Google employees opting to work from home face disproportionate pay cuts: report
11 Aug 2021
Google is introducing a differential pay system for employees working from office and those who switch to working from home permanently, in order to compensate for the time and expenss involved in commuting to office.
Accordingly, those based in the same office before the pandemic could see different changes in pay if they switch to work from home on a permanent basis, according to a company calculator.
Other silicon Valley companies like Facebook and Twitter have also announced pay cut for remote employees who work from less expensive areas, while smaller companies like Reddit and Zillow have shifted to location-agnostic pay models, citing advantages when it comes to hiring, retention and diversity.
Google’s calculator allows employees to measure the loss of money, or gains from a work-from-home shift. For those who have to commute long distances to reach office, there could still be a loss of pay even without opting to work from home.
Reports citing the calculator say that the pay difference is also too wide for employees based in different cities if they opt to work from home.
A Reuters report pointed out that an employee living in Stamford, Connecticut - an hour from New York City by train - would be paid 15 per cent less if he/she worked from home, while a colleague from the same office living in New York City would see no cut from working from home.
Similarly, there are 5 per cent and 10 er cent differences in pay levels in the Seattle, Boston and San Francisco areas.
For Google employees the pay cut would be as high as 25 per cent for remote work if they shifter from San Francisco to an equally expensive area of the state such as Lake Tahoe.
The calculator states it uses US Census Bureau metropolitan statistical areas, or CBSAs. Stamford, Connecticut, for example, is not in New York City's CBSA, even though many people who live there work in New York.
"Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from," a Google spokesperson said, adding that pay will differ from city to city and state to state.
A Google spokesperson said the company will not change an employee's salary based on them going from office work to being fully remote in the city where the office is located. Accordingly, employees working in the New York City office will be paid the same as those working remotely from another New York City location, the spokesperson pointed out.