Travel nurses, therapists, and other contingent workers are the backbone of many healthcare facilities. But managing travel compensation for this vital workforce can be a complex task. Different locations, tax regulations, and client requirements all add to the challenge.
This is where having the right technology in place becomes crucial. Imagine a system that streamlines the process, ensures consistency across your staffing agency, and helps you avoid compliance headaches.
Key Areas for Consistent Travel Compensation:
Tax Home
Although not a requirement, the creation of an informational Tax Home Declaration Form that can be delivered and periodically updated can help you educate travelers on your staffing agency’s understanding of the IRS’s tax home requirement. Enterprise level technologies can automatically assign these documents and track when they should be redistributed for future updates.
Minimum Wage
Configuring a compensation package that takes a traveler below state minimum wage standards for their profession is a major red flag. To prevent this from occurring, utilize technology that allows you to set minimum wage values by licensed caregiver by state. It enforces those standards in their deal compensation tool by lowering tax-free stipends and lodging so that their hourly wage is at least equal to your defined minimum wage. More complex solutions allow you to determine how and which stipends should be reduced to maintain your agency’s standards.
12-Consecutive Month Rule
Although this is an area of IRS guidance that is open to interpretation, many agencies use a 12 out of 24-month rule of thumb to determine if a traveler has lost their tax home status, and future assignments in the same location are no longer eligible for tax-free stipends and lodging. A travel compensation deal tool that can create and enforce your agency’s 12-month rule consistently is a valuable safeguard.
Minimum Distance Guidelines
The minimum distant between a traveler’s tax home and a client facility’s work location is governed by both IRS guidelines and facility-specific requirements. To facilitate compliance, your technology should not only allow for the configuration of the IRS minimum distance guidelines but also enable adjustments according to the client’s definition of a traveler. To ensure adherence to these guidelines, the deal calculation tool should dynamically apply these values to determine and manage the eligibility for tax-free stipends and lodging.
General Services Administration Table Integration
When a traveler is eligible for tax-free stipends and lodging, offering the correct amount is very important. Rates are not only geographically determined but are seasonal as well. These rates are published and updated by the General Services Administration (GSA) and should be directly integrated into your technology.
Margin Protection
A healthy travel business starts with creating compensation packages that maintain your agency’s needed margins. Good technology can automatically create a compensation package that determines an hourly wage based upon target margin, taxable and non-taxable payments, employment burdens, agency benefit offerings and bill rates. Knowing that there can be an exception to every situation, a travel deal tool should allow a permissioned individual to override configured rules and give immediate feedback on margin impact.
Travel Contract Agreements
Travel deals almost always come with conditions discussed and agreed on during the interview process. Technology can help you document and incorporate those conditions into a travel assignment agreement that both the caregiver and client facility can review and electronically sign. A bonus is a system that can track agreement signatures to make sure they are executed prior to assignment start.
Take Control of Your Travel Compensation
Navigating the complexities of travel nurse compensation while adhering to IRS guidelines and maintaining agency standards can be challenging. However, by implementing robust CTM technology solutions that automate compliance with the 12-consecutive month rule, minimum distance guidelines, and GSA rate integration, agencies can mitigate the risk of human error and ensure all stipends and lodging allowances are accurately calculated. Ultimately, these technological safeguards not only simplify the administrative burden but also help foster trust and transparency between the agency, the client facilities, and the travel nurses themselves. Embracing these tools will position your agency to deliver fair and competitive compensation packages, thereby enhancing your ability to attract and retain top talent in the ever-competitive healthcare market.
