Google – Alphabet Inc (NASDAQ:GOOGL) – is analyzing the possibility of a pay cut on those workers who choose home office permanently. The initiative follows a Silicon Valley trend and could hit long commuters the hardest.
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Recalculating Pay
Google’s initiative is generating outrage among some of its employees, after proposing a salary reduction for those who decide to make a permanent home office.
The company’s salary recalculation could affect more those who live far from the headquarters, to the extent that some are considering commuting to offices for two hours before accepting a reduction in their income.
According to Reuters, it is an experiment carried out in Silicon Valley that could set a trend for other large employers. Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) have already cut the pay of their remote employees when they move to less expensive areas.
“Smaller companies including Reddit and Zillow Group Inc Class A (NASDAQ:ZG) have shifted to location-agnostic pay models, citing advantages when it comes to hiring, retention, and diversity.”
Google offers its employees a calculator through which they can appreciate the effects of a move.
“But in practice, some remote employees, especially those who commute from long distances, could experience pay cuts without changing their address.”
Reactions
A Google spokesperson said that the salary will vary from city to city and state to state, and added: “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.”
According to data from Google’s Work Location Tool launched in June, an employee who usually commutes to the Seattle office from a county nearby could see their wage reduced by nearly 10% if they choose to work from home full-time.
This person was contemplating home office but set out to keep commuting for two hours every day. “It’s as high of a pay cut as I got for my most recent promotion. 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, “What's clear is that Google doesn't have to do this … Google has paid these workers at 100% of their prior wage, by definition.”
The company will not modify a worker’s remuneration based on them going from office work to being fully remote in the city where the office is located, a Google spokesperson told Reuters.
Both Google and Facebook are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.
