Google may reduce pay of staff who work from home

A Google employee

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 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.

Man working from home

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, told Reuters that they would get a 10% pay cut if they decided to work from home full time.

“It’s as high of 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,” Professor 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, and there were 5% and 10% differences in the Seattle, Boston and San Francisco areas.

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

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 in February said that working from home was “an aberration” rather than “the new normal”.

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