HHS Withholds Bonuses from Laid-off Employees, Restructuring Continues

# HHS Health Watch: May 12, 2025

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Welcome to HHS Health Watch, your weekly update on America's health landscape. I'm your host, bringing you the latest from the Department of Health and Human Services. Today's headline: HHS has decided to withhold bonus payments from recently laid-off employees.

In a controversial move last week, HHS announced it will block performance bonuses for many employees who were laid off earlier this year. These bonuses, typically paid in April, will now be distributed after June 2nd—after most separated employees' official termination date. According to internal communications, despite appeals from agency officials, the decision affects all divisions relying on the department's central human resources office under Secretary Robert F. Kennedy Jr.

One federal health employee described the decision as "f****d up," noting these bonuses were earned through hard work throughout last year, before layoffs were announced.

This comes as HHS is moving forward with a second wave of terminations for probationary employees. Letters began going out Thursday, following earlier termination attempts that were paused amid court challenges. "This is the final step of the process where they receive their final notice," an HHS spokesperson confirmed.

Meanwhile, HHS continues its dramatic restructuring announced in March under the "Make America Healthy Again" initiative. The transformation includes significant policy changes, like the February 28th decision to limit public comment periods for certain regulations. The department has rescinded a 50-year-old policy that required public input on rules related to grants, benefits, and contracts.

On the public health front, HHS released a controversial report on pediatric gender dysphoria on May 1st. The report has drawn criticism from researchers and medical associations for its methods and conclusions, particularly its support of "exploratory therapy" approaches.

For Americans navigating these changes, the impacts vary widely. Healthcare providers and organizations should prepare for faster regulatory changes with potentially less opportunity for input. Employees at federal health agencies face continued uncertainty amid organizational restructuring.

Looking ahead, watch for the June 2nd separation date for laid-off employees and potential legal challenges to recent policy changes. For more information, visit hhs.gov.

This is HHS Health Watch for May 12, 2025. Until next week, stay informed and stay healthy.

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