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Google's pay cuts for remote workers deemed 'unfair'

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Google employees in the US who want to permanently work from home post-pandemic may have their salary reduced.

The Silicon Valley-based tech company has developed a pay calculator that lets employees see the difference in money spent when working remotely or moving offices.

The introduction of the calculator has meant some remote employees, especially those with a long commute, could have their pay cut. 

HR professionals in the UK have since criticised the company, arguing this kind of pay cut diminishes the work and commitment of employees.

Caroline Butler, head of HR strategy at Hertfordshire County Council, said even pre-pandemic employers were changing attitudes towards where employees work. 

She told HR magazine: “There will always be roles where people have to be at a fixed location or with a fixed client to deliver a service but in many cases with advances in technology, this isn’t the case.

“The pay a role receives should be the right pay for the work that role is delivering.”

Butler said location or work can sometimes boost an area or role which is hard to recruit, but should not be impacted by a commute.

A new study by management software company FactorialHR has estimated that the average annual UK salary would be £6,000 higher if it increased at the same rate as rail fares have in the last 10 years.

Rail fares have increased by 44% since 2010, compared to the 18% increase in the median weekly wage between 2010 and 2020.

Jonathan Richards, CEO at Breathe, said it’s a shame remote working has been perceived in such a negative light that it will potentially inform policies such as salary reductions for those choosing to work from home.

He told HR magazine: “The figures outlined in the study displaying the correlation between wages and rail fairs are shocking and show how the costs just don’t add up and the argument falls flat.

“It would be particularly unfair in the current economic climate to reduce pay based on remote working preference, and this approach relies on coercion to get people back into the office rather than reasonable evidence.”

Richards said talk of pay reductions for those working from home is surprising considering the numerous benefits that accompany remote and hybrid working models.

“They have been shown to instil employee work life balance whilst enhancing business output.

“Working flexibly can boost productivity and improve overall wellbeing for some workers, so this draconian step change could end up impacting long term staff retention.

“Employees aren’t machines, and it’s important to promote a healthy work life balance,” he said.

Daisy Roach, head of HR at Better Foods, said employees who choose to work from home should not be penalised with a reduction in pay.

Speaking to HR magazine, she said: “Although they may indeed have less costs in terms of commuting, there are other additional costs to consider such as household bills.

“It is also worth remembering that most employers offer benefits which are on-site and less accessible or relevant for those working from home, such as onsite food that is either free or subsidised and free tea or coffee.

“For companies such as Google, these benefits can be as extensive as onsite childcare, gyms or even free or subsidised bars.”

Roach said losing access to these benefits should more than make-up for the additional pay which is able to be saved by employees.

“For contractual benefits which are missed out on, there is also the consideration of whether those employees should actually be paid more so as not to fall foul of contractual obligations,” she added.