Google employees who are likely to choose to work from home permanently are likely to face pay cuts as the company is working on a new salary model. The tech giant has reportedly rolled out a new internal calculator to explain potential pay cuts, as much as 25 per cent, to employees who choose to work remotely.
According to a Reuters report, the screenshots of an internally circulated message so far shows that it might penalize the suburban staffers, with long commuters hit harder.
Screenshots of Google’s internal salary calculator seen by Reuters show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15 per cent less if she worked from home, while a colleague from the same office living in New York City would see no cut from working from home. Screenshots showed 5 per cent and 10 per cent differences in the Seattle, Boston and San Francisco areas.
“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,” a Google spokesperson told Reuters, adding that pay will differ from city to city and state to state.
Google is not the first company to experiment with pay cuts for employees choosing to work remotely. It is something Silicon Valley companies have been experimenting over the past few months, with Facebook and Twitter cutting pay for remote employees who move to less expensive areas. Smaller companies, including Reddit and Zillow, have shifted to location-agnostic pay models, citing advantages when it comes to hiring, retention and diversity.