Yahoo Finance Google plans to slash remote workers’ pay by 25%
Google is making moves to potentially reduce remote workers’ salaries by as much as a quarter as the world moves towards hybrid offices.
Employees who previously made a one-hour commute to the company’s Manhattan offices from Connecticut could see their pay cut by 15 per cent if they continued to work from home, Reuters has reported.
That’s based on an internal calculator that USA-based workers can use to see how their pay may change if they choose to work remotely.
However, workers who live within the five boroughs of New York City, or the Bronx, Brooklyn, Manhattan, Queens and Staten Island, who chose to work from home would not see their pay changed.
Reuters’ screenshots show that workers who choose to live further away from their office will see even greater pay cuts.
For example, a worker who left San Francisco to live in Lake Tahoe (CONTEXT) would see their pay reduced by a quarter.
A Google spokesperson said their packages had always been determined by location, and the company paid competitive salaries.
However, workers told Reuters the pay cuts could equate to as much as the value of their promotion.
Facebook and Twitter follow similar compensation strategies, with the Silicon Valley companies claiming their packages are based on the cost of living in workers’ areas.
As of 15 June, all Facebook employees can request to work from home full-time, but workers who choose to move to cheaper areas will see their pay cut.
Facebook also said it wants workers to be in the office at least half the time to promote team building.
And even before the COVID-19 pandemic transformed kitchen benches into home offices, Twitter CEO Jack Dorsey was considering pay localisation.
He told “The Boardroom: Out of Office” podcast in August 2020 that plans to pay workers based on where they lived had been in the works for two years before the pandemic.
However, Twitter also grants remote workers a US$1,000 work-from-home allowance, regardless of where they live.
Deutsche Bank made headlines last year after suggesting that 5 per cent of remote workers’ salaries be paid to those who cannot do their work from home, in a bid to address the spending void that occurred when office workers fled CBDs in 2020.
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