Steward Health Care Employees’ Paychecks Delayed One Week After the Company Files for Bankruptcy

By: Beth Moreton | Published: May 14, 2024

Most employees look forward to that time of the month when they finally receive their paychecks in their bank accounts and can pay their bills and spend it on any extras they would like or put some aside in savings.

However, this hasn’t happened for Steward Health Care employees, as just a few days after the company filed for bankruptcy, its employees’ paychecks have been delayed, in what the company is calling a “bank processing error.”

Steward Health Care Has Filed for Chapter 11 Bankruptcy

Throughout 2023 and 2024, a growing number of companies have filed for Chapter 11 bankruptcy, with healthcare companies starting to become one of the types of companies to add to that list.

Petition to file for bankruptcy papers.

Source: Melinda Gimpel/Unsplash

While some companies can come out of a Chapter 11 filing as financially secure, Steward Health Care’s filing is a little more complex. The filing indicated it has more than 100,000 creditors, and a judge in Texas has granted the company a complex case designation.

Steward Health Care Is $9 Million in Debt

Steward Health Care has managed to amass quite a large debt. It is currently $9 million in the red and is struggling to find ways to pay back this money owed.

A person in a white t-shirt holding open an empty brown leather wallet.

Source: Towfiqu Barbhuiya/Unsplash

The company has come up with some plans to carry out so it can pay back some, or hopefully all, of the money owed. However, due to being millions of dollars in debt, this has left some employees worried that they haven’t received their paychecks due to the debt.

Steward Health Care Needs a $300 Million Loan

After filing for bankruptcy in early May 2024, Steward Health Care has revealed that it is seeking a $300 million loan from Medical Properties Trust to help keep it afloat.

One person giving another $10.

Source: Karolina Grabowska/Pexels

This comes after there has been growing concern across America about what the healthcare system could look like, as the hospital operator has around 30 hospitals across the whole country. Should they close down, it will leave many without the healthcare they need.

Steward Health Care’s President Addressed Employees

Steward Health Care’s employees raised the alarm that they had not received their much needed paychecks in their bank accounts.

A sign for St Elizabeth’s Medical Center, part of Steward Health Care. It shows the directions for emergency and main entrance parking.

Source: @WCVB/X

The company’s president wrote to employees in a letter, telling them that they had received their reports of not receiving their paychecks and that they were looking into the problem and trying to solve it.

Steward Health Care Blamed Bank of America

In his letter to his employees, President Mark Rich said that the reason employees hadn’t received their paychecks yet was a processing error in Bank of America’s system.

Bank of America in the snow. The building is in the center of the image and is lit in red and purple. Two high-rise buildings are on either side of it.

Source: Matthew T Rader/Wikimedia Commons

Rich assured employees he had followed the bank’s correct procedure following the Chapter 11 bankruptcy filing and that the paychecks should be processed within the next 24 to 48 hours. He also urged employees to keep checking their bank accounts for any updates.


Steward Health Care Employs Over 30,000 People

With the recent Chapter 11 bankruptcy filing and employees not receiving their paychecks, this has been a great concern to many, as Steward Health Care employs over 30,000 people.

Healthcare professionals outside wearing blue scrubs, facemasks, and hairnets.

Source: Rusty Watson/Unsplash

The company also has 33 community hospitals over 9 states, cares for 2.2 million patients yearly, and has more than 12 million patient encounters every year. So, the bankruptcy filing has naturally been a concern for them.


Steward Health Care Will Sell Some of Its Hospitals

As they have had to file for Chapter 11 bankruptcy, the company has struggled to find ways to make more money to keep employees in their jobs.

A sign for Carney Hospital, part of Steward Health Care. The sign states where to go for emergency, receiving, and the main entrance.

Source: @ai2049life/X

As a result, the company has agreed to a date at the end of June 2024, where it will auction off some of its hospitals to try to make back some of the money it owes. However, this comes as a worry to its employees and patients as they don’t know whether they will retain their jobs or be able to access the care they have received for many years.


Steward Health Care Employees Could Incur Fines

One of the main worries that many Steward Health Care employees had was about having to pay any fines as a result of their paychecks not being cleared on time.

A group of healthcare professionals standing in a circle in scrubs, facemasks, and hair nets.

Source: National Cancer Institute/Unsplash

However, the company’s President has assured his employees the company is planning on covering any fines that are incurred so they don’t feel the extra financial burden.


Steward Health Care Employees Are Threatening to Walk Out

Due to not receiving their paychecks, many Steward Health Care employees are threatening the company with staging a walk-out if they do not receive their paychecks as they were promised in 24 hours.

Healthcare professionals in blue scrubs, white lab coats, and blue hair nets walking out of a room and down a corridor.

Source: Luis Melendez/Unsplash

While the company has assured that it is unlikely to get to this stage, many employees are not wholly convinced they will receive their paychecks to pay their bills on time.


Some Steward Health Care Employees Have Received Their Paychecks

Despite the delay in pay for many employees, others have started to see their paychecks and benefits enter their bank accounts.

A paycheck with an empty space to put the amount owed in.

Source: Money Knack/Unsplash

This will likely come as somewhat of a relief to those employees who are yet to receive their paychecks because they know that the money is coming, but it might be a little more delayed.


Steward Health Care Is Under Fire

Due to being in debt and filing for Chapter 11 bankruptcy, Steward Health Care has come under fire from local and federal elected officials, who are worried that the bankruptcy outcome could affect the millions of people who rely on its hospitals across America.

This is a sign for one of the Steward Health Care facilities. Arrows point where to go for emergencies, ambulance and chair entrance only, and deliveries and receiving.

Source: @ai2049life/X

Since a judge has ruled the company will have to sell all of its hospitals at auction, officials are worried about whether buyers will keep the hospitals or change them into something else and what this might mean for employees and patients.