August 11, 2021
Data from a leaked internal salary calculator at Alphabet’s Google reveals that employees who decide to work from home indefinitely face pay cuts of up to 25%, according to Reuters.
The news comes as a surprise, as the tech giant has been outwardly supportive of working from home during the pandemic – and just last week approved nearly 10,000 employee requests to do so. Google also pushed back its target date for employees to return to the office from September to October 18 in light of the Delta variant, according to Business Insider.
Alphabet Inc’s Google stands out in offering 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.
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% by working from home full-time, according estimates by the company’s Work Location Tool launched in June.
The employee was considering remote work 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. –Reuters
“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,” one spokesperson told Reuters, adding that pay differs from state to state.
Washington University sociology professor Jake Rosenfeld, who researches salaries, said that Google’s pay structure raises alarms about who’s going to feel the pay cuts the most.
“What’s clear is that Google doesn’t have to do this,” he said, adding “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.”
According to the internal salary calculator, an employee living in Stamford, Connecticut would be paid 15% less if they work from home vs. commuting one hour by train into New York City. Another colleague who actually lives in NYC would see no pay cut. According to screenshots, there were 5-10% differences for workers in the Seattle, Boston and San Francisco areas.
Employees who leave the San Francisco office for an almost as expensive area such as Lake Tahoe would face cuts up to 25%.
The calculator states it uses U.S. Census Bureau metropolitan statistical areas, or CBSAs. Stamford, Connecticut, for example, is not in New York City’s CBSA, even though many people who live there work in New York.
A Google spokesperson said the company will not change an employee’s salary based on them going from office work to being fully remote in the city where the office is located. Employees working in the New York City office will be paid the same as those working remotely from another New York City location, for example, according to the spokesperson. -Reuters
Facebook and Twitter have adopted a similar stance, while other companies such as Reddit and Zillow have shifted to location-agnostic pay models.