Jefferson Health is postponing pay raises for Philadelphia-area employees
The move comes as Jefferson refinanced $1 billion in debt following its acquisition of Lehigh Valley Health Network.
Jefferson Health is postponing annual pay raises for more than 42,000 employees in the Philadelphia region from January to July, the Center City-based nonprofit said Friday.
The delay is designed to align “salary increases with our fiscal year to help us synchronize our financial planning, budgeting, and benefits processes,” Jefferson said in an emailed statement.
Jefferson has 32 hospitals and $14 billion in annual revenue, making it the biggest nonprofit health system based in the Philadelphia region.
More than 23,000 employees at Lehigh Valley Health Network, which Jefferson acquired in August, are not affected by the change.
A 3% pay increase scheduled for July 1 will not be retroactive to the beginning of the year, according to guidance provided to managers. They were told of the change before a message from Lisa Satterson, Jefferson’s head of human resources, went out to all employees.
“We understand that this news may come as a surprise and want to acknowledge that the decision was not made lightly,” Satterson’s email said. “Our goal is to ensure the long-term stability and health of the organization while continuing to support our Jefferson colleagues.”
It’s not clear how much money the delay will save Jefferson, which effectively broke even in the fiscal year ended June 30. It will boost financial results for the current fiscal year, which ends June 30.
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The announcement of timing shift for annual raises came as Jefferson completed a $1 billion bond refinancing this month. A big chunk of those proceeds was used to refinance Lehigh Valley debt.
Jefferson’s bond offering statement also said it is planning to expand the emergency department at its flagship Thomas Jefferson University Hospital as part of $530 million in capital projects.
A frequently-asked-questions document provided to managers said such capital projects are paid for through “different financial channels” than salary increases “and are essential for our growth, competitiveness, and sustainability.”