Paycuts due to remote work: shouldn’t it be the other way around?
Some employers absolutely want their workforce back into the building; some others have figured out that it is more efficient to have them work remotely.
In any case, it is by now obvious that even companies that have been unaffected by the COVID crisis are seizing the opportunity to review their employees’ cost levels: employees who want to move to cheaper areas (looking primarily for bigger housing, able to accommodate the nowadays necessary home office) are now facing pay cuts, despite the fact that they are taking over higher costs to maintain a home office and that their employer is saving money by not having them at the office.
Twitter and Facebook have already cut salaries for U.S. employees who are working from home that moved to less expensive areas of the United States. In June, Google developed a new “Work Location Tool” for employees to calculate their pay. It 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,” 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,” a Google spokesperson told CBS News.
Google has more than 135,000 employees worldwide, and CEO Sundar Pichai said in April that the company expected 20% of its workforce to be remote by this fall. It is not clear at this time whether the potential pay cut for employees seen in the internal calculator is for U.S.-based workers or the company’s global workforce.
According to the company filing though, Google parent Alphabet Inc. saved YoY $268 million in expenses from company promotions, travel and entertainment in Q1, which on an annualized basis, would be more than $1 billion, while revenues were boosted by 34%.
The truth is that remote employees cost much less to their employer, while they face increased costs themselves, for home office equipment, need for space, professional internet connection…
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