RN Residency/ New Grad program contracts

TakeTwoAspirin, MSN, RN, APRN · Jan 13, 2009

These contracts are becoming more and more popular. Hospitals are sick of training new grads only to have them leave once they have some experience and go to a competing hospital.

However, it is unusual that the amount of money she would have to repay is not pro-rated to length of time served under the contract. $15,000 sounds a little high, but I've heard of contracts varying between $5,000 and $10,000 over a two year contract period.

I also would want to know more about if they terminate her for "any reason". What if their census is low? Would that count as "any reason"?

Certainly there are questions you would need to have answered/clarified before she sign it, but I would doubt that she will be offered a position as a new grad without signing something similar.

jjjoy, LPN · Jan 13, 2009

It's true that this kind of contract isn't uncommon. $15,000 does seem rather high. If one had to leave in less than 4 months, they would likely be paying back more than they took home in paychecks!

Personally, I'd try to avoid such a contract unless I was already very familiar with the employer and felt I could trust both them and myself to be able to fulfill the contract.

I totally understand the hospital's position in wanting to recoup some of their invesment in a new grad if they end up leaving. However, I think a couple thousand dollars contract breakage penality would be discouraging enough to keep people from quitting without really good reason and wouldn't threaten to so severely penalize those who legitimately need to consider breaking their contract. I think they could offer an alternate contract that incentivises staying instead of penalizing leaving. Such as relatively lower starting pay that wouldn't need to be repaid, but guaranteed raises or bonuses at the end of specified time periods. At the end of the new grad contract, the nurse would then fall under regular wage policies.

However, if I couldn't find a better alternative and signed on to such a contract, I would look at the first six months working as the final semester school and continue to live as frugally as I did as a student, hoarding as much of each paycheck as possible and putting into a "just in case I can't fulfill my contract" account. That way if things went totally sour where I was working, I could better afford to leave - and count it as tuition in the school of hard knocks.

emilysmom,RN · Jan 13, 2009

I had to sign a contract but it was because I was getting a sign on bonus. I got 6K and if I quit or was fired within a year I would have to repay with a 12% prorated interest depending on how long I was there. I started end of Aug and I am still there plan on sticking it out till end of Aug then decide if I want to stay or go to my other parttime job in LTC.

netglow, ASN, RN · Jan 13, 2009

I'd fax a copy of the guts of that one to your local media... good for people to know why the nursing shortage will grow. Also I'd post it at school so everyone has a heads up.

just_cause, BSN, RN · Jan 13, 2009

I see no issues with a hospital wanting to ensure that their incentive to join their hospital provides them an incentive to train you by having you work as an employee...symbiotic. They need to have a method to not be 'burned' by recent grads walking shortly after they receive efforts/time/training. That being said to walk away you should be able to do so for the cost of training that was spent on you.

v/r

Whispera, MSN, RN · Jan 13, 2009

I'd want to make sure that if the nurse has to leave due to something beyond her control (being "downsized" or getting a serious illness, for instance) she can do so without that humongous penalty.

netglow, ASN, RN · Jan 13, 2009

I am not aware of any other "professional" position that requires a new graduate to pay for learning at their first job. As well as be potentially financially penalized if they do not turn out to be a good fit. Learning is something that is necessary in all "first" positions. I'll add to that... All "tenured" nurses should then be under the same pressure if they choose to make a move... ie med/surg to ER, ICU etc. as medicine is a business where continual learning is an absoulute must. Who knows maybe you are good in med/surg but can't hack it in ICU once your there - you'd be out on your butt and in debt 15,000. There are a lot of nurses "with years of work experience" that still don't have it together... my guess is that under those conditions... many would never have advanced... I am not saying that someone who ends up not being able to meet goals in learning should be kept on staff, no, not that at all. I just really disagree with the $$$ threat involved. It is quite easy to put pressure back on a corporation for this kind of thing.

:smiley_ab

jjjoy, LPN · Jan 13, 2009

I don't agree with the approach either, 2ndwind.

I do think that IS reasonable for new, inexperienced staff to be paid at a lower rate until such time as they can and do perform at the same general level as other staff doing the same job. Since new grads usually can't and shouldn't be asked to perform at the same level as experienced staff, I think it would be fair to pay them less. They'd also have fewer responsibilities than experienced staff during that learning time.

Also, if an experienced nurse wanted to move to completely new area of nursing, they might need to take a pay cut initially. The benefit is that they'd be getting paid to learn a new specialty which in the long run would likely lead to more opportunities and make it worth the initial sacrafice.

But that's all off topic... anyone else have advice for the OP?

sbyramRN · Jan 13, 2009

I wouldn't sign it. I am a new grad who has been hired on at one of the largest children's hospitals in the US. I will be working in the ER, but I do not have to sign any contract...that is plain ridiculous. I would tell her to keep looking.

Whispera, MSN, RN · Jan 13, 2009

I've heard of hospitals that give scholarships and you have to pay back if you don't work for them for 2 years after graduation, but what you're talking about is way too much!

nightshift82 · Jan 14, 2009

Thanks for all the adivice. My daughter is already looking again. I did mis- speak the program was for 5-6months. I still feel the contract is completely wrong. If this is a new trend then it is disappointing and just a very BAD idea. I have no problem with hiring at the low end of the starting salary but do not agree with this type of contract , especially since she who have to pay back the $ if laid off. It was not pro-rated either.

I work in a unit where there was very little turn over until we > our bed #'s ina new unit. For about 3 years we were always orienting but it seems to have gotten better. It is tough to orient new staff and just when they are set, they leave,but it may be for many reasons: family related illness, spouse relocating,etc. It may also not be the right fit and the person is not capable or has a bad attitude. If that is the case, it would be worse for the staff who are working w/ these people because they are not happy and make it bad for everyone.

My husband who is a scientist could not believe it and agreed that it would never happen in his profession-even though it still was about for his training. My daughter is NOT signing this document but I do feel bad for any new grad who gets caught up in the packaging of this program and signs it. I also saddens me that my daughter has lost some of her excitement but it has been a good learning experince.

New Grads beware of contracts!