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It
is an experiment taking place across Silicon Valley, which often
sets trends for other large employers.
Facebook and Twitter also cut pay for remote employees who move
to less expensive areas, while smaller companies including
Reddit and Zillow have shifted to location-agnostic pay models,
citing advantages when it comes to hiring, retention and
diversity.
Alphabet Inc's Google stands out in offering employees a
calculator that allows them to see the effects of a move. But in
practice, some remote employees, especially those who commute
from long distances, could experience pay cuts without changing
their address.
"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.
One Google employee, who asked not to be identified for fear of
retaliation, typically commutes to the Seattle office from a
nearby county and would likely see their pay cut by about 10% by
working from home full-time, according estimates by the
company's Work Location Tool launched in June.
The employee was considering remote work but decided to keep
going to the office - despite the two-hour commute. "It's as
high of a pay cut as I got for my most recent promotion. I
didn't do all that hard work to get promoted to then take a pay
cut," they said.
Jake Rosenfeld, a sociology professor at Washington University
in St. Louis who researches pay determination, said Google's pay
structure raises alarms about who will feel the impacts most
acutely, including families.
"What's clear is that Google doesn't have to do this," Rosenfeld
said. "Google has paid these workers at 100% of their prior
wage, by definition. So it's not like they can't afford to pay
their workers who choose to work remotely the same that they are
used to receiving."
Screenshots of Google's internal salary calculator seen by
Reuters show that an employee living in Stamford, Connecticut -
an hour from New York City by train - would be paid 15% less if
she worked from home, while a colleague from the same office
living in New York City would see no cut from working from home.
Screenshots showed 5% and 10% differences in the Seattle, Boston
and San Francisco areas.
Interviews with Google employees indicate pay cuts as high as
25% for remote work if they left San Francisco for an almost as
expensive area of the state such as Lake Tahoe.
The calculator states it uses U.S. 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.
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. Employees
working in the New York City office will be paid the same as
those working remotely from another New York City location, for
example, according to the spokesperson.
Google did not specifically address the issue for commuters from
areas such as Stamford, Connecticut.
(Reporting by Danielle Kaye; editing by Peter Henderson and Lisa
Shumaker)
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