The pandemic created a tempting opportunity for many urban workers who found themselves working from home: to move somewhere cheaper and take their big city salaries with them. There were hopes this could rebalance our economies too, by allowing good jobs to spread out of expensive and overcrowded cities into areas that could use the boost. But as employers begin to adjust their policies to a post-pandemic world, there is a possibility the dream will evaporate. If you move to cut your living expenses, your employer might cut your pay.
Google staff who decide to work from home permanently after the pandemic will have their pay determined by their location, Reuters reported last week. Someone living in Stamford, Connecticut will be paid 15 per cent less if they work from home, unlike someone who works from home in New York City, for example. Facebook and Slack have also said they will adjust people’s salaries based on where they live.
This approach is not unusual in the tech world, where remote working was relatively common before the pandemic. Google has 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.” Gitlab, a software company with 1,300 all-remote staff, publishes its compensation calculator online. It uses data on market salaries in the person’s location to determine a “competitive rate”.