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Background: Worldwide, there is an increased reliance on casual staff in the health sector. Recent policy attention in South Africa has focused on the interrelated challenges of agency nursing and moonlighting in the health sector. Objective: This paper examines the potential health system consequences of agency nursing and moonlighting among South African nurses. Methods: During 2010, a cluster random sample of 80 hospitals was selected in four South African provinces. On the survey day, all nurses providing clinical care completed a self-administered questionnaire after giving informed consent. The questionnaire obtained information on socio-demographics, involvement in agency nursing and moonlighting, and self-reported indicators of potential health system consequences of agency nursing and moonlighting. A weighted analysis was done using STATA® 13. Results: In the survey, 40.7% of nurses reported moonlighting or working for an agency in the preceding year. Of all participants, 51.5% reported feeling too tired to work, 11.5% paid less attention to nursing work on duty, and 10.9% took sick leave when not actually sick in the preceding year. Among the moonlighters, 11.9% had taken vacation leave to do agency work or moonlighting, and 9.8% reported conflicting schedules between their primary and secondary jobs. In the bivariate analysis, moonlighting nurses were significantly more likely than non-moonlighters to take sick leave when not sick (p=0.011) and to pay less attention to nursing work on duty (p=0.035). However, in a multiple logistic regression analysis, the differences between moonlighters and non-moonlighters did not remain statistically significant after adjusting for other sociodemographic variables. Conclusion: Although moonlighting did not emerge as a statistically significant predictor, the reported health system consequences are serious. A combination of strong nursing leadership, effective management, and consultation with and buy-in from front-line nurses is needed to counteract the potential negative health system consequences of agency nursing and moonlighting. [ABSTRACT FROM AUTHOR]