June 4, 2021

$10,000 ‘Hero Pay’ Bonus For Frontline Workers Fails in CA

california hero pay bonus

Assembly Bill 650, also known as the Healthcare Workers Recognition and Retention Act, failed in the California Assembly on Thursday. The Bill would have mandated healthcare facilities to pay all healthcare professionals a $10,000 bonus, to be paid in quarterly payments, on top of their salary in 2022. Under the Bill, it would have been illegal for healthcare employers to lay off or fire frontline workers to avoid paying. 

Ultimately, the bill was expected to cost around $7 billion. 

Hospitals struggle to retain employees

The goal of the bill was to provide some incentive for healthcare workers to stay at their jobs. Over a year into the pandemic, frontline workers are physically, emotionally, and mentally exhausted. This is causing highly trained and skilled workers to leave their jobs. With burnout at an all-time high, lawmakers are hoping that a bonus will help retain workers in the healthcare industry.

The “hero pay” would have been awarded to qualifying frontline workers in four installments of $2,500. Part-time workers could have also been eligible for smaller bonuses. In addition, any employee who has already received a pandemic-related bonus may have that amount subtracted from their “hero pay.”

Supporters of the Bill

The bill was introduced by Assemblyman Al Muratsuchi and has the support of the Services Employees International Union California.  Muratsuchi argues that frontline workers have sacrificed more than others during the pandemic and should be compensated for both their contributions and the risks they have endured. 

While most of the funding for the bill would come directly from hospitals, around $924 million will be taken from Medi-Cal, the state’s healthcare program. There is also the possibility that federal funding will be used to help cover the cost of the bill. Employers may be able to receive an exemption if they are unable to pay the bonuses.

Supporters also argue that while $7 billion sounds like a steep price tag, it is really just a fraction of what has been spent on fighting COVID-19.

Opponents of the Bill

Many hospitals and the state’s main lobbying group for doctors, The California Medical Association, oppose the bill. They argue that the bill could actually kill jobs and put a further financial strain on hospitals. Many facilities have had to make significant changes to their daily operations, which has increased expenditures. In fact, about 50% of the state’s hospitals are operating at a loss and working to recover from the pandemic. Hospitals are afraid that they will have to cut services just in order to pay for the bonuses.

While there is little argument over the invaluable role that frontline healthcare workers have played in combating COVID-19, not everyone can agree on whether this bill will help or hurt hospitals and employment figures. Potentially, the hero pay could entice more workers to stay put, but it could also place an additional burden on healthcare facilities that are already struggling. The bill is still under debate and faces a vote this week.

Go to the top of page