The employees of the tech-giant company, Google, reporting to the same office could see different changes in pay if they switch to work-from-home permanently.
An experiment on compensation according to location is taking place across the Silicon Valley, often setting trends for other larger employers. Facebook and Twitter also have cut payments for employees who have moved to remote working or other less expensive places. Whereas smaller companies like Reddit and Zillow have adopted the location-agnostic pay model, citing advantages like hiring, retention, and diversity.
Google is different as it offers employees a calculator that allows them to see the effects of a move. However, in a real scenario, some of the remote employees, including those who commute from long distances, could see a deduction in pay without changing their addresses.
According to a Google spokesperson, the compensation packages at Google have always been decided by location. And, the company pays at the top of the local market based on where an employee works from i.e. payment given will differ from place to place.
Jake Rosenfeld who is a professor of sociology at Washington University in St. Louis, researches on the subject of pay determination. He believes that Google’s pay structure raises alarms about the employees who will feel the impacts of pay cuts.
Rosenfeld further added that Google does not need to do this. Why? As they paid the workers at 100% of their prior wage by definition. So it is not something like Google cannot pay their employees who choose to work remotely the same they used to get.
The screenshots from Google’s internal pay calculator seen by Reuters speak about the pay cuts. If an employee puts up in Stamford-an hour from New York City by train. He would see around a 15% reduction in pay if they choose to work from home. While a colleague from the same office putting up in New York would see no pay cut. Similarly, screenshots showed 5% and 10% differences in Seattle, Boston, and San Francisco areas.
Google employees admit pay cuts as high as 25% for remote areas that are less expensive.
Those employees working out of the New York City office will get the same compensation as that of an employee working remotely from another location in the same city.