Understanding Your Resident Doctor Employment Agreement

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While physicians work in all sorts of different facilities and specialties, there’s one thing that all physician jobs have in common: they always require contracts.

Unlike other professionals in other industries, physicians work under strict guidelines, and contracts are in place to protect doctors as well as the hospitals or healthcare groups they work for.

As a resident, you’ll get your first taste of what a physician’s employment contract looks like when it’s time to sign your resident doctor’s employment agreement.

Resident employment agreements are extremely important, and you need to understand what they entail and why they include the information they do. Here’s what you need to know to understand your resident doctor employment agreement.


Residents Are Doctors

Though the pay won’t be nearly as much as licensed physicians, residents are doctors (albeit doctors in training).

As you already know, you must graduate from medical college and earn a D.O. or M.D. degree before you can become a resident. Only when your residency is completed will you be eligible for licensure and be able to practice medicine as a trained supervising physician.

As a junior resident, you’ll learn quite a bit about what it means to be a physician. Before your residency program even begins, you’ll have to sign a contract. This is something that all physicians do, whether they work in hospitals, private patient care practices, primary care, or other medical facilities.

Hospitals and healthcare groups almost always require that an attending physician sign a contract. While it may seem that these contracts exist solely to protect the employer, they also protect the physician.

Contracts include all sorts of valuable information, including the relevant details of your salary, bonuses, and responsibilities.

As a first-year resident, you’ll be presented with a resident physician employment agreement. This is a modified version of the standard physician contract.

And, since you’ve just undergone several years of medical school, there’s a good chance that this will be the first contract you’ll ever have to sign. But it certainly won’t be the last.

Related: 10 Options for Medical School Loan Repayment

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How to Become a Resident

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For those of you that haven’t finished medical school yet, let’s back up a bit and discuss the steps you need to take in order to become a medical resident.

It’s all about the match process.

At the start of your fourth year of medical school, you’ll need to apply to the teaching hospitals that you want to do your residency in. These may be in your hometown, a few states away, or across the country.

You’ll need to do your research to find the hospitals that offer the residency program needed for your specialty (internal medicine, emergency medicine, family medicine, gynecology, cardiothoracic surgery, general surgery, etc.).

Apply For Residency

To apply, you’ll need to submit a completed application to ERAS (the Electronic Residency Application Service). You should start working on this in the summer prior to your last year of school. You’ll also need to submit your medical college transcript as well as your board certification — USMLE or COMLEX — scores. Individual hospitals may require a CV, letters of recommendation, and other documents.

The hospitals that are interested in your candidacy will grant you interviews that usually take place between October and February of your fourth year of medical school.

These are interviews only, and there is no guarantee that you will be accepted into the full-time residency program you want. Yet there is a strategy you can use to better your chances.

It is highly recommended that you interview with your fourth, fifth, and sixth choice hospitals first.

Why? Because you can use those interviews as practice.

When scheduling your interviews, try to schedule your first, second, and third choice hospitals later in the process. That way, you’ll have some interview experience under your belt.

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Prepare for Match Day

Once interviews are complete, and you’re a medical school graduate, you’ll need to wait patiently for Match Day to arrive in March.

For most medical students, the time period between interviews and Match Day can be extremely stressful. On Match Day, you’ll be informed which hospital you interviewed with wants to take you on for your first year of residency. It could be your top choice, fifth choice, or you may not match with a hospital at all.

When you learn your match hospital, it’s essential to accept and agree to become a resident doctor in that program as quickly as possible. If you turn down your match offer, you may have to wait an entire year to apply again (and there’s still no guarantee you’ll get placed in the hospital you want).

There are alternative methods by which you can still find a residency program for the upcoming fall for medical students that don’t match with a hospital.

SOAP (the Supplemental Offer and Acceptance Program), which is sometimes referred to as “the scramble,” allows unmatched students to search for all available positions remaining in ERAS after match day.

Like medical students who made a regular match, those who find a program through SOAP have a limited amount of time to accept the offer, otherwise, they’ll need to wait until the following year.

Once you do accept your offer, you’ll be presented with a contract called a resident physician employment agreement.

You’ll need to sign that contract prior to starting your first year of residency. Once you sign, you’ll be expected to show up ready to work and learn on day one.


What is a Resident Doctor Employment Agreement?

The resident doctor employment agreement is standard. All residents should expect to sign one, regardless of their medical specialty or the hospital they plan to train with.

As the first of many contracts you will sign in your career, it’s essential to take the time to understand what they’re all about.

They’ll be several pages long, they’ll include a variety of terms, provisions, and clauses, and they’ll cover all sorts of useful information about your relationship with the hospital.

You may also like Physician Work-Life Balance: A How-To Guide for New Doctors.


The Most Important Parts of a Resident Doctor Employment Agreement

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There are a variety of standard terms that all employment agreements include.

Here are the most important parts to look out for:

Terms of Your Employment

Your contract should clearly spell out the terms of your employment. This includes the start and end dates of your residency and the location of your work.

This portion of your contract should also include information regarding your shifts and the hours/days/schedule you will work.

Compensation

Employment agreements will also include the details of your salary. Most first-year residents earn an average salary of $60,000 per year. That bumps up to about $77,000 when you make chief resident.

Depending on the hospital, you may be offered a “resident stipend” in your third year of residency. This is a way to encourage junior resident doctors to stay with the hospital they’re training with once they’re certified and licensed to practice independently.

You will not see a medical resident stipend in your first two years of residency. If you are presented with one down the line, you’ll need to weigh the pros and cons. It can be tempting to want to pocket that extra salary, but it will lock you into working in your teaching hospital, even after your residency is complete.

Your employment agreement will also include information about PTO, sick days, and vacation days, as well as any health insurance or other benefits you will receive.

Responsibilities/Obligations

Like all physicians, residents are bound by strict rules and regulations. Resident employment agreements should include all of the details of those rules, and any specific standards you must abide by.

All of the rules and regulations you must comply with should be spelled out in-depth, as should any necessary credentialing requirements.

The credentialing process is how hospitals verify that you are eligible to work as a resident. This includes providing proof of your medical school diploma, providing evidence that you are legally allowed to work in the U.S., and proving that you have the immunizations required to work at the hospital.

Some hospitals also perform background checks, health screenings, and drug screenings as part of the credentialing process.

If you’re not a U.S. citizen, you will also need your ECFMG certification and a valid visa that shows you are legally allowed to work in the U.S.

Related: Hospital Credentialing and Privileging: What to Expect as a Physician

Insurance

Residents are not expected to carry their own medical malpractice insurance. The hospital you work for will cover that.

If there are any other types of insurance required, your contract will detail whether the resident or the hospital will pay for additional insurance coverage.

Termination Clause

The termination clause is one of the most critical terms in any contract. This will explain the rights and obligations of both the hospital and the medical resident, should the hospital want to fire you or should you wish to leave before the contract ends.

Learn more: Physician Contracts — Termination and Separation Agreements

“Other Provisions”

It is common for contracts to list a variety of “other provisions” you must abide by as a resident. These include things such as how you handle medical records, which laws you must comply with, and the state’s governing legislation.

You can also expect your employment agreement to include terms such as severability, supervening law, assignment, and agency. These are legal terms that most residents aren’t familiar with, making it incredibly important to have a contract review specialist look over your contract before you sign it.

Related: Can You Negotiate Physician Contracts?


Red Flags to Look Out For in Your Employment Contract

Knowing what should be in your employment contract is just as important as knowing what should not be included.

Here are some red flags to look for before signing your agreement:

The Inclusion of Non-Competes and Restrictive Covenants

It is common for physician contracts to include a variety of non-compete clauses and restrictive covenants. These prohibit new doctors from soliciting patients when they move to a new practice or employer. These covenants include things like mileage restrictions. For example, you may not be allowed to work within a 20 mile radius of the hospital for two years.

Resident contracts do not typically include restrictive covenants. You will, however, likely see a confidentiality clause in your employment agreement. This is standard.

Most medical resident confidentiality agreements stipulate that you must keep all information related to the hospital and its patients confidential. As a resident, you must abide by state and federal privacy laws and HIPPA laws at all times.

If your employment agreement includes any other restrictive covenants, that’s a huge red flag.

Missing Information

Your employment agreement must include information regarding hours, scheduling, compensation, benefits, and termination.

If any of these elements are missing from your contract, there could be serious consequences once you start working. This is why it is so crucial for residents to hire a contract review specialist before they sign their agreement.


Hire a Contract Review Specialist

Contract review specialists know precisely what to look for in resident agreements and physician contracts. They understand the complexities of contracts. They know the legal jargon. They also know what should and shouldn’t be included in your agreement.

Hiring a contract review specialist offers residents a level of protection. As a new doctor, it’s important to start your medical residency on the right foot. A contract lacking the relevant details or that puts too many restrictions on you is not how to do it.

For physicians, contract review specialists are vital, as they can help you to negotiate higher salaries, bigger bonuses, and better benefits packages. For residents, this isn’t as relevant, as most residents make a standard wage without any wiggle room.

Resident employment agreements are essentially take it or leave it contracts. There is no room for negotiation. However, a contract review specialist can still be beneficial in ensuring that the agreement you’re presented with meets the standard for other residents in your state.


Your resident employment agreement is the first of many contracts you can expect to sign in your career as a physician. All residents must sign one, and all hospitals are expected to provide one.

Yes, they protect the hospital, but they also protect the resident. It is the best way to ensure that all parties involved know exactly what is expected of them before the residency training program begins.

For an added measure of protection, hire a contract review specialist to look over your agreement before you sign. Contact Physicians Thrive now to hire a contract review specialist for your resident agreement or physician contract.

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