SILICON VALLEY: Google may cut pay of staff who work from home

SILICON VALLEY: Google
employees in the US who opt to work from home permanently may get a pay cut.

The
technology giant has developed a pay calculator that lets employees see the
effects of working remotely or moving offices.

Some
remote employees, especially those with a long commute, could have their pay
cut without changing address.

Google
has no plans at this time to implement the policy in the UK.

Employees
in many businesses have proved that working from home permanently is viable
during the Covid pandemic.

Many
companies are looking ahead to how employees will work as the pandemic recedes,
even as the US continues to battle the Delta variant of the disease.

Silicon
Valley firms, some of which are keen to get employees back to their desks, are
experimenting with employee pay structures.

Big tech
companies including Microsoft, Facebook, and Twitter have offered less pay for
employees based in locations where it is more inexpensive to live.

But
smaller firms such as Reddit and Zillow have said they will pay the same no
matter where employees are based, saying that this improves diversity.

A Google
spokesperson said: “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.

“Our
new Work Location Tool was developed to help employees make informed decisions
about which city or state they work from and any impact on compensation if they
choose to relocate or work remotely.”

Alarm

One
Google employee, who works in Seattle but has a two-hour commute, complained to
Reuters of being faced with a 10% pay cut for choosing to work from home
full-time.

“It’s
as high a pay cut as I got for my most recent promotion,” the employee
said. “I didn’t do all that hard work to get promoted to then take a pay
cut.”

Jake
Rosenfeld, a sociology professor at Washington University in St. Louis, said
Google’s move raises alarms about who will feel the impact most acutely,
including families.

“What’s
clear is that Google doesn’t have to do this,” Prof 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.”

A Google
employee in Stamford, Connecticut, which is an hour away from New York by
train, would be paid 15% less working remotely, while there were 5% and 10%
differences in the Seattle, Boston and San Francisco areas.

Google
will not change employees’ pay if they work fully remotely from the same city.

Contract questions

In the
UK, it’s a fundamental part of employment law that employers cannot alter
aspects of contracts such as rates of pay without the consent of employees, or
without terminating those contracts and renegotiating them, said Emma Bartlett,
a partner at employment lawyers CM Murray.

From an
employee perspective, it would be demoralising to be paid less for doing the
same job, she said, and from a business perspective, it would have the
potential to create two tiers of employment, with some employees expected to be
in the office, and some not.

If people
stayed home working for childcare reasons, and women continue to take the main
responsibility for childcare, then this could have the effect of widening the
gender pay gap, she said.

Workers
may be treated differently in other respects, she added, and organisations
would have to work hard to make sure employees were not treated differently in
terms of training, promotion, and access to clients.

Hybrid experiments

Some
businesses, such as US technology giant Cisco, have put in place a hybrid
working plan that has no mandates about how often employees go into the office.

Cisco
expects that less than a quarter of its workforce will want to be in an office
for three or more days a week.

But other
firms, such as Goldman Sachs, want workers to return to offices.

The
investment bank’s boss, David Solomon, said in February that working from home
was “an aberration” rather than “the new normal”.

The
Chartered Institute of Personnel and Development (CIPD), which represents human
resource professionals in the UK, said it was always “the safest
option” for firms to seek express written agreement from employees before
changing the level of their pay.

In its
guidance to employers, it says that imposing a pay cut is a
“high-risk” approach, since workers can bring claims for breach of
contract or even constructive unfair dismissal.

Rachel
Suff, senior employment relations adviser at the CIPD, said: “Rather than
making sweeping decisions on issues like pay and how, where and when people
work, businesses should aim to balance individual needs with the needs of the
organisation.

“It
would be quite near-sighted for employers to think about adjusting pay at this
early point in hybrid working, given there are so many things to still be
ironed out and many people are still yet to return to a physical workspace.

“Given
the tight labour market, businesses also need to stay attractive and cutting
pay could prove to be a false economy if it turns talent away.”