A new report suggests that Google employees could actually lose money by continuing to work remotely.
According to an internal salary calculator seen by Reuters and others, a Google employee could possibly face a 25% pay cut if they opt to work from home permanently. During the pandemic’s heyday, Google paid staffers who worked remotely less than others based on how much it costs to live in their area. But this move has the earmarks of a shift rather than a wrinkle because it could reportedly affect workers without them changing their physical address.
"It's as high of a pay cut as I got for my most recent promotion,” one Google employee told Reuters. “I didn't do all that hard work to get promoted to then take a pay cut.”
A Connecticut-based employee who lives an hour away from their Google office in New York shared a screenshot of the calculator with Reuters, and it showed a 15% cut if the person works from home. Conversely, a Google employee who lives in New York City or San Francisco would see no cut.
Reuters framed the move as an “experiment” -- one being incubated in Silicon Valley. The area is not only the home of many Big Tech companies but also the place where trends like this get their start.
Google isn’t alone in this either. More companies are likely facing the same dilemma as they give employees the option to work remotely. Both Facebook and Twitter also cut pay for remote employees who move to less expensive, more cost-effective areas.
On the flip side, smaller companies including Reddit, Wildbit, and Zillow have shifted to a location-agnostic pay structure -- meaning employees will be paid consistently regardless of where they live. The companies cite advantages like retention and diversity, and they say employees feel more respected.
A Google spokesperson defended the company’s position, saying the way the company compensates its workers is consistent with what it has always done.
"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,” they said.