Long term lookout, I think companies who requiring people to go to the office because of nature of their work will likely pay employees more. Employees who need the extra money won’t mind going into the office.
And companies are already reducing pay based on distance of employees’ homes if they choose to work from home.
I think the market will automatically balance itself out in a few years.
There are two sides to this and one side consistently seems to get ignored in these threads. If a company in San Francisco decides it will allow its employees to work from anywhere from now on, but pay according to local cost of living, then employees who had been based out of San Francisco and decide to move to San Antonio may have to take a pay cut to do so.
That is the side that is always focused on.
The other side is people who already lived in San Antonio but can't relocate, for one reason or another. Their spouse has a career and doesn't want to leave. Their kids are in school and don't want to leave. They're disabled or have family in the area that depends on them. Those people can suddenly go work for the company in San Francisco that is no longer requiring you to relocate, and might make less than employees based in San Francisco, but more than anyone was offering in San Antonio.
This is the side that never seems to get brought up.
It's not at all clear that, when the dust settles, the balance of those who had to take pay cuts versus those who saw pay raises to work remotely is going to work out with more seeing pay cuts. Short run that will be the case just because most companies had a lot more pre-existing employees in March 2020 than they have hired since. But that won't remain the case forever.
A little unintuitive if the employer is paying the office worker more than the remote worker. It's cheaper for the employer if they don't have to pay for offices, pay those electric bills, hire the janitorial staff, etc.
I suppose the higher pay reflects the employer's expectation of a higher return on productivity, creativity, from that employee.
Or, put another way, they are docking the pay of the remote worker expecting that they are probably not clocking in a "full days work" or will fail to deliver on the fruits of collaboration....
Companies tend to pay what they need to in order to hire someone and hopefully retain them. A lot of factors play into that including overall skills, fit with the specific job, whether the team is mostly co-located and where, whether they're local/remote/willing to relocate, market rates where they're going to live, etc.
I do expect we'll see some equalizing of salary bands at remote heavy companies. If I don't care if you're in the Bay Area or not, your decision to live there is a personal choice just like living in Aspen would be.
> I suppose the higher pay reflects the employer's expectation of a higher return on productivity, creativity, from that employee
Not necessarily higher productivity, but different. An employee that is present at the physical office when most people don't, is providing a peculiar (and rare) kind of value besides their actual productivity in their role, _if_ the company values something about their physical offices. There may be many reasons why the company would, but exploring that is a different topic.
>A little unintuitive if the employer is paying the office worker more than the remote worker. It's cheaper for the employer if they don't have to pay for offices, pay those electric bills, hire the janitorial staff, etc
Companies ask for this shit for obedience, not to reduce costs...
The “pay less for remote workers” thing will only work if all employees follow suit. If Apple decides to cut pay for remote workers, but google doesn’t, you’re going to see a lot more former Apple employees join ranks at Google.
>And companies are already reducing pay based on distance of employees’ homes if they choose to work from home.
Fast food companies might do this (just because they can get away with anything), but companies that dare pull this shit in any sector which favors employees should be shut down immediately...
People are paid for their work, not for their distance from the office. If they want to try to reduce pay for that, how about adding the commute to working hours?
Curious how eeoc protected classes will factor into reducing pay based on location. That seems like wage discrimination. Any employment laws that have been tested around this in court?
Sex/gender: I need my commute time to take care of my children.
Health/medical condition/genetics: commuting increases my blood pressure, triggers anxiety and panic, and reduces my overall mental and physical health and quality of life.
If there is a problem, I think they will be able to get around it breaking pay into two parts.
1. A base amount that is based solely on the job to be done and the level of skill and experience required. The base pay is the same no matter where you live and is the same regardless of whether the work is done remotely or at one of their offices.
2a. If the company requires you to do the work at a particular location, or lets you work at home part of the time but requires you to come to a particular location often enough that you have to live in the general area of that location, they can pay an additional amount based on the cost of living in that area.
2b. If the company imposes geographical constraints on remote employees, such as requiring them to live in specific countries, states, or timezones, they can pay an additional amount based on the cost of living in those countries, states, or timezones.
The key is to only have pay depend on location to the extent that the company constrains the worker's location. That should be very unlikely to run afoul of discrimination law.
> The key is to only have pay depend on location to the extent that the company constrains the worker's location
When the worker has agency to chose remote vs in office, tying pay to physical location seems like coercion though. Doesn't that constrain the worker? "Live in this specific area and come to the office and we will maintain your current pay. Else, you have to take a pay cut for the same role and work output"
Maybe this is a reason why some companies are hesitant to have it both ways and are inclined to force people back to the office. Could they be reducing legal exposure to equal pay lawsuits?
Quite literally. I don’t know the resolution of geographic pay my employer uses (I suspect it’s by metropolitan area, but could easily be down to zip code), but I do have access to the regional differences of my employees (several large offices globally, and many remote employees). Same for my wife’s employer (several large offices, very few fully remote employees).
Wife’s company makes explicit comp adjustments if an employer moved. Mine does not, but it does impact future adjustments.
And companies are already reducing pay based on distance of employees’ homes if they choose to work from home.
I think the market will automatically balance itself out in a few years.