Legal Considerations When Addressing Health Care Staffing Shortages

By Yelena Greenberg and Sapna K. Jain May 23, 2023

​Since the COVID-19 pandemic began, we've seen significant numbers of health care workers leave the industry. These departures have left hospitals and health care systems asking how they can continue to serve patient populations while maintaining compliance with state and federal health care regulations and remaining financially solvent.

In trying to address these issues, hospitals and health care systems have become creative and more flexible in their employment practices to avoid halting patient care services or shuttering their doors. We explore different strategies hospitals and health care systems have tried while analyzing the health care and employment law implications.

Travel Nurse Staffing Agencies

An often-talked-about solution to nursing shortages is to hire temporary "travel" nurses. These travel nurses are typically employed by temporary nurse staffing agencies that coordinate placement and negotiate contracts with hospitals and health care systems. Given the shortage of nurses, these staffing agencies have been able to leverage their position by negotiating favorable key contractual provisions including lucrative travel nurse compensation rates, sign-on bonuses, and fees for hiring travel nurses during or after their placements.

Although widely utilized by a significant number of hospitals, broad reliance on staffing agencies is more of a Band-Aid than a permanent solution. Smaller hospital systems, including many rural hospitals, have struggled to meet the rising cost of nursing labor, among other issues. Many have been forced to close, leaving patients to travel farther for medical care. Due to the temporary nature of the role, once the travel nurses leave, the hospital must continue its search for replacements. Further compounding the nursing shortage, full-time employed nurses typically receive less compensation than travel nurses, and many have sought to capitalize on this discrepancy by seeking out lucrative travel nurse opportunities. This leaves hospitals with more pronounced shortages and exacerbates the turnover in the health care workforce. Without steady leadership and support, hospital-employed nurses have become demoralized and dissatisfied as they continue to be overworked and their employers short-staffed.

Internal Staffing Model

To avoid reliance on travel nurse staffing agencies, some hospitals have sought to create these models internally to compete with external nurse staffing agencies. As expected, creating an internal staffing model to recruit and hire temporary staffing directly not only requires additional financial capital, but it also requires resources to manage what is essentially an expanded or additional human resource department. While this idea may help hospitals avoid the initial costs of travel nurses, hospitals may still find themselves competing for the same talent as those hired by the external nurse staffing agencies.

Hospitals utilizing the internal staffing agency model will also have to consider how this approach affects their current nursing population, including those who are union members. Specifically, hospitals may question how these internal temporary nurses should be categorized for employment purposes, what benefits might they receive, whether they are otherwise employed within the broader organization (and, if so, the legal impact of that dual relationship), and would these individuals be part of a collective bargaining agreement if they are doing work similar to the hospital's employed staff?

Hospitals may consider the following options, subject to any applicable collective bargaining agreement:

  • Establish an internal staffing agency through an affiliate to avoid the logistics of management and issues comparing temporary and permanent nurses.
  • Impose strict parameters on the temporary nature of the roles, such as a maximum term.
  • Offer no benefits plans or plans that meet the minimum criteria under the Affordable Care Act.

Targeted Hiring and Alternative Industry Recruitment

As hiring has become more competitive, human resource and talent management teams continue to implement new ideas to attract the best talent. One of these approaches includes targeted hiring, which requires a thoughtful recruitment strategy that uses data to track the progress relative to specific goals. Some examples include partnering with nursing school programs to create a candidate pipeline for new nurses and establishing clinical practicum programs for interested students to train with current staff so the students can develop mentors early on in their academic journey, as well as hopefully attracting those students as employees upon graduation.

Another approach is that health care systems are hiring and training individuals from nonmedical backgrounds to fill administrative tasks that do not require a nursing license, including assisting with paperwork or checking patient vitals. However, this approach can upset current employees and nursing unions. With the introduction of new employees, some nurses and unions may feel that their current negotiating power is being undercut and that they stand to lose the ability to demand better benefits and job security.

International nurses can also be an alternative source of talent, although available visas for foreign nurses can be quickly exhausted.

Retaining Talent

Even as hospitals look to hire more nurses, retention of existing talent is key. Hospitals have sought to do this by offering nurses more flexible schedules, whether this means working for multiple hospitals or clinical settings or allowing staff to choose in which departments they'd prefer to work. By providing more options, hospitals may be able to reduce employee burnout while increasing job satisfaction. These opportunities also allow employees to pursue their intellectual curiosity by working in different departments and with different teams. Even with these approaches, employers must be mindful of wage and hour laws, such as the Fair Labor Standards Act, which require employers to ensure employees are paid for all hours worked, including overtime, depending on the employee's classification across work locations.


The pandemic's toll on hospitals and health care systems can still be seen through the challenges associated with workforce staffing in health care. Hospitals and health care systems have been forced to adapt and innovate. However, these approaches must be implemented in legal compliance with all health care and employment rules and regulations. Ultimately, individual hospitals must assess their financial condition as well as the competing risks of inadequate staffing and the high cost of staffing to determine which approach is best.

Yelena Greenberg advises on a broad range of health law issues and is an associate in Robinson and Cole's Health Law group. Sapna K. Jain is an associate in the Labor and Employment group. They are based in the firm's Boston office. 



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