Calculating overtime pay for travel nurses is far more complex than multiplying an hourly base rate by 1.5. Under federal labor law and significant federal court rulings, your true overtime rate must often incorporate the value of your non-taxable housing and meal stipends into your regular rate of pay.
If an agency calculates overtime simply as 1.5 times your taxable base wage, they may be shortchanging your weekly earnings under the Fair Labor Standards Act (FLSA).
The FLSA regular rate of pay requirement
Under Section 7(e) of the Fair Labor Standards Act, employers must pay non-exempt employees overtime at a rate not less than one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.
The regular rate is not simply the hourly wage stated in your contract. It is defined by federal law as the total remuneration for employment paid to the employee, divided by total hours worked in that week, subject to specific statutory exclusions.
While genuine travel expense reimbursements can be excluded from the regular rate, federal courts have ruled that when travel stipends function as compensation tied to hours worked, those stipends must be included when determining the regular rate for overtime calculations.
Review federal overtime regulations directly on the U.S. Department of Labor portal.
The Clarke v. AMN Services legal precedent
A landmark decision by the U.S. Ninth Circuit Court of Appeals, Clarke v. AMN Services, LLC, transformed how healthcare staffing agencies must handle overtime on travel contracts.
The court ruled that AMN Services improperly calculated overtime by excluding per diem allowances from travel nurses regular rate of pay. The court noted that because the agency prorated stipends when nurses worked fewer hours and allowed local nurses to receive similar compensation, the stipends functioned as disguised wages rather than pure expense reimbursements.
As a result of this and similar class-action lawsuits, many agencies now use blended overtime formulas that pay significantly higher overtime rates, often $60 to $100 per hour, even when the base taxable rate is $30 per hour.
You can verify how overtime hours alter your weekly take-home using our Contract Analyzer.
California daily overtime rules for travel nurses
Travel nurses working in California encounter additional overtime protections. California state law mandates overtime pay of 1.5 times the regular rate for all hours worked beyond eight in a single day, and double time for hours worked beyond twelve in a single day.
When you work 12-hour shifts in California hospitals, four hours of every shift are subject to daily overtime calculations.
Ensure your travel contracts correctly calculate overtime and maintain compliant tax homes with our Tax Home Quiz.
Frequently asked questions
How does the FLSA define regular rate of pay for travel nurses?
The regular rate equals total weekly remuneration divided by hours worked. Under federal court precedent, stipends tied to hours worked must be included in overtime calculations.
Why should travel stipends be included in overtime rate calculations?
When stipends function as disguised compensation rather than pure expense reimbursements, excluding them from the regular rate depresses lawful overtime pay.
What did the Clarke v. AMN Services ruling decide for travel nurses?
The Ninth Circuit ruled that AMN Services improperly calculated overtime by excluding per diem allowances from travel nurses regular rate of pay when stipends were prorated.