16 votes

Pay cut: Google employees who work from home could lose money

35 comments

  1. [12]
    Icarus
    Link
    Speaking as someone who works within HR and has a graduate degree in HR, but doesn't work in Compensation, I think this is awful. In my mind, an hour of labor done in Alabama or Mississippi that...

    Speaking as someone who works within HR and has a graduate degree in HR, but doesn't work in Compensation, I think this is awful. In my mind, an hour of labor done in Alabama or Mississippi that produces the same quantifiable value as someone working in San Francisco (or other metro area) that is fulfilling the same business need, should be paid the same. This just seems to me a more elaborate way of saying "We are going to discriminate based on zip code for salary." Which coincidentally is a good way to cause disparate impact. It's fine if you want to pay people a bonus to come into the office, but all remote workers should receive the same pay from the same salary range based on traditional factors that determine pay in-office (experience, education, demand, etc.). To me, this seems like saying people who live in low COL places are inherently worth less than people in high COL places. And to think of the socioeconomic consequences of these policies is that the less money going to these lower COL people means lower standard of living for all the people who live within that local economy. The more money we pump into poorer communities that are impoverished, the more they can receive revenue to build their schools and infrastructure.

    21 votes
    1. skybrian
      Link Parent
      Paying more if you come into the office is equivalent to paying less if you don't. Though, I suppose the optics are different. Also, what you're paid isn't about what you're worth as a human...

      Paying more if you come into the office is equivalent to paying less if you don't. Though, I suppose the optics are different.

      Also, what you're paid isn't about what you're worth as a human being. Travel generally does result in more compensation (or at least expenses paid), which isn't about who you are but what they want you to do.

      Showing up at a particular place and time is worth something. In theory it would be much like with overtime. If companies have to pay for you to come in, they're discouraged from using it more than necessary.

      In practice, that's not how it works for salaried employees, and places like Google aren't nearly as careful as they could be about not wasting employee time. The people wasting your time don't see the cost, and the people making the rules are doing it in bulk, not considering the cost/benefit for individual situations.

      10 votes
    2. [3]
      vord
      Link Parent
      Having lived in both, essentially yes. Exact same job will pay 2x or more living in a metro area. Hence why so many people end up commuting deep into a city... because they don't want city living,...

      To me, this seems like saying people who live in low COL places are inherently worth less than people in high COL places.

      Having lived in both, essentially yes. Exact same job will pay 2x or more living in a metro area. Hence why so many people end up commuting deep into a city... because they don't want city living, just city pay.

      It's that 'what the market will bear' mentality, where 'bear' is basically just universal function of cost of living.

      Raising minimum wage tremendously (I think we're closer to needing 25 than 15 at this point) is probably the best starting point to remedy this.

      9 votes
      1. [2]
        Icarus
        Link Parent
        Oh, I understand the sentiment. I was offered a job in rural America at $14 an hour which I turned down to do the same job that I do now starting at $65,000 a year. I knew my value/worth was a lot...

        Oh, I understand the sentiment. I was offered a job in rural America at $14 an hour which I turned down to do the same job that I do now starting at $65,000 a year. I knew my value/worth was a lot more and moved to the SF Bay area to make that money. I still believe to this day that the job that I am doing now, working 1 mile from my Corporate HQ yet not going to the office, is worth the same value as if I had been doing it this whole time from the area that offered me $14 an hour.

        But I will say I probably have a more radical take on HR compared to my peers, especially when looking at compensation practices. It often feels like to me the whole system is rigged against the regular workers with the lack of information/transparency they have into what determined their pay or how the discussions surrounding their performance cycle factored into their yearly raise.

        8 votes
        1. vord
          Link Parent
          I danced around that lack of transparency in another reply, but that lack of transparancy facilitates discrimination of all types.

          I danced around that lack of transparency in another reply, but that lack of transparancy facilitates discrimination of all types.

          6 votes
    3. teaearlgraycold
      Link Parent
      The easiest way to get them to stop this would be to show how in the end it will create a racial bias in salaries for remote workers.

      The easiest way to get them to stop this would be to show how in the end it will create a racial bias in salaries for remote workers.

      7 votes
    4. [5]
      tvl
      Link Parent
      Hiring someone in a place like the Bay Area is more expensive because their rent will be higher, not because they are "worth more as a person." It's housing policy, mainly.

      To me, this seems like saying people who live in low COL places are inherently worth less than people in high COL places.

      Hiring someone in a place like the Bay Area is more expensive because their rent will be higher, not because they are "worth more as a person." It's housing policy, mainly.

      5 votes
      1. AugustusFerdinand
        Link Parent
        Thing is, someone in the Bay Area isn't doing more and/or higher quality work because they live in the Bay area. Cost of living in the Bay Area is 75% higher than the cost of living in say...

        Thing is, someone in the Bay Area isn't doing more and/or higher quality work because they live in the Bay area. Cost of living in the Bay Area is 75% higher than the cost of living in say Cleveland. If someone in Cleveland told their employer they want a 75% raise, they'd be laughed out of the office, but magically if someone lived in the Bay Area or if they moved from Cleveland to the Bay Area they'd be able to get that 75% raise to cover their cost of living.

        The fact is if a company is willing to pay a higher wage if someone lives in a high COL area, that same amount should be available to someone that lives in a low COL area. Pay should be location agnostic and purely based on things like experience and work performed.

        15 votes
      2. Icarus
        (edited )
        Link Parent
        I understand the argument and the sentiment as someone who moved from rural to the Bay area. However, my point remains that the time that people spend doing work for a company, solving their...

        I understand the argument and the sentiment as someone who moved from rural to the Bay area. However, my point remains that the time that people spend doing work for a company, solving their problems, generating shareholder value, should end up being compensated the same irrespective of the lifestyle choices they make outside of work. As @userexec says, its a negotiation and you can bring whatever you want to the bargaining table as reasoning for higher pay. I could bring the fact that I have an exorbitant student loan debt or that I have 3 kids to support or that I have an obsessive drive to purchase rare Yu-Gi-Oh cards. Some arguments will resonate more than others with a hiring manager but regardless, you are only being compensated for the time that you dedicate to working on their problems. If I decided to move out of my expensive apartment to a shit apartment with 3 roommates to save money, the company isn't going to cut my salary after the fact. I have derive to my own Quality-of-Life from the compensation that I receive for the time that I have given.

        To add, housing is only one aspect of COL. If you live in a rural area, many things end up being more expensive that cancel out the housing cost gains (as an example). I can attest for myself that groceries and transportation in rural life are more expensive. And things that are fixed costs that won't really change too much between urban and rural, like vacations, are still the same price between the two.

        Again, these are all lifestyle choices that are choices to be made outside of the job that I was hired to do. I think it is a fair assessment to say that an hour of time that I spend doing a task is worth the same to the company if it is done in a cubicle or an office, in urban or rural.

        And finally, I really believe that people who still choose to live in the city should celebrate and advocate their newly remote coworkers be compensated the same. Not only is it a stand for solidarity but also because it will ultimately help drive their housing costs down if a whole bunch of people who don't want to live in their neighborhood suddenly don't have to.

        7 votes
      3. [2]
        Thra11
        Link Parent
        But this is backwards. Rent is higher in the bay area because big companies are willing to pay extra to people who live near their offices. If you remove or lessen the incentive for employees to...

        Hiring someone in a place like the Bay Area is more expensive because their rent will be higher, not because they are "worth more as a person." It's housing policy, mainly.

        But this is backwards. Rent is higher in the bay area because big companies are willing to pay extra to people who live near their offices. If you remove or lessen the incentive for employees to live in the Bay Area, then the housing prices will drop, and it'll probably go a long way towards solving the extreme housing shortage and long commutes that plague the area.

        3 votes
        1. AugustusFerdinand
          Link Parent
          Completely agree. Make pay location agnostic, base it on national major city average COL + 25-50% and let people work from where they want to live. There's zero excuse for a 1 bedroom apartment in...

          Completely agree. Make pay location agnostic, base it on national major city average COL + 25-50% and let people work from where they want to live. There's zero excuse for a 1 bedroom apartment in SF to average $2,600 per month when the national average is closer to $900. The worker in Cleveland gets a nice raise, the worker in SF looks around their small apartment and wonders what they could do each month with an extra $1,700.

          And talk about the equality that it'll bring! Suddenly all these remote-able jobs are paid location agnostic. There's no reason for everyone to need to live in SF. People move, their quality of life improves as their disposable income does, and the COL in the area collapses to something closer to reasonable. The service people that work the restaurants, coffee shops, cleaners, and so on can afford to live near where they work. People that could previously only afford an apartment, perhaps with a roommate, can now afford a house. The racial makeup of SF stops being almost exclusively white and Asian.

          Of course it'll be seen as the end of the world by people that own property in the area as their overpriced $1M house is now worth a more realistic 40-60% of that. It'll be glorious to watch.

          4 votes
    5. EgoEimi
      Link Parent
      In the end, it's all a matter of leverage, scarcity, and monopoly power, right? It's difficult to evaluate worth but easy to evaluate scarcity: for scarcity, you simply withhold something and see...

      In the end, it's all a matter of leverage, scarcity, and monopoly power, right? It's difficult to evaluate worth but easy to evaluate scarcity: for scarcity, you simply withhold something and see how badly someone tries to replace said withheld thing. As an extreme example, water is necessary for life and whatnot; it has infinite worth yet is virtually free.

      But I understand and agree your point about the social benefits of pumping money into lower COL communities. I see that income and COL have a feedback loop: COL -> income -> COL -> income and so on, as high COL areas suck up materials, resources, and talent, conversely leaving low COL areas languishing.

      In the past few decades, the internet economy, globalization, and global capital have spurred a kind of... Urban Darwinism, an urban manifestation of our new winners-take-all world.

      3 votes
  2. userexec
    Link
    Sounds like a good way to lose talent to me. I offer specific expertise and experience, and I expect to be paid what it's worth to the company, not some funky "what it's worth scaled to the exact...

    Sounds like a good way to lose talent to me. I offer specific expertise and experience, and I expect to be paid what it's worth to the company, not some funky "what it's worth scaled to the exact GPS coordinates of where my laptop happens to be sitting when I type for them." My work is not negotiable on some gameable surge pricing scheme. This just feels like a stupid employer power move to try to cut labor costs while relying on their employees' desperation to keep a job. Bold move trying that on folks with a Google-grade resume--have fun with that.

    15 votes
  3. eladnarra
    Link
    This approach to compensation for remote work also affects disabled employees in particular. Remote work is often a helpful accommodation for disabled folks (even though employers weren't nearly...

    This approach to compensation for remote work also affects disabled employees in particular. Remote work is often a helpful accommodation for disabled folks (even though employers weren't nearly as willing to offer it before the pandemic, and are becoming less willing again... which is another issue).

    If remote workers are paid less according to where they live, and some disabled people work remotely due to their disability (especially during a pandemic), that seems like disparate impact, kind of like @Icarus was describing. Disabled people also sometimes have less ability to move to another place for work - they might need to stay near family for a support network or near a particular medical system where they've established doctors and specialists, for example. So they may live in "lower cost of living" areas. Finally, disabled folks often experience what's called the "crip tax" - extra (yet essential) costs of living, ranging from meds and medical supplies not covered by insurance to cleaning services to grocery delivery to in-home care.

    I work remotely because it means I can schedule my work around times I'm feeling better. Plus I don't waste my energy on a commute and get to work already tired. I already make half of what other people in a similar position would (since I work part time) - a pay cut based on my location would really suck, haha.

    13 votes
  4. JXM
    Link
    I suppose it is good they're offering a tool for employees to see what the change in compensation would be but they're doing the same job they were doing before, so they should be paid the same....

    I suppose it is good they're offering a tool for employees to see what the change in compensation would be but they're doing the same job they were doing before, so they should be paid the same.

    Especially if they are still within the same office they were before because they are still in the same area in terms of cost of living.

    Plus, I'm sure they will still be required to report to the office for certain things. Will they be paid an "I came into the office today" bonus when they're required to come in?

    9 votes
  5. [4]
    knocklessmonster
    Link
    It's a classic trick: Take advantage of and twist a vaguely stated, but widely understood and accepted premise: Pay scales by office location. Los Angeles pays more than Albuquerque. "We pay based...

    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

    It's a classic trick: Take advantage of and twist a vaguely stated, but widely understood and accepted premise: Pay scales by office location. Los Angeles pays more than Albuquerque. "We pay based on location" generally implied "We pay more in LA than Albuquerque," not "People who do work at the LA office earn more if they live in LA."

    The issue is if I work in the LA office, but live in Riverside (50 miles SE), I should be paid the same as somebody working in LA based on the relative value of my work, whether I drive there or telecommute. It seems like a lot of extra work to screw over workers and save a few bucks.

    9 votes
    1. MetArtScroll
      Link Parent
      Sooner or later they will realise that “the local market” for remote work is… basically Planet Earth. (OK, I am exaggerating, but any place with an adequate standard of living, which includes an...

      and we always pay at the top of the local market based on where an employee works from

      Sooner or later they will realise that “the local market” for remote work is… basically Planet Earth.

      (OK, I am exaggerating, but any place with an adequate standard of living, which includes an adequate Internet connection, will do, and there are such places all over the world.)

      5 votes
    2. [2]
      skybrian
      Link Parent
      It sounds like their system is based on office location. If your office is at home, well… I’m doubtful that people working from home should be paid based on office location, but it’s consistent.

      It sounds like their system is based on office location. If your office is at home, well…

      I’m doubtful that people working from home should be paid based on office location, but it’s consistent.

      2 votes
      1. knocklessmonster
        Link Parent
        To me, "office" reads as "where do you report?" I guess the definition is going to shift if we all start working from home, and it frankly may be for the better.

        To me, "office" reads as "where do you report?" I guess the definition is going to shift if we all start working from home, and it frankly may be for the better.

        3 votes
  6. [3]
    stu2b50
    Link
    Seems reasonable. Salaries are based on not only what you produce on a marginal basis but also the wage-quantity curve. Canadian Googlers are paid sometimes less than half their American...

    Seems reasonable. Salaries are based on not only what you produce on a marginal basis but also the wage-quantity curve. Canadian Googlers are paid sometimes less than half their American counterparts.

    In terms of fairness, the prior employment contract was based on the assumption that you would be in the location of whatever office, so I don’t see any rug pulling in this.

    7 votes
    1. [2]
      tvl
      Link Parent
      This is true, in my opinion. To some degree, the high salaries of Bay Area workers are subsidizing the housing policy of the area. Most of that high-salary money goes directly to landlords. "Cost...

      This is true, in my opinion. To some degree, the high salaries of Bay Area workers are subsidizing the housing policy of the area. Most of that high-salary money goes directly to landlords. "Cost of living" is a clear and obvious part of any salary negotiation. I would not expect companies to continue to pay for a higher cost of living even when an employee chooses to live in a much cheaper location.

      I imagine many Bay Area salaries were negotiated by employees along the lines of "it's expensive to work here, so you need to pay me more." Can't have it both ways.

      3 votes
      1. vord
        (edited )
        Link Parent
        I would. Workers already had the ability to choose higher/lower cost of living based on their wage and commute, they just have a wider selection now. If Employee A and B are putting out X work,...

        I would not expect companies to continue to pay for a higher cost of living even when an employee chooses to live in a much cheaper location.

        I would. Workers already had the ability to choose higher/lower cost of living based on their wage and commute, they just have a wider selection now. If Employee A and B are putting out X work, one remote and one onsite, then paying differently based on that is how you end up with discriminatory pay problems in the first place. Just now it's purely on home location and not just the typical age/race/sex.

        So by allowing this additional factor for wage adjustment, you've added another variable that murkies discriminatory pay.

        If Google wants to cut worker pay, move HQ to rural Idaho and do it across the board.

        Further, I'd wager many Googler's didn't care one bit about the Bay area, merely that they needed to be able to commute to their dream job.

        9 votes
  7. [6]
    rkcr
    Link
    I've been working remotely for over a decade. As such I've seen the debate over cost location-based salary over and over again. In the end, I've determined that it's all just a negotiation... the...

    I've been working remotely for over a decade. As such I've seen the debate over cost location-based salary over and over again.

    In the end, I've determined that it's all just a negotiation... the company wants to pay you less, you want more. If they won't pay you enough, work somewhere else. If the company continually loses employees due to low pay, they'll start paying more. There is no morally right or wrong way to do it, in the same way that there is no moral price for, say, a house.

    6 votes
    1. [5]
      JXM
      Link Parent
      The problem comes when all of the big tech companies band together to all make it policy such that workers don't have an option any more.

      The problem comes when all of the big tech companies band together to all make it policy such that workers don't have an option any more.

      5 votes
      1. [4]
        rkcr
        Link Parent
        You're framing it as if location-based salary is some new idea that corporations have cooked up to screw the common man. In fact, right now it is is the norm, and very few companies pay the same...

        You're framing it as if location-based salary is some new idea that corporations have cooked up to screw the common man. In fact, right now it is is the norm, and very few companies pay the same regardless of location.

        5 votes
        1. [3]
          JXM
          Link Parent
          I wasn't trying to frame it that way. But the scale is something new. There's a lot of companies that are allowing way more people to work from home.

          I wasn't trying to frame it that way. But the scale is something new. There's a lot of companies that are allowing way more people to work from home.

          7 votes
          1. [2]
            rkcr
            Link Parent
            Sorry, you're right, I shouldn't have phrased my point that way. That will teach me to post when also trying to wrestle a toddler. :) I think the scale will actually be beneficial overall. I've...

            Sorry, you're right, I shouldn't have phrased my point that way. That will teach me to post when also trying to wrestle a toddler. :)

            I think the scale will actually be beneficial overall. I've worked in both situations (flat-rate vs. location-based), and I always made more money at big tech companies with location-based pay because their baseline is just so high (e.g., 80% of $200k is much better than 100% of $100k). Having more large tech companies with higher baseline pay will force local tech companies to keep up, raising overall wages. At least, that's how I think things will go, for the short term.

            3 votes
            1. JXM
              Link Parent
              You could be totally right. I'm just concerned that it might go the other way. We've seen the FAANG companies work together to keep workers down before (remember the anti-poaching agreement from a...

              You could be totally right. I'm just concerned that it might go the other way. We've seen the FAANG companies work together to keep workers down before (remember the anti-poaching agreement from a decade ago?).

              5 votes
  8. AugustusFerdinand
    Link

    Google employees based in the same office before the pandemic could see different changes in pay if they switch to working from home permanently, with long commuters hit harder, according to a company pay calculator seen by Reuters.

    It is an experiment taking place across Silicon Valley, which often sets trends for other large employers.

    Alphabet Inc's (GOOGL.O) 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.

    "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 said, adding that pay will differ from city to city and state to state.

    2 votes
  9. [6]
    MetArtScroll
    Link
    I understand that for those who come to the office the pay should take the local CoL into account. I also understand that for those who work remotely the pay should take into account their...

    I understand that for those who come to the office the pay should take the local CoL into account.

    I also understand that for those who work remotely the pay should take into account their availability to come to the office if necessary—e.g., for the Silicon Valley, there is a difference between someone who works remotely from Oakland and someone who works remotely from Auckland—and there is the opposite difference for an Auckland-based firm.

    However, if they are going to discriminate between home office employees based on their local CoL, then I have to ask:

    Are you paying your employees or their landlords?

    For example, ceteris paribus, IMHO, a Silicon Valley employee working remotely from Sacramento should not get less than another Silicon Valley employee working remotely from New York City; actually, the former should get more for being more readily available physically.

    2 votes
    1. skybrian
      Link Parent
      This isn’t how they think about it. For example, Google has offices all over the world, and the idea is that you work on a team at an office where that team is located. The SF bay area has more...

      This isn’t how they think about it. For example, Google has offices all over the world, and the idea is that you work on a team at an office where that team is located. The SF bay area has more teams than most, but other projects are based elsewhere.

      Unfortunately, all the big engineering offices are in major cities. (There are some small offices from acquisitions.)

      4 votes
    2. [4]
      AugustusFerdinand
      Link Parent
      Why?

      actually, the former should get more for being more readily available physically.

      Why?

      1 vote
      1. [3]
        MetArtScroll
        Link Parent
        To clarify, by ceteris paribus I assumed that the only difference between the two is the place of residence with both places being in the US (note that I clearly state that both work for an office...

        To clarify, by ceteris paribus I assumed that the only difference between the two is the place of residence with both places being in the US (note that I clearly state that both work for an office in the Silicon Valley). Then, in most cases, a better ability to physically arrive to the office is usually an advantage. If this does not matter at all, then IMHO there should be no difference in pay (again, ceteris paribus, I do not account for cases like someone working remotely from Iran, which is under sanctions).

        1 vote
        1. [2]
          AugustusFerdinand
          Link Parent
          If it was a hardware space/position I'd agree, but being Silicon Valley it's much more likely to be a software space/position and I'm not sure I see how keyboard presses at the office are worth...

          Then, in most cases, a better ability to physically arrive to the office is usually an advantage.

          If it was a hardware space/position I'd agree, but being Silicon Valley it's much more likely to be a software space/position and I'm not sure I see how keyboard presses at the office are worth more than keyboard presses at home.

          7 votes
          1. teaearlgraycold
            Link Parent
            A couple things come to mind: Availability for in-person interviews. A lot of your job as a software engineer involves interviewing and later onboarding. We're social animals and want to see...

            A couple things come to mind:

            1. Availability for in-person interviews. A lot of your job as a software engineer involves interviewing and later onboarding. We're social animals and want to see people face-to-face during the early stages of a new job.

            2. Architectural discussions that require a lot of whiteboarding. A lot of jobs won't need this at all. Many systems don't need much thought architecturally. But I'd hate to have to use some kind of Zoom whiteboard when this is necessary.

            5 votes