This bill establishes a framework for limiting executive compensation at hospitals located in economically distressed communities when significant workforce reductions occur. Specifically, any hospital that conducts a workforce reduction affecting more than 10 employees in a single department within a six-month period will face an 18-month freeze on C-suite executive compensation, which includes salary, bonuses, and other forms of remuneration. The freeze is intended to ensure accountability and responsible stewardship of public and charitable resources, particularly in light of the critical role these hospitals play in their communities. The bill mandates that hospitals report workforce reductions and C-suite compensation details to the charitable trust unit of the Department of Justice within ten days of initiating a reduction.

The enforcement of this compensation freeze is under the jurisdiction of the charitable trust unit, which is empowered to investigate potential violations and impose penalties, including civil fines and restitution for improperly awarded compensation. The bill also prohibits hospitals from offsetting the effects of the compensation freeze by further reducing frontline staffing or patient-care expenditures. Additionally, the director of charitable trusts is tasked with adopting rules to implement the provisions of this chapter, including reporting standards and enforcement procedures. The act will take effect 60 days after its passage.