A locum tenens contract decides what happens when something goes wrong: a shift is canceled, a claim is filed two years later, a clinic you liked offers you a job. The hourly rate gets the attention, and the clauses about cancellation, malpractice coverage and restrictions afterward often matter more.
This guide goes through the sections of a typical locum tenens contract and the questions each one should answer. It explains how these terms generally work. It isn't legal advice, contract law varies by state, and a healthcare attorney can tell you what a specific agreement means for you.
Which locum tenens contract you're reading
Locum work usually involves more than one document. An agency agreement covers your relationship with the agency across every assignment. An assignment confirmation covers one placement: dates, rate, location. A marketplace has terms of use plus the terms attached to each shift.
Restrictions that outlast an assignment, like non-competes, tend to sit in the general agreement, which is the one you signed first and read fastest. Read both.
If you're new to locum work, Locum Tenens 101 covers the background before the contract specifics.
Pay terms in a locum tenens contract
Bill rate and pay rate
In the agency model there are two rates. The bill rate is what the facility pays the agency. The pay rate is what the agency pays you. The difference covers the agency's costs and margin, and agencies generally don't disclose the bill rate.
You can ask what it is. Whether or not you get an answer, the pay rate is the figure that belongs in writing, along with exactly which hours it applies to.
Where the rate is posted on a listing, as it is on Rediworks, you see it before you decide whether to apply. The terms around the rate still need reading.
Paid hours and cancellation
The questions that determine what a shift actually pays:
- Are you paid for scheduled hours or worked hours?
- If the clinic sends you home early on a slow day, what are you paid?
- Is time spent charting after close paid?
- How much notice does the facility have to give to cancel a shift?
- If a shift is canceled inside that window, are you paid anything?
- Is there a guaranteed minimum number of hours across an assignment?
A contract with no cancellation term leaves the cost of a late cancellation with you, including any travel you've already paid for.
Overtime, holidays and differentials
Contracts differ on whether a long shift, a holiday or a weekend is paid at a higher rate. If the contract doesn't mention a differential, there isn't one. Our guide to how locum tenens physician pay works shows how to compare a locum rate with a salary once you know which hours are paid.
Malpractice coverage in a locum tenens contract
The malpractice clause should tell you three things: who provides the coverage, what type of policy it is, and what happens when the arrangement ends.
Occurrence and claims-made policies
An occurrence policy covers an incident that happened while the policy was in force, whenever the claim is filed. If a patient files a claim three years after your last shift, the policy that was active on the date of the visit responds.
A claims-made policy covers a claim only if it's filed while the policy is active. When the policy ends, later claims about earlier care aren't covered unless extended reporting coverage, called tail coverage, is purchased.
If the contract provides claims-made coverage, it should say who pays for the tail. When the contract doesn't address it, ask, and ask for the answer in writing.
Limits and proof of coverage
The contract or a certificate of insurance should state the coverage limits per claim and in aggregate. States and facilities set their own requirements, so the limits that are adequate depend on where you're working.
Ask for a certificate of insurance that shows your coverage, and ask how you're identified on the policy. An attorney or insurance broker can explain what the wording means for your ability to rely on it. Our malpractice guide covers how coverage for locum work is generally set up.
Licensing and credentialing terms
An assignment in a new state can mean a new license and, for prescribers, a new DEA registration, since a separate DEA registration is required in each state. The contract should say who pays for them. Some agencies reimburse licensing fees and some don't.
Two more questions belong here. If a license or the facility's credentialing takes longer than expected, is the start date moved or is the assignment withdrawn? And if the delay is on the facility's side, are you paid for the dates you held?
Compact licensing can shorten the wait for some roles. The Interstate Medical Licensure Compact lets eligible physicians apply to several member states through one application, with each state issuing its own license. The Nurse Licensure Compact gives RNs in compact states a multistate license, and it covers RN and LPN/VN licenses only, so it doesn't extend to nurse practitioners.
Non-compete and exclusivity clauses in locum contracts
Restrictions on working with a facility directly
Agency agreements commonly restrict you from working for a facility the agency placed you with, except through the agency, for a set period after the assignment. The clause may also require the facility to pay the agency a fee if it hires you.
Read it for four things: how long the restriction lasts, which facilities it covers (the one clinic, or every location the operator owns), what activity it restricts (permanent employment, locum shifts, or both), and what happens if the facility wants to hire you. A restriction limited to one clinic for a few months is very different from one covering an entire regional chain for two years.
Whether a restriction like this can be enforced depends on state law, and states differ widely. If the clause would affect a job you might want, it's worth an attorney's time before you sign.
Exclusivity
An exclusivity clause requires you to take locum work only through one agency for a period. It limits where you can find shifts and leaves you dependent on one source of work. If a contract includes one, find out what you're getting in return and how to end it.
Travel and housing terms
Not every locum arrangement includes travel or housing. Traditional agency assignments away from home often do. Rediworks doesn't arrange or pay for either. When an agreement does include them, it should state:
- Whether housing is booked for you or paid as a stipend, and the amount
- What travel is covered and whether there's a cap
- When reimbursement is paid
- What happens to prepaid housing if the assignment is cut short
How a stipend is taxed depends on your circumstances, including where the IRS considers your tax home to be. An accountant can tell you how that applies before you rely on a stipend being tax-free. Our guide to locum tenens travel and housing covers the practical side.
Termination terms in a locum tenens contract
A termination clause sets how either side can end the arrangement. Look for:
- Notice periods on each side. A contract that lets the facility end the assignment on a week's notice while requiring a month from you puts more of the risk on you.
- The definition of "cause." Termination for cause usually needs no notice. A definition as broad as "failure to perform" gives the other side wide discretion.
- Completion requirements. Some contracts charge a penalty if you leave before a minimum number of shifts. Check whether there's an exception for illness or a family emergency.
What a clear locum tenens contract contains
A locum tenens contract that answers the questions in this guide will:
- State the rate and exactly which hours it applies to
- Say what you're paid when a shift is canceled or cut short
- Identify who provides malpractice coverage, the policy type and limits, and who pays for tail coverage
- Say who pays licensing and registration fees
- Define any restriction on working with a facility by duration, scope and activity
- Set notice periods for both sides and define cause
If the document is silent on one of these, the answer isn't in your favor by default. Ask the question and get the reply in writing.
Getting a locum tenens contract reviewed
A healthcare attorney can review a locum agreement, and for a general agency agreement you'll work under for years, one review covers every assignment that follows. Some state medical societies and professional associations offer contract review or referrals to members. An accountant is the right person for questions about stipends and how your income will be taxed.
Asking about these terms is an ordinary part of taking locum work, and specific questions about cancellation, coverage and restrictions get more useful answers than a general request to explain the contract. Our contracts guide has more on how locum agreements are structured.
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