Some staff could see cuts of up to 25%
Google employees could be seeing hefty pay cuts if they switch to working from home permanently.
Google employees based in the same office before the COVID-19 pandemic could see different changes in pay if they continue working remotely, according to a Reuters report. The pay cuts could be especially steep for remote workers who move to less expensive communities. Similar experiments are taking place across Silicon Valley.
Facebook and Twitter also slashed pay for remote employees who move to less expensive areas. Other companies, like Reddit and Zillow, have changed to location-agnostic pay models, saying such models are advantageous to hiring and retention, Reuters reported.
Google offers its employees a pay calculator that allows them to see the effects of a move on their paychecks. However, some remote employees – especially those who would otherwise commute long distances – could see pay cuts without changing addresses, according to Reuters.
“Our compensation has 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 told Reuters. The spokesperson said pay would differ from city to city and state to state.
Speaking anonymously out of fear of retaliation, one Google employee told Reuters that they typically commute to the company’s Seattle office from a nearby county, and would probably see their pay slashed by about 10% if they worked from home. The employee decided to keep going to the office despite a two-hour commute.
“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 and then take a pay cut.”
Jake Rosenfeld, a Washington University sociology professor, told Reuters that Google’s pay policy raised alarms about who would be most impacted.
“What’s clear is that Google doesn’t have to do this,” 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.”
Google’s internal salary calculator showed that an employee living in Stamford, Conn. – an hour away from Google’s New York office by train – would be paid 15% less for working remotely, while another employee from the same office living in New York city would see no pay cut for working from home, Reuters reported. West Coast Google employees told Reuters they could see pay cuts as high as 25% for remote work if they moved from San Francisco to an area of the state nearly as expensive, such as Lake Tahoe.
The calculator states that it uses Census Bureau metropolitan statistical areas to calculate salaries. However, many places workers typically commute from are not included in those areas. While many residents of Stamford, Conn., for example, work in New York City, Stamford isn’t included in the New York metro area.
A Google spokesperson told Reuters the company would not cut an employee’s salary based on them changing from onsite to remote work in the city where a Google office is located. Employees of the New York City office, for example, will be paid the same as employees working remotely within that city.