How to Reduce Nurse Overtime Hours in Healthcare

What if there were a way to reduce overtime while maintaining staffing efficiency and providing quality care?

Facilities nationwide rely on a reduced number of nurses to fill schedule gaps due to several factors, including the nursing shortage. However, overtime can result in a heavy burden on healthcare workers and facilities’ budgets and can even impact patient care.

A 2025 study published by the American Hospital Association found that nearly 56 percent of a hospital’s expenses represent labor costs. Overtime is likely an important factor that contributes to this elevated cost.

Medical centers need different nurse scheduling strategies to overcome challenges associated with the staffing shortage and last-minute call outs.

What is overtime?

Overtime is compensation for additional working hours beyond an employee’s regular schedule. Employers must pay time and one-half of an employee’s regular pay rate for each extra hour.

According to the Fair Labor Standards Act (FLSA), there are two types of employees: non-exempt and exempt.

The FLSA requires payment to non-exempt employees of a minimum of $7.25 per hour and time and a half for work over the 40 hours in a workweek.

Workers who meet the following criteria are considered exempt employees and do not receive overtime pay:

Fixed salary: Payment is a predetermined rate based on a regularly issued annual salary, regardless of actual hours worked, workload, and results.
Compensation level: The salary must meet the minimum weekly payment established by the Department of Labor (DOL).
Tasks: The employee's duties are consistent with work in the administrative, professional, computer, or external sales fields.

Registered nurses (RNs) who do not receive overtime pay typically fall under the “learned professional exemption.” RNs in this category generally have the following characteristics:

Are paid a fixed salary
Earn the minimum per week established by the DOL
Have advanced knowledge in a field of science or learning

However, RNs who are hourly employees are eligible for overtime pay.

Policies may vary since many states have laws that restrict nurse overtime.

According to the FLSA, hospitals and residential care establishments can use one of the following overtime systems per employee:

The standard 40 hours: This system calculates hours worked over the 40 hours of the regular workweek.
The eight and eighty: This system guides employers to pay overtime for any hours worked beyond eight in a day or 80 in a 14-day period.

Healthcare facilities enforce mandatory overtime for several reasons, such as staffing shortages, poor workload management, and surges in demand for healthcare services. However, relying on the same staff members to work extra hours can negatively affect patient care and operational costs.

Effects of overtime on patient care, staff, and facilities

Relying on a mandatory overtime policy may have benefits, such as adequate 24/7 coverage regardless of patient census fluctuations. It can also interest nurses who want an opportunity to make extra money.

However, mandatory overtime for nurses can have several negative impacts on healthcare facilities that aren’t always immediately visible.

High cost for facilities

This consequence is well known. In 2023, Nursa commissioned a survey of 203 healthcare executives, the majority of whom reported that nursing costs were a “significant pressure on their bottom line.”

RN overtime pay directly affects a facility’s budget, since it is significantly higher than the regular hourly rate. Even incidental overtime can add up.

Nurse burnout and job dissatisfaction

Nurse burnout and low job satisfaction are common consequences of feeling overworked.

A burned-out nursing staff member may not have the same commitment and motivation they had when they started working at the facility.

This situation can ultimately result in increased turnover rates and diminished quality of care.

High turnover rates and lower productivity

Nurses working more than 40 hours per week may experience burnout. As a result, they don’t perform to their full potential, and the absenteeism rate may rise due to exhaustion. These nurses are more likely to quit their jobs.

According to a 2022 study, Patterns and Correlates of Nurse Departures from the Health Care Workforce: Results from a Statewide Survey, which analyzed survey data from over 13,000 Michigan nurses:

“Frequent use of mandatory overtime was associated with a higher likelihood of departure from practice in the past two years.”

Nurse turnover results in facilities spending more time recruiting and training new staff. Turnover implies high costs, which strain facilities’ budgets.

Related: Work expectations in healthcare: Hospitals improve retention

Missed nursing care and negative patient outcomes

When the same nurse works shifts without getting adequate rest, their performance can decline and negatively affect patient outcomes.

Overtime has been associated with increased mortality rates, hospital-acquired infections, patient falls, and other adverse events.

Longer patient stays

Nursing overtime can lead to fatigue, which increases the likelihood of errors. Errors may result in longer recovery periods and patient stays.

Resources spent on scheduling

Pressure to avoid overtime may require managers to spend long hours looking for ways to fill the gaps in their schedules, time they could use on other equally important tasks.

Navigating nurse overtime: 8 Strategies for cost reduction

Avoiding overtime expenses may seem impossible in the current climate of a nursing shortage. However, it is possible.

Use the following strategies to bring your facility’s reliance on overtime down to a minimum.

1. Monitor your current overtime hours

Monitoring overtime hours can help facilities identify where, when, who, and why. Understanding your facility’s use of overtime will help you understand where to focus on improvement for staffing efficiency.

Lean into your management software to track the overtime worked.

2. Re-evaluate overtime policies

Mandatory overtime policies can have severe effects on nursing job satisfaction and turnover. Removing these policies in tandem with adopting other best practices can lower costs, increase nurse job satisfaction, and maintain quality patient care.

3. Track the patient census and staffing needs

Tracking changes in demand for healthcare services, such as seasonal trends, alongside metrics like hours per patient day, can help facilities improve staffing predictions and ensure the availability of the workforce needed.

4. Cross-train staff

Training nurses to perform in different roles can help facilities address surges in demand for specialized staff instead of overworking the few available or hiring more nurses.

5. Source contingent workers in addition to full-time staff

By relying on per diem staffing in addition to full-time internal nurse staff, facilities can reduce overtime pay, increase the job satisfaction of internal staff, and maintain quality care.

For example, PRN staffing platforms can help facilities have the staff they need to cover fluctuations in demand, without expensive contracts or longer-term commitments.

6. Leverage flexible scheduling

When a facility has a reasonable projection of the fluctuations in demand for clinician coverage, it may align shift schedules with staff preferences, ensuring nurses are happy and performing at top capacity.

PRN shifts can help facilities fill gaps in the nursing schedule. They can be offered to internal part-time staff and contract PRN clinicians and could completely replace overtime.

7. Try remote and telehealthcare solutions

Telehealth allows nurses to have more flexible schedules and a better work-life balance. For facilities, this means a rise in job satisfaction and improved efficiency in patient care.

Remote nursing support can be an asset for facilities where direct contact with patients is unnecessary.

8. Incentivize underutilized nurses to cover scheduling gaps

Part-time employees may not be able to commit to a full-time schedule, but they may be interested in picking up occasional extra shifts.

Providing these workers with flexible work options can motivate them to increase their hours without incurring overtime costs for facilities.

How Brookfield Health reduced staffing costs

Brookfield Health had problems maintaining staffing standards, so it turned to Nursa, which helped the facility fill its shifts, reduce costs, and prevent staff burnout.

“Agency staffing doesn’t provide an easy-to-access platform where I can easily request and schedule shifts, which is why we turned to Nursa.” — Josh Clark, CEO of Brookfield Health

Using PRN clinicians is a great option to reduce staffing costs, maintain quality care, and increase job satisfaction.

Reduce overtime to improve patient care

Relying on overtime may help to maintain staffing levels and cover all shifts. However, it can become a liability, negatively impacting a facility’s budget, nursing staff wellbeing, and patient care.

A simple solution to reduce overtime, cover shifts, and reduce staff fatigue is to use Nursa. This PRN staffing platform allows facilities to fill shifts without high overtime costs and provide quality care efficiently.

Learn how Nursa helps healthcare facilities meet their contingent labor needs and reduce overtime costs.

Sources:

How facilities can cut down on nurse overtime costs

What is overtime?