Understanding Your Resident Contract - The Financial Terms That Matter

Your resident contract is a legal document with real financial consequences. Here is what to look for before you sign.

Compensation and Pay Schedule

The base salary in your resident contract is set by your program and is rarely negotiable, but confirm the exact amount and pay frequency. Most programs pay biweekly or semimonthly - that distinction affects your cash flow planning. Also confirm whether the salary listed is the gross amount before taxes and deductions, and ask HR for a sample pay stub or net pay estimate so you are not caught off guard by your first paycheck.

Look for any stipends or additional compensation beyond base salary. Some programs offer housing stipends, parking allowances, meal credits, or call pay that supplement the base. These are not always prominently featured in the contract itself and may be described in a separate benefits summary. Ask your program coordinator for a complete list of all compensation components before assuming the headline salary is the full picture.

Benefits - What Is Covered and What Is Not

Health insurance coverage varies significantly between programs. Confirm whether the premium is fully covered by the hospital or whether you contribute, and whether coverage extends to dependents and at what cost. A program that covers your premium entirely but charges $600 per month to add a spouse is meaningfully different from one that covers the whole family at no cost - and that difference does not always appear in the contract itself.

Malpractice insurance is standard in resident contracts but confirm the type. Occurrence-based coverage protects you for claims arising from incidents during your training regardless of when the claim is filed. Claims-made coverage only covers claims filed while the policy is active - if you leave the program and a claim is filed later, you may need a tail policy. Most academic programs provide occurrence-based coverage, but verify this explicitly rather than assuming.

Confirm whether your malpractice coverage includes tail coverage after graduation. If the program provides claims-made coverage, ask who is responsible for purchasing the tail policy when you complete residency. Tail coverage can cost tens of thousands of dollars and that obligation should be clearly defined in your contract.

Moonlighting Policies and Outside Income

If you plan to moonlight during residency, your contract likely contains language governing outside employment. Some programs prohibit moonlighting entirely in the first year. Others require written approval for any outside clinical work. Some restrict moonlighting to program-affiliated facilities. Violating these provisions can have consequences ranging from a formal warning to dismissal, so understand exactly what is permitted before taking any outside shifts.

If moonlighting is permitted, confirm whether your program malpractice coverage extends to outside work. In most cases it does not - moonlighting shifts at outside facilities require separate coverage arranged by that facility or purchased individually. Do not assume you are covered for outside clinical work under your residency malpractice policy without confirming it in writing.

Termination and Non-Compete Provisions

Review the termination section carefully. Understand the grounds on which the program can terminate your contract and what notice period applies in each scenario. Also look for any non-compete or non-solicitation clauses. These are more common in private practice employment contracts than in residency agreements, but some programs - particularly those affiliated with private hospital systems - include geographic or specialty restrictions that could affect where you practice after training.

If anything in the contract is unclear, ask for clarification in writing before signing. You are not required to sign on the day it is presented. A few days to review the document - and to run it by a healthcare attorney if the terms seem unusual - is a reasonable request. The contract governs your professional and financial life for the next several years and deserves more than a quick scan between shifts.