Guides · Contracts

Red Flags in a Travel Therapy Contract Before You Sign

Published 8 April 2026Updated 3 August 202614 min read

Travel contracts are short, which makes people read them quickly. They are also drafted entirely by the agency, for the agency, and the parts that cost you money are rarely in the pay section. Here are the fourteen clauses worth slowing down for, roughly in order of how often they actually bite.

1. A taxable rate that is far below market

The clearest warning sign in the industry. If a licensed physical therapist is offered $20 an hour in taxable wages against a national median of $101,020 a year for the profession — about $48 an hour full-time, in the BLS May 2024 survey — the package is not generous, it is structured. The IRS requires the taxable portion to be reasonable compensation for the work performed; Revenue Ruling 2012-25 treats arrangements that relabel ordinary wages as reimbursements as failing the accountable-plan rules. The assessment lands on your return.

It also quietly shrinks your overtime rate, your unemployment benefit if the contract is cancelled, your Social Security earnings record, your disability benefit and the income a lender will count.

2. Guaranteed hours that are not guaranteed

Look for who guarantees them. "The facility has indicated 40 hours per week" is not a guarantee; it is a forecast. A real clause says the agency will pay you for the guaranteed hours whether or not the facility uses them, and specifies how many call-offs are permitted before the guarantee lapses. Vague census language — "hours subject to patient volume" — means you carry the volume risk.

3. Stipends pro-rated on missed hours

Most contracts pro-rate the housing and meal stipends against hours worked, so a 24-hour week can cost you far more than 16 hours of taxable pay. This is defensible from a tax standpoint — a per diem tracks days away — but you should know the formula before you sign, and you should know whether the pro-rating applies when the facility cancels the shift.

4. Asymmetric cancellation terms

Read both directions. A common shape: the traveller owes a penalty for terminating early, while the facility may cancel with little or no notice and no compensation, including before the start date. If you are giving up a lease and driving 1,400 miles, ask what you are owed if the assignment evaporates the week you arrive. Some agencies will add a modest cancellation protection clause if asked; almost none volunteer it.

5. Clawbacks on travel and licensure reimbursement

Travel allowances, licence fees, certification costs and sign-on bonuses are frequently repayable if you do not complete the contract — sometimes including when you leave for cause, or when the facility ends the assignment. Find the trigger language. "Fails to complete for any reason" is very different from "voluntarily resigns."

6. Completion bonuses with all-or-nothing conditions

A completion bonus that requires perfect attendance can be lost to one sick day. Ask what "successful completion" means in the document, not in conversation, and whether the bonus survives a facility-initiated cancellation.

7. Professional liability cover that is claims-made

This one is therapy-specific and badly underexamined. Occurrence-based cover responds to any incident that happened while the policy was active, whenever the claim arrives. Claims-made cover responds only if the policy is still in force when the claim is filed — and travel therapists change employers every few months. Ask which type the agency carries, what the limits are, whether tail coverage is provided when the assignment ends, and whether you are named or merely included under a blanket policy. Many travellers carry their own individual policy for exactly this reason.

8. Productivity requirements you cannot see yet

Skilled nursing and home health contracts increasingly carry productivity expectations that live in a facility addendum you are not shown until day one. Ask for the number before you sign, and ask how documentation time is treated. A 90% productivity standard that excludes documentation is a materially different job from one that includes it.

There is a professional dimension here too. Under the APTA Code of Ethics, the AOTA Code of Ethics and the ASHA Code of Ethics, clinical judgment about what a patient needs is yours and is not delegable to a productivity target. If a contract or an addendum implies otherwise, that is a reason to walk, not to negotiate.

9. Floating and cross-coverage clauses

"May be required to float to other facilities or settings as needed." A pediatric outpatient SLP being floated to adult acute care is not a scheduling inconvenience; it is a scope and competence problem. Ask for the float radius in miles, the settings involved, and whether mileage is paid.

10. Automatic extension or right of first refusal

Some contracts extend automatically unless you give notice by a specified date, or bind you to accept an extension offer at the same rate. Beyond the inconvenience, this interacts badly with the twelve-month rule: stacked extensions in one work area can push you past a year and end the tax-free treatment of your stipends (see tax home explained).

11. Non-competes and no-poach language

Look for a clause preventing you from taking a permanent role at the facility, or from returning through a different agency, for a period after the assignment. Enforceability varies enormously by state and by the terms, and the legal landscape has been contested in recent years — but an unenforceable clause can still cost you a job offer, because the facility will not fight it on your behalf.

12. Overtime defined only at 40 hours

Several states require daily overtime — California is the best-known, at over 8 hours in a day — and some contracts define overtime purely at 40 hours a week. State wage-and-hour law generally overrides a contract term that provides less, but a contract written that way tells you how the agency's payroll is likely to behave in practice. Confirm how your specific state's rules are applied.

13. Company housing terms buried elsewhere

If you take agency housing, find out what happens on early termination, whether pets and guests are allowed, what the lease overlap is at the end of the contract, and who pays if you have to move out before your last shift. Read the stipend versus company housing comparison before deciding.

14. Arbitration, venue and choice of law

Most agency contracts require arbitration, in the agency's home state, under that state's law, sometimes with costs shared. That is not automatically unreasonable, but it is worth reading before a dispute rather than during one. Note whether the clause covers wage claims and whether it waives class actions.

A note on posture

None of these clauses means the agency is acting in bad faith. Standard contracts are standard because they are written once and reused, and most recruiters have never been asked about clause 9. Asking specific, calm, document-referenced questions marks you as a professional who will be straightforward to work with — and in a market where good therapists are scarce, that is leverage, not friction.

The two things worth being genuinely firm about are the taxable rate and the guaranteed-hours language. Everything else is a matter of knowing what you agreed to. Before you sign, put the final numbers into the pay calculator so the figure in your head matches the figure that will land in your account.

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