- Google developed a salary calculator that potentially reduces pay for employees who choose to work from less expensive areas.
- Microsoft, Twitter, and Facebook have also developed pay schedules that would adversely affect pay for employees who opt to work remotely from less expensive locations.
- Proponents of location-agnostic pay and pro-remote work policies say that it promotes diversity, inclusion, and morale.
Work from home (WFH) has many obvious perks (as well as some downsides – like home office expenses, for example), but until now location-based pay cuts have not been widespread. This may be changing, at least for some remote workers in the technology sector, according to a widely cited report from Reuters Tuesday.
Google (Alphabet, Inc.) has developed a salary calculator that would, in theory, reduce pay for existing employees who choose to continue working from home indefinitely from less expensive areas — even if they were promoted before the global pandemic and made long commutes into the office.
The pay reductions will not only cut pay for employees who flee expensive areas like San Francisco to work remotely from a cheaper location. Workers who previously commuted long distances into Silicon Valley for some tech giants could see significant pay reductions of up to 25 percent.
Ironically, Silicon Valley companies seem to be leading the campaign to sanction workers who choose to continue working from home indefinitely — despite creating much of the technology that makes remote work possible.
Microsoft, Twitter, and Facebook have also developed pay schedules that would adversely affect pay for employees who opt to work remotely from less expensive locations.
A Google employee working from home in Stamford, CT (only an hour from NYC) would be paid 15% less than her office coworkers in Manhattan, according to screenshots of the salary calculator sent to Reuters.
To the delight of remote workers, some companies are embracing a culture that nurtures WFH for all employees by having location-agnostic compensation structures. Zillow and Reddit, for example, are allowing most employees to work remotely indefinitely.
“For the vast majority of our employees, we are committing that we’re going to be a flexible employer of the future. That means for some workers, they may never come back to an office,” Zillow Chief People Officer Dan Spaulding told CNN.
Proponents of location-agnostic pay and pro-remote work policies say that it promotes diversity, inclusion, and morale.
Suggested Reading: How Remote Work Policies Drive Diversity and Inclusion
Smaller tech companies are following this example as well.
Wildbit, a profitable web development company founded in 2000, recently made the decision to pay their employees the same no matter where they live in the U.S. Along with a 4-day work week and the option for most employees to work remotely, the company insists on a “people-first” work culture.
“In the US, when someone moves to a place with a lower cost of living, we never decrease their pay. That would be preposterous; they’re making a personal choice with their own financial goals in mind, CEO Natalie Nagele said in a blog post on Wildbit’s website. “Maybe they’re moving to be closer to family, to save more money for down payment, or to be able to retire sooner. It’s their choice. But at the same time, we had folks living in countries with a lower cost of living and being paid based on their location.”
One of Wildbit’s products is a career search website called People-First Jobs. Companies that list vacancies must meet specific criteria, including remote work, flexible schedules, and sensible hours.