About 10 years ago, Amir Hamad happily informed an entry-level hospital employee he supervised that they had earned a promotion. The employee thanked Hamad but declined the offer.
“I thought they would be thrilled about it,” said Hamad, now vice president and chief nursing officer at a different organization, Ascension Saint Thomas West Hospital in Nashville, Tennessee. “I could not understand why they turned the position down.”
“I asked and they said, ‘If I take this, I’ll get a raise. I’m appreciative of that, but it will exclude me from these public assistance benefits that I get,’” Hamad said. “That’s the first time someone opened my eyes to the benefits cliff.”
Benefits cliffs can occur when people earn raises or take on more work hours and lose eligibility for benefits like food or housing assistance because of the increased income. The additional earnings may not fully cover the lost benefit value, creating a financial resources gap.
One Nashville restaurant worker, for example, shared that the roughly $200 per month raise she earned would cause her to lose more than $800 in monthly public assistance benefits.
Many factors go into retention metrics and workers’ decisions about whether to stay in a given job or advance in their careers. But particularly for employees seeking to move from lower-wage or entry-level positions along a career path, fear of a benefits cliff can limit economic mobility.
“It makes me think, and it should make every company leader think, ‘Do you really want to give this person a raise?’” Hamad said. “You think you’re helping, but in reality, it’s causing challenges.”
Increasingly, employers across industries are discovering the issues benefits cliffs raise for both the financial stability of their employees and the effective operation of their businesses. Recent pilot programs, partnerships, and conversations offer employers new guidance on how they might best address the issue.
“Employers are always mentioned as one of the big players in the solution to the benefits cliff,” said Alex Ruder, director and principal adviser at the Federal Reserve Bank of Atlanta. “But there’s never been a clear guide on what employers can actually do.”
Scanning the workforce for benefits cliff pain points
Based on his team’s significant research on benefits cliffs, Ruder said that raising workplace awareness of the issue and securing executive leadership buy-in to act are vital first steps.
“Employers should first know how the benefits cliff can affect their employees. The evidence shows that the majority of people want to advance and earn more. But some workers could turn down opportunities. Or they could advance but become financially destabilized or end up quitting because they can no longer afford something they need.”
– Alex Ruder, director and principal adviser, Federal Reserve Bank of Atlanta
The exact point where benefits cliffs might start affecting workers varies across job functions, regional wage levels, and career trajectories. In large companies with a wide range of job functions, leadership can first identify which segments of the business’s positions and career paths fall into these compensation ranges.
Understanding which employees may be more likely to encounter cliffs during job transitions helps employers know who may need related career advancement support.
At Goodwill Industries of the Southern Piedmont in Charlotte, North Carolina, 124 employees recently participated in a Benefits Cliff Employer Pilot. The pilot showed Goodwill staff earning $15 to $18 per hour were most likely to encounter benefits cliffs, particularly involving SNAP (the Supplemental Nutrition Assistance Program), housing assistance, and Medicaid, said Justin Taylor, the organization’s stakeholder engagement manager. More than 40 percent of pilot participants learned they either had already or could in the future experience a benefits cliff.
The Atlanta Fed, one of three other employers participating in the same pilot, conducted its own organizational assessment with a surprising result.
“Benefits cliffs could actually affect employees beyond an entry-level salary,” Ruder said. “That’s mainly due to the relatively high income-eligibility threshold for subsidized child care, which is about $76,000 per year for a family of three in Georgia.”
A daunting employer cost to addressing lost benefits
Employers trying to address benefits cliffs say it can be awkward and overwhelming dealing with what they see as a human services problem. Even in companies that pride themselves on having a compassionate corporate culture, supervisors may be reluctant to ask employees to share details of their personal finances.
There’s also the cost of potentially replacing the value of lost benefits for every applicable employee across a large company.
Joe Wesley, director of government relations and strategic initiatives at Wegmans Food Markets, learned about benefits cliffs while participating in an antipoverty effort in Rochester, the company’s headquarters city in Monroe County, New York. In discussions with leadership back at the office, he heard from human resources staff that it wasn’t uncommon for employees to decline additional work hours over benefits concerns.
“We didn’t understand why people were turning down pay increases,” Wesley said. “Our employees knew the math way better than we did.”
Wesley scanned the company to determine where Wegmans employees moving along a career path might be vulnerable to cliffs. For example, a hypothetical employee receiving benefits could face several cliffs as she advanced toward becoming an assistant manager.
If Wegmans covered the cost of the employee’s lost benefits over time, Wesley said, “all of that gap we were filling would still just break her even. We’re basically doing the job of the government’s public assistance programs, but she’s still no further along after four years.” She would be just one of many employees in the same situation.
“We were trying to be creative initially, but as an employer with 54,000 employees, the math just doesn’t work,” Wesley said. “Recognizing the percentage of employees who are in some level of those circumstances with benefits cliffs, we would lose our shirts.”
“There really is no easy answer,” he said. “We realized this is too big, and we’re not experts in all the intricacies of human services.”
Taking a coalition approach with defined roles
Wesley reached out to leaders in Monroe County to talk about helping employees navigate benefits cliffs and learned that other area employers also had run into the issue. Recognizing the problem, Monroe County sought state support for a pilot program.
In May 2025, New York state lawmakers allocated $3 million for the Monroe Ladder Demonstration Program to better understand and address cliffs for regional workers through a combination of public and employer resources and financial counseling. Wesley said Wegmans may be involved as a business representative as the program takes shape.
Wegmans isn’t alone in considering how to play an effective but manageable role as an employer interested in helping to solve the complex benefits cliff problem.
“We are not saying to employers that the benefits cliff is their fault or their issue alone to solve. We’re saying that they should be at the table.”
– Timberley Russell, director of training and employer engagement, Beyond the Cliff
Many emerging strategies often involve companies working within coalitions. Each partner fills an important role in identifying and testing cliff mitigation strategies.
Community organizations specializing in workforce development bring vital trust built over time with affected community members. In some cases, organizations employ experienced coaches to help people navigate cliffs using specialized tools.
Government and philanthropic partners often provide funding for coaching and cliff mitigation payments, and they know the ins and outs of state and local benefits programs. Researchers evaluate cliff mitigation strategies and design and adjust the tools coaches and participants use.
Employers can assume several vital roles as part of these coalitions, according to experts. They help expand awareness of the issue among employees, policymakers, and the business community. Businesses also serve as laboratories to test cliff mitigation strategies in real workplaces.
Employers also can look internally at their benefits and compensation structures. They may identify opportunities to prevent benefits cliffs within company career paths and potentially offer assistance to those experiencing cliffs.
Frontline health care: When benefits cliffs affect more than employee and employer
Benefits cliffs affect workers in every industry. But with the health-care sector facing persistent nursing shortages, cliffs raise particular threats extending beyond impacted frontline workers to the hospitals and patients relying on them.
Recent research shows nurses leave their roles for a variety of reasons, from retirement to work-life balance concerns. Hospitals incur turnover expenses averaging $28,400 to $51,700 replacing each departing registered nurse.
“Education on this issue needs to include what the full impact is to everybody. If I don’t have the employees to staff a bed, that means I’m shutting beds down. And in turn, the community doesn’t have quick access to care. Emergency rooms start loading up and backlogging. The benefits cliff truly ties to everything. If this domino falls, everything is impacted.”
– Amir Hamad, vice president and chief nursing officer, Ascension Saint Thomas West Hospital
“For a hospital to be financially viable, you have to make sure you’re containing costs wherever that may be,” said Amir Hamad, vice president and chief nursing officer at Ascension Saint Thomas West Hospital in Nashville, Tennessee. “When your organization has more than 1,200 nurses, as we do, that dollar amount grows fairly quickly. The goal is to get good employees and retain them.”
Employees moving up the nursing career pathway become an essential part of an organization’s staffing pipeline. The path from nursing assistant to licensed practical nurse to registered nurse typically takes at least three years, requiring additional training and degrees. Over that time, workers’ hourly wages may grow from less than $15 to $30 or more, an increase that can trigger benefits cliffs in many public benefit programs.
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The risk of losing vital frontline hospital workers
Baystate Medical Center in Springfield, Massachusetts, noticed a significantly elevated turnover rate among employees earning less than $22 an hour. Hoping to improve retention among frontline clinical workers, the hospital modestly raised wages for those positions. Administrators then learned that the increases could spur benefits cliffs for some employees.
“We thought we were doing something great by increasing wage ranges, but we’re actually causing more harm if they’re losing public benefits,” said Iesha Ramos, Baystate’s workforce planning partner. “Looking at turnover rates, we’re losing out if people aren’t able to go from part time to full time because of benefits loss.”
These workers include patient care technicians and medical assistants vital to the hospital ecosystem. Employees in the hospital’s sterile processing department also may be vulnerable to benefits cliffs, Ramos said. Without their work sanitizing medical instruments, surgeries can’t proceed.
“These are our frontline workers,” she said. “The hospital can’t function without them.”
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Help for workers navigating benefits cliffs along a nursing career pathway
One pilot program, Massachusetts’s Bridge to Prosperity, recognized the threat benefits cliffs can pose to frontline workers’ career advancement. After 18 months of intensive planning, a pilot coalition including hospital employers launched the program’s first cohort in February 2025. One participant track focuses on helping lower-level clinical staff navigate cliffs as they move along the nursing career path.
Through Bridge to Prosperity, participant employees at Baystate Medical Center and on the Boston Medical Center pediatrics staff receive one-on-one financial coaching, cash assistance to bridge benefits gaps, and career training and advancement at work.
Recent research examined 75,000 job training programs eligible to receive funding under the federal Workforce Innovation and Opportunity Act. The study found participants in the most common of these nursing assistant training programs earned less than $24,000 per year.
“We’ve observed many people leaving the nursing assistant profession to make $1 more per hour in other sectors of work,” said Anne Kandilis, director at Springfield WORKS, the partner organization implementing the Bridge to Prosperity program. “That creates a pattern of never-ending investment in replacing staff in this high-demand, low-wage job.”
The turnover occurs, in part, because frontline workers attempting to move up into more advanced nursing positions can encounter benefits cliffs, Kandilis said. “We wanted to break that cycle. We need nurses, so the investment should be at the earliest level.”
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Innovating to retain essential health care employees
Coaching sessions help inform employers about what really drives employees’ decisions around promotions or increased hours. “Rather than assuming we know, it’s important for us to talk to the participants to learn what’s causing turnovers and what resources are needed,” Ramos said.
“I hope that there’s a proof of concept demonstrated with this pilot and opportunity to see how it can be scaled,” said Rich Seward, director of implementation strategies for Children’s HealthWatch at Boston Medical Center, who served on the pilot’s steering committee. “There could be policy solutions that don’t necessarily rely on transforming our social safety net.”
Involving employers as active partners in efforts to tackle benefits cliffs helps businesses better understand how the issue can affect both employees and their bottom lines, Kandilis said. “The question goes beyond the moral and ethical conversation. High turnover, employee dissatisfaction, and low job quality all are inputs into cost for the employer.”
And in health care, if workers back away from promotions due to benefits cliff concerns, the ripple effects extend beyond employee and employer.
“Education on this issue needs to include what the full impact is to everybody,” Hamad said. “If I don’t have the employees to staff a bed, that means I’m shutting beds down. And in turn, the community doesn’t have quick access to care. Emergency rooms start loading up and backlogging.”
“The benefits cliff truly ties to everything,” he said. “If this domino falls, everything is impacted.”
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The value of coaching in-house where possible
Goodwill Industries of the Southern Piedmont is uniquely equipped to help both its clients and employees with benefits cliffs. The organization implemented the Benefits Cliff Employer Pilot through Pathways, its in-house employee career development program. Coaches and participants used the Atlanta Fed’s CLIFF Snapshot tool, mapping out different career paths participants might follow to see where cliffs could occur along the way.
“Using the tool helped us visualize and quantify the benefits cliff problem and allowed our Pathways participants to have more strategic conversations with their coaches around next steps,” said Taylor at Goodwill.
The organization’s established culture around coaching-based workforce development also helped reduce the stigma employees might feel discussing their personal finances with a manager. “One of the biggest factors for success with the pilot program was trust,” Taylor said.
“We don’t really expect our employers to get down into the nitty gritty of our lives, and sometimes that trust isn’t there because it hasn’t been established. I would encourage employers to find those ways that you’re already connecting with your employees so you can build and demonstrate that trust to have those more open conversations.”
– Justin Taylor, stakeholder engagement manager, Goodwill Industries of the Southern Piedmont
Ninety percent of pilot participants left their coaching sessions with a clear plan and next steps to navigate their particular benefits cliff situations. The experience was so successful at Goodwill Industries of the Southern Piedmont, Ruder said, that Goodwill Industries of Kentucky is adopting the CLIFF tools in coaching sessions with its employees as well.
Partnering with community resources when in-house coaching isn’t an option
Employers who don’t have in-house coaches can instead connect with community organizations to help employees address the cliffs they face. That kind of partnership is at work between Ascension Saint Thomas West Hospital and Beyond the Cliff, a collaborative based in Nashville’s Martha O’Bryan Center.
Hamad said Timberley Russell, Beyond the Cliff’s director of training and employer engagement, frequently participates in hospital events and career fairs. Employees recognize and connect with her to learn more about the coaching options available through the Martha O’Bryan Center and other community resources.
“We want to create an environment where an employee won’t just leave their job once they get that letter informing them that their benefits reduced because their income went up,” Russell said. “Instead, they’ll go to that trusted person within their work environment for help.” For employees at Ascension and other companies partnering with Beyond the Cliff, that trusted resource may be Russell herself.
Ascension Saint Thomas West also focuses on educating staff about the benefits cliff in neutral ways to avoid stigmatizing those who then realize they might be in a benefits cliff situation. The hospital provides information through partner organization brochures placed around the facility and handed out during career conversations.
Russell said this practice reflects the advice she regularly offers to area employers who want to help but are concerned about invading their employees’ privacy. “It’s great if you can put what employees need in front of them without any pressure or requiring them to identify themselves,” she said.
Russell suggests that human resources staff and managers actively talk about the benefits cliff at new hire orientations and when they review benefits and career plans each year with employees. These are moments when people may be considering a change in position or may be offered a raise, potentially triggering cliffs.
“Employers can help their employees deal with benefits cliff issues once they fully understand them, and once there’s a mechanism for honest conversation around what would work for both employee and employer.”
– Anne Kandilis, director, Springfield WORKS
Employers as educators, innovators around the benefits cliff
Employers can also try to identify opportunities within their own benefits and compensation structures to include elements that can mitigate cliffs. Human resources or career development teams can train their staff on using the CLIFF tools. Or, Taylor suggested, employers could consider offering tiered benefits systems or aligning their wages with a living income standard. Employer toolkits available through Goodwill and Beyond the Cliff share strategies along these lines applicable to different business types.
Advocates for policy change around benefits cliffs emphasize what they see as the unique importance of employers speaking out to shed light on the situation. Hamad, Taylor, and Wesley each have presented to other employers and policymakers what they’ve learned about benefits cliffs’ workforce impact.
“While we nonprofits are working on a national agenda and making recommendations for change, we understand that our voices aren’t enough to move the issue,” Russell said. “We need the employers—the businesses that fuel our economy.”
