospital or moving to a more specialized unit. Despite the proposed “training” the hospitals claim to offer, the NNU was clear that such programs are not only exploitative but harmful to the entire healthcare industry.
“The impact can be especially damaging in hospital markets with high levels of concentration where one, or even all, potential employers in the market require such an agreement as a condition of employment,” said the NNU.
Employment experts told NBC News that the practice is a harmful one because the cost of training is not something a nurse should take on; it’s a normal part of running a business for the hospital or facility. And the outlet also pointed out forcing nurses to stay in positions or at hospitals they are not comfortable in or do not want to be in could contribute to the nursing shortage too—by forcing them to burnout conditions or making them feel trapped, hospitals could effectively be causing more nurses to leave the nursing profession altogether as soon as their contract is up, or be scared to move to another unit or position out of fear of getting hit with a hefty bill.
Some laws have tried to prevent hospitals from enacting the practice of new grad and residency RN contracts. For instance, The California Nurses Association, an affiliate of NNU, was a leader in getting a bill signed into law in 2020 that said that nurses and other healthcare workers could not be charged for their own training costs except in very limited circumstances. Despite that, Rum is still getting letters demanding payment, says NBC News.
Nurses Call Out The Hospitals on TikTok
Social media is full of nurses sharing their stories of being charged after breaking a contract. Many of their stories are the same: a new nurse graduates, signs a contract without really realizing what they even signed, and then after finding themselves in a situation where their physical or mental health is suffering or because of an outside circumstance like moving, they quit—only to be hit with a letter in the mail stipulating that they now owe the same hospital for breaking their contract.
“When I was a brand new nurse that I signed a two-year contract,” said labor and delivery nurse Jackie in a TikTok on her channel. But a year into the contract, Jackie found herself suffering mentally.
@jackiiee.o Replying to @ariahsshaii I am an HCA hospital hater now & forever 🏽 #nurse #nursetok #nursingtiktok #nurselife #newgradnurse #newnurse #nursecontract #QuakerPregrain #nursingstudent #nursing #nursingschool ♬ original sound – jackie
“I decided to leave after a year because it was either that or go into therapy,” she continued. “And I decided you know what, I’m just going to live my best life and I’m gonna go over to labor and delivery and see how it is. And I got a nice little email [and] lots of mail for the amount of money that I owed—a couple thousand.”
Another TikToker who goes by the handle @wholelifenurse shared her story of how she was forced to pay back approximately $7,000 to her hospital for an RN Residency program after she got engaged and moved to a new state to be with her fiance.
@wholelifenurse Replying to @hiddenvallieranch new grad contract buyouts #newgradnurse #newgradrn #newgradnurselife ♬ original sound – Whole Life Nurse
“I had to pay all of it,” she shared with her followers. “They sent letters threatening legal action. It was ridiculous.”
Reddit Reacts To Hospitals Charging Nurses For Ending Contracts
Being forced to pay back training costs per contract may not be the only way nurses could have to pay up. Other things new nurses and any nurses looking to take on a new job should look for are the rules surrounding tuition reimbursement and assistance as well as “sign-on” bonus.
Reddit is full of stories of new nurse grads, especially those who got lured in by tempting and significant sign-on bonuses for nursing jobs, only to realize that the multi-K bonus came with a catch: if they quit or got fired, they could be responsible for paying some or all of it back.
While you’ll need to check your own contract very carefully to see what you’d actually owe if you quit or got fired, some Redditors pointed out that in many cases, you’ll only be responsible for the part of the sign-on bonus you received. For instance, if the bonus was spread out over two years and you didn’t receive all of it, you may only have to pay back what you did get.
Regardless, however, it’s always worth considering why hospitals are offering such a hefty sign-on bonus, knowing exactly what you’re signing, and seeking legal counsel if needed.
The other way nurses may get hit with unexpected payments are through tuition assistance programs. If you’re a new nurse or a nurse who has worked anywhere near a hospital, you’re probably familiar with hospital-run programs that offer you tuition assistance in exchange for working at the facility for a set amount of time.
The exact details of programs differ, but in general, the programs work like this: the hospital agrees to fund all or part of your tuition to get training as a nurse or further your education in a related field (such as getting your BSN or becoming an APRN) in exchange for your agreeing to work at the hospital for a set length, such as 2-5 years after you earn your degree or certification.
So what happens if you quit or get fired before you fulfill your work requirement after the hospital has paid for your tuition? Again, the exact rules vary, but in some hospitals, the agreement you signed could say that you’ll owe them that money back.
What Nurses Can Do to Avoid Paying
- Read your contract carefully before signing: If you’re a nurse about to graduate, be sure to talk with the hospital you’re interviewing with very carefully so you know exactly what kind of contract they offer and if it includes any type of repayment stipulations.
- Try to negotiate: If you know you don’t want to be locked into a contract that could make you pay up if you quit or move positions, try to interview at different facilities to find one that doesn’t have a contract stipulation. And don’t be afraid to negotiate, even if they do offer you a contract that includes repayment.
- Find a new job that will pay your buyout fee: If you’ve already signed a contract and are unhappy with your position and want to break your contract, one strategy you could take is interviewing for a new position and if they offer you the job, asking if they will help you cover the costs of buying out your contract. Not all hospitals will offer this, of course, but it could be part of your negotiation in the hiring process and is definitely worth your time and investment to look into.
- Talk with your doctor: Some Redditors have also suggested strategies such as talking to your doctor if your physical or mental health has been affected by your job, as this might mean the contract is no longer legally binding.
- Verify that the “training” actually happened: Additionally, if the “training” you were provided did not actually occur as outlined in the contract (for instance, if you took on your own patient load sooner than expected, if your preceptor quit, if resources were not made available to you, etc.), it may also no longer be legally binding.
- Break the contract anyways: Last but not least, some nurses just break the contract and hope the hospitals never actually force them to pay up. Some don’t, but as is clear, some definitely do—one TikToker said the hospital can even take what you owe out of any earned PTO.
- Consult an attorney: The bottom line is this: always know exactly what is in any contract you are signing and always talk to a lawyer before disputing any contract on your own or taking action into your own hands.
- Contact your nursing union: You may also be able to turn to your nursing union for help if you are hit with a bill for breaking contract.