Many nurse practitioners get very anxious when handed an employment contract for a new position. It is often long, with paragraph after paragraph of legal mumbo jumbo. Some nurse practitioners even resort to hiring a lawyer to review the contract.
I think having legal counsel review the contract is prudent, depending on the situation, but it can be costly and unnecessary most of the time. I wouldn’t recommend it.
Most employment contracts are very generic legal documents with just your name pasted into it. There are other various elements that are usually changed as well such as compensation numbers, out clause, non-compete clauses, addresses, and job duties. (Quick tip: Most legal documents you hire a lawyer to draft are just generic templates where they paste your name into it. Be wary of what you pay a lawyer to do for you. You can find free legal templates online very easily and just “paste” information into it. I do it all the time per my lawyers advice.)
So, what if you don’t want to hire a lawyer to review your employment contract? That is fine, I never have. The four most important elements you need to understand are the compensation package, duration of the contract, the out clause, and the non-compete clause.
Compensation package: It is absolutely CRITICAL you understand how you are being paid. Is it a straight salary? Hourly? Salary with production? 1099? Straight production? Is there a sign-on bonus? You need to ensure this is outlined clearly.
Make sure that the salary is clearly defined as either a total amount for the year or hourly. If it is a salary, you need to ensure there is a clear definition of what time requirement there is to meet the salary. If it is not clearly defined, they could make you work 60 hours a week. There better be an obvious definition of what is considered full time.
Remember, the less hours you work at your full time job means you have more time to spend on a side business. This builds your wealth, not busting your ass for someone else! This is a critical principle of the Elite Nurse Practitioner Model.
There also needs to be compensation for any overtime worked outlined. This should be an hourly rate. If there is no overtime offered, you should stay clear of this job. You will not be able to implement the Elite Nurse Practitioner Model if you are working 60 hours a week at your full-time job.
If you are being paid hourly, this amount should be crystal clear. Again, make sure there is terminology that provides for overtime worked. Do not settle for earning your standard hourly rate past 40 hours, there should be an incentive. Don’t let people take advantage of you! You are worth far more than you think.
What about production? This is where it can become confusing. You must understand the various forms of production. Typically, there are 2 forms: Percentage of collections and RVU production. Read the article about these compensation models to fully understand them before you read your contract. The production outlined in the contract should be clear and to the point. If it is confusing, ask us over at the Elite Nurse Practitioner Group on Facebook.
DO NOT SIGN A CONTRACT IF THERE IS A BONUS CAP. If there is a bonus cap with your production, this needs to be renegotiated. There is nothing worse than hitting the bonus cap and working for free. I have been there, it sucks. It is very demotivating. Don’t go there, trust me. It is the reason I started my own side business, I was sick of making other people money.
What about a sign on bonus? Understand the terms surrounding the bonus. Is it paid all up front? Do you have to pay the bonus back if you break the contract? If so, is it prorated? Make sure it is prorated. What if you broke your contract 4 months early yet gave this employer 20 months and they required the bonus to be paid back in full? You would be scrambling. Make sure it is prorated!
Lastly, is there paid time off? There should be a clear definition on how it is accumulated and how you can use it.
Duration of contract: This is how long the contract is in effect for. The standard duration of a contract is usually 2 years. I personally do not like a 2-year contract because that is a large time commitment. I prefer the contract to have no duration associated with it at all. I can leave whenever I want, and the employer can let me go whenever they want. That is freedom!
Out-clause: There should be clear cut terminology on how either party can leave the contractual obligation. Read this section very clearly. Do you have to give the employer a 90-day heads up? Or can you leave with a 30-day notice? What events break the contract without penalty? What you mostly need to know here is if there is no penalty associated with leaving early. Make sure you understand how you can “get out” of the contract. Again, this is freedom producing. Being locked into a contract is like modern day debt slavery.
Non-compete clauses: These are always a touchy subject during job negotiations. I personally would never sign one. It is a fear tactic used by employers to enslave you essentially. Remember, we are looking for freedom by utilizing the Elite Nurse Practitioner Model. If you work in a saturated market though, then this might be unavoidable. You gotta do what you gotta do to earn a living. So, what if you have a non-compete?
You need to ensure the radius from the employment location is as small as possible, the length of the non-compete clause be as short as possible, and the scope of competition you are prohibited from engaging in is as narrow as possible. These are items you need to negotiate for if there is a non-compete and these need to be clearly defined in the contract.
Outside of that, those are the 4 main elements of a contract you need to ensure you understand. A lot of the other terminology in a contract is inconsequential to the job.
Job contracts are designed to protect the employer mostly. They are oppressive for the nurse practitioner, in my opinion. They keep you tied down. Personally, the only contract I would sign these days would include:
Salary with RVU production clearly defined with no bonus cap.
A bonus that is prorated with it being free and clear after 1 year.
No duration on the contract.
A free out-clause for both parties that would allow either one to terminate the contract at any moment.
And NO non-compete clause.
Many would be stressed to sign this, but it is a very freedom producing contract in reality. You work, you earn your pay, you can leave at any time, and you can focus on outside interests such as your side business. Remember, freedom should be the ultimate goal if you follow the Elite Nurse Practitioner Model. Having a contract that restricts what you can do is very unfree.
The eBook “The Elite Nurse Practitioner Model” is being released February 1st! Those that preorder it or order it during the initial launch week, will receive a discount and also get a free copy of “MARKETING FOR THE ELITE NURSE PRACTIONER SIDE BUSINESS.” Stay tuned for more details in the upcoming week!