Working from home permanently would cause different changes in pay for Google employees based in the same office before the pandemic, with long commuters hit harder, according to a company pay calculator seen by Reuters.
It is an experiment taking place across Silicon Valley, which often sets trends for other large employers.
Pay cuts have also affected facebook and Twitter employees who want to work remotely and moved to less expensive areas, while smaller companies including Reddit and Zillow have shifted to location-agnostic pay models, citing advantages when it comes to hiring, retention and diversity.
Alphabet Inc’s Google stands out in providing employees a calculator that allows them to see 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.
“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 said, adding that pay will differ from city to city and state to state.
One Google employee, who asked not to be identified for fear of retaliation, typically commutes to the Seattle office from a nearby county and would likely see their pay cut by about 10 percent by working from home full-time, according estimates by the company’s Work Location Tool launched in June.
The employee was willing to work remotely but decided to keep going to the office – despite the two-hour commute. “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,” they said.
Jake Rosenfeld, a sociology professor at Washington University in St. Louis who researches pay determination, said Google’s pay structure raises alarms about who will feel the impacts most acutely, including families.
“What’s clear is that Google doesn’t have to do this,” Rosenfeld said. “Google has paid these workers at 100 percent 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.”
Screenshots of Google’s internal salary calculator seen by Reuters show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15 percent less if she worked from home, while a colleague from the same office living in New York City would see no cut from working from home. Screenshots showed 5 percent and 10 percent differences in the Seattle, Boston and San Francisco areas.
Interviews with Google employees indicate pay cuts as high as 25 percent for remote work if they left San Francisco for an almost as expensive area of the state such as Lake Tahoe.