Travel Nurse Unpaid Overtime: How You Might Be Underpaid and What You Can Do

Travel nurses are paid through complex packages that include hourly wages, housing stipends, and meal per diems. That structure is often designed to lower your overtime rate. Knowing how it works is the first step to knowing whether you are being paid correctly.

How Agencies Structure Travel Nurse Pay

Travel nurse pay packages are built from several parts. You usually receive a taxable hourly base rate, a housing stipend, a meals and extras allowance, and sometimes a completion or referral bonus. Agencies present the total as an attractive package. But the split between those parts matters a great deal for overtime.

Overtime is calculated on your regular rate of pay, not just your base hourly rate. If parts of your total pay should be in that regular rate but are not, your overtime has been too low. Agencies that set a very low base rate and a very high per diem can greatly reduce what they owe you in overtime without reducing your take-home pay in a visible way.

When Per Diems Must Be in Your Regular Rate

The FLSA says all pay must be included in the regular rate unless it falls into one of the specific carve-outs. Bona fide cost payments are one such carve-out. A per diem can be excluded from overtime only if it genuinely pays you back for costs you actually incurred.

In 2021, the Ninth Circuit addressed this directly in Clarke v. AMN Services, LLC. AMN is a major healthcare staffing company. The court ruled that per diem payments AMN made to travel nurses had to be included in the regular rate because they did not function as true cost payments. The per diems were paid at the same rate regardless of actual costs. That, the court found, made them wages, not payments.

The DOL confirmed the same principle in Opinion Letter FLSA 2024-01 (November 2024). To be excluded from the regular rate, a repayment must reflect costs actually incurred. The FLSA says all pay to be included in the regular rate. Exclusions must be earned, not assumed.

IRS Per Diem Rates and Your Regular Rate

The IRS sets per diem rates each year for lodging and meals. These are the amounts you can receive tax-free. For the current period, the high-cost locality rate is $319 per day and the standard rate is $225 per day under the IRS high-low method. Rates are updated each October 1.

If your agency pays you a per diem above these IRS limits, two things happen. First, the excess is taxable income. Second, a per diem that exceeds reasonable actual costs is harder to defend as a genuine cost repayment under the FLSA. Courts look at whether the payment reflects real costs. A per diem that clearly exceeds what any nurse would spend on housing and meals at a given location raises questions about whether it is really a wage paid in another form.

Bonuses That Must Be Included

Many travel nurses receive completion bonuses, extension bonuses, or results-based bonuses. If these were promised in advance, they are promised. Promised bonuses must be included in the regular rate before overtime is calculated.

An agency cannot pay you a $2,000 completion bonus at the end of an contract, ignore that bonus when computing overtime for weeks where you worked past 40 hours, and call the math correct. The bonus must be spread across the weeks of the contract and the regular rate redone for those weeks.

This is a common source of unpaid overtime. Agencies often apply the bonus as a separate payment with no adjustment to prior overtime weeks. If your completion bonus was not factored into your overtime rate for any week you worked overtime during that contract, you may be owed back wages.

Hours Worked vs. Contract Hours

Travel nurse contracts usually call for 36 hours per week, three 12-hour shifts. But many nurses work more than 36 hours often. Overtime is owed on every hour past 40 in a workweek. It is not owed only on hours past your contracted amount.

If your contract says 36 hours but you routinely work 44 hours and are paid straight time for all 44, you are owed overtime pay on those four extra hours. The contract number does not set the overtime trigger. The law does. Forty hours in a workweek is the line, and it does not move.

Joint Employment: Agency and Facility Responsibility

Travel nurses often have two agencys at once: the staffing agency and the healthcare facility. Under FLSA joint employer rules, both may be responsible for unpaid wages. If your agency paid less than owed your overtime and the facility gained from your work, the facility may share that liability.

Joint employment is significant because it expands who can be held liable. If the staffing agency dissolves or cannot pay a judgment, the facility may still be on the hook. An attorney can assess whether joint employment applies in your case and pursue recovery from the right parties.

The No Tax on Overtime Deduction

Starting with tax year 2025, the One Big Beautiful Bill Act created a federal income tax deduction for the overtime premium portion of your pay. This applies to the “half” in time-and-a-half, not to the full overtime earnings. The deduction is capped at $12,500 per year. This does not change how overtime is calculated or paid. But for travel nurses who often work overtime, it is worth knowing when you file your 2025 taxes in 2026.

What to Do

Pull your pay stubs from a recent contract. Find your listed hourly base rate and your per diem amounts. Look at any week where you worked more than 40 hours. Calculate what your overtime rate would be if the per diem were included in the regular rate, then compare it to what you were actually paid. The difference is your possible unpaid overtime per week.

Gather your contract documents, pay stubs, and any email or written records about your pay structure, per diem amounts, and bonuses. You do not need a complete record. Your agency is must maintain accurate time and pay records under the FLSA. If those records are missing or wrong, that works against the agency, not against you.

The deadline to file an FLSA unpaid wages claim is two years. It extends to three years for willful breachs. Every week of paid less than owed overtime has its own clock running. The sooner you act, the more you can recover.