Google staff in the US who opt to WFH may get pay cut by as much as 25%

Google pays different salaries according to employees' location and cost of living.

Jean Chien Tay | August 13, 2021, 05:03 PM

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Google employees in the U.S. who opt to continue work from home (WFH) arrangements could see their pay cut by as much as 25 per cent, reported Reuters.

The tech giant reportedly developed a pay calculator for employees to calculate the potential salary adjustment of working remotely or moving offices, according to the BBC.

The move is supposed to have a greater impact on employees with longer commute, as Google's pay is determined by location, and will differ across different cities and states.

According to information obtained by Reuters, results of the pay calculator show that an employee living in Stamford, Connecticut - an hour from New York City by train - would be paid 15 per cent less if the person opts to WFH.

Meanwhile, a colleague from the same office living in New York City would not get a pay cut if they opt to WFH.

Silicon Valley firms have similar measures

The news broke as Silicon Valley companies like Microsoft, Facebook and Twitter are reportedly testing out similar measures, paying less for employees who are based in locations with lower costs of living, as per the BBC.

However, smaller firms like Reddit and Zillow reportedly pay their employees the same regardless of where they are based.

A Google employee who has a two-hour commute reportedly told Reuters that he would be faced with a 10 per cent pay cut for choosing to WFH full-time. 

The amount is roughly equivalent to his pay raise that came with his recent promotion, he said.

In order to avoid the pay cut, he ultimately decided to commute to work despite the long journey on the road.

Some Google employees allegedly said that there could be pay cuts as high as 25 per cent for people who opt to WFH if they left San Francisco for an almost as expensive area of the state such as Lake Tahoe, which is more than three and a half hours away by car.

According to science magazine Scientific American, studies have shown that long-distance commuters tend to suffer from greater mental issues such as psychosomatic disorders more frequently than people with short commutes to work.

Google's response

A Google spokesperson said the "compensation packages from the company have "always been determined by location", and that they always pay at the top of the local market", as per Reuters.

Google did not address the issue specifically, but a spokesperson said the company will not cut an employee's salary should they choose to WFH, provided they live in the city where the office is located.

Google's decision questioned

Speaking to Reuters, Jake Rosenfeld, a sociology professor at Washington University, expressed concern on the impact of Google's pay structure on the employees and their families. 

"What's clear is that Google doesn't have to do this," Rosenfeld said. He added that Google has been paying its employees at 100 per cent of their wages prior to this, and that there is no reason that the company cannot afford to pay employees who WFH the same. 

Google's parent company, Alphabet Inc. recently reported record highs for their quarterly revenue at about S$69.3 billion, as per Bloomberg

At the time of writing, there is no indication that Google intends to extend such measures outside of the U.S.

Top image via Pawel Czerwinski/Unsplash

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