Nurse staffing agencies ask feds to designate temporary staff as employees

With persistent staffing shortages in post-acute care facilities, a coalition of nurse staffing agencies is asking the government to classify temporary workers as employees under federal law.

A coalition of 30 nurse staffing agencies asked the Department of Labor to determine that nurses working in temporary roles should be classified as employees and not as independent contractors. Agencies such as IntelyCare, Gale Healthcare Solutions, ShiftMed, connectRN and others made the case in a joint letter to the Labor Department in August.

The coalition emerged as some staffing agencies have been hiring nurses as independent contractors to fill temporary positions, gaining a financial edge.

Rebecca Love, chief clinical officer for IntelyCare, tells Chief Heatlhcare Executive® that the issue isn’t widely understood.

“I think that there's a very poor understanding in the nursing workforce, in general, around worker classification,” Love says.

The coalition is asking the department to designate temporary nursing staff in post-acute facilities as employees under the Fair Labor Standards Act. Love contends nurses that are classified as employees under federal law are more likely to provide quality care, and they have greater protections and access to better benefits.

“The temporary nursing industry has emerged as one of the leading solutions to address the nurse staffing shortage in post-acute care facilities,” the letter states. “However, for temporary nursing staff arrangements to properly serve patients and nursing professionals, it is important to ensure that temporary nursing staff are correctly classified as employees.”

Staffing agencies argue that those organizations who are classifying their workers as employees are making a greater commitment to providing quality care. They say that agencies utilizing contractors for temporary nurses gain an unfair advantage, since they aren’t paying taxes on those workers.

Long-term care facilities such as nursing homes are increasingly reliant on temporary staffing agencies to fill nursing positions. Due to the pandemic, the nursing home industry has lost 221,000 full-time caregivers, the agencies say.

“If there were not staffing agencies, these facilities would not be able to provide care for their patients,” Love says.

The staffing agencies in the coalition say they came together as they saw other agencies increasingly turning to independent contractors.

“We started to realize that there were players out here who were basically facilitating and profiting off of this system that carried none of the responsibility to provide a quality workforce and sharing the risk of what that meant to deploy this workforce,” Love says.

Temporary staffing agencies have rankled some healthcare organizations because they are more costly, and some health systems say rates for contract labor have soared.

While Love says staffing agencies are more expensive, she says she’s worried about what she says is the growing impression that temp agencies also provide a lower quality of care. She says that has been “accelerated” by agencies that are designating their staff as independent contractors.

“They're not held to the same level of responsibility to maintain quality and to maintain responsibility in the incidences where risk and harm occurred to the patients,” Love says.

Staffing agencies in the coalition are seeking the government to determine that temporary nursing staff working in post-acute care should be treated as employees. Without such affirmation, some agencies could end up switching to having their nurses work as independent contractors to compete, Love says.

“If there is not clarification, the likelihood is that those who are operating as staffing agencies as having the nurses and CNAs (certified nurse assistants) as employees, they are no longer going to continue to practice to that gold standard,” Love says.

Nurses who are designated as employees have greater protections, including paid time off, health insurance, and access to workers’ compensation if they are injured on the job, which is an all-too-common risk for nurses and other healthcare workers, Love says.

Nurses who work as employees are also covered under malpractice insurance protecting them from liability if there’s an incident that harms a patient, whereas independent contractors are responsible for care management and any potential injuries or malpractice.

While companies routinely employ independent contractors, including those in tech jobs, Love says nurses in post-acute facilities should be employees with training and protections from liability. Temporary nurses in a nursing home face much greater risks of lawsuit than a typical independent contractor, she says.

“They are dealing with patients' lives,” Love says. “The outcomes we know in health care are highly litigious, with regards to harm to patients.”

The coalition also contends that post-acute facilities employing independent contractors in nursing roles could face higher risks of audits over unpaid overtime and workers’ compensation liability.

Staffing agencies in the coalition say treating their workers as employees, rather than contractors, is best for workers and the care of patients, Love says.

“Because otherwise there are no protections for that workforce,” Love says. “And that I think comes down to the heart of the issue.”

President Biden’s administration has proposed minimum staffing standards for nursing homes to improve patient safety. Nursing homes have pushed back against the mandate, calling it an unrealistic solution given their difficulties in filling positions. Nursing homes have also pressed the federal government for more financial support, saying long-term care facilities have been chronically underfunded.