The mayor and four of the city council members were getting paid almost $100,000 a year. The council members will now make the same amount as the fifth council member, Lorenzo Velez, who is paid about $8,000 for the part-time job.
Hernandez said he won't take any pay for the remainder of his term, which expires in March. He also said he will not seek re-election.
The city officials heard more than five hours of comments from outraged Bell citizens.
"The issue here is not whether your salaries and [Robert] Rizzo's salaries were legal, as you keep saying they are. The fact is that you knowingly and willingly approved of it, and you let it happen," said Bell resident Jason Vega.
"I will resign to my salary, but I will not resign to my position. I am here to stand by my people, to make the changes necessary and to apologize for all of this turmoil," said council member Teresa Jocobo amid spurts of booing.
"You were a crook yesterday, you're a crook today, and you'll be a crook tomorrow," another Bell resident Danny Harber said as he pointed to Jocobo.
State Controller John Chiang said he's been asked to conduct an independent audit of Bell's finances.
"We want to make sure we got the books clean and we provide transparency most importantly so that we can restore public confidence," Chiang said.
Attorney General Jerry Brown is also investigating the case, and he has subpoenaed hundreds of records including employment contracts.
Last week, City Manager Robert Rizzo, who was earning nearly $800,000 a year, his assistant and the city's police chief turned in their resignations.
Those resignations remain controversial because those officials still stand to make hundreds of thousands of dollars in pension payment.
Hernandez has apologized for the excessive salaries on the Bell city clerk's website.
"We know we have hard work ahead of us to restore Bell's trust even as we work to maintain the unparalleled city services that our families depend on," the mayor said in a statement.
Community activists still say they will keep trying to oust the mayor and remaining city council members.