Should Staff Who Work From Home Be Paid Less?

Technology giant Google have developed a pay calculator that lets employees see the effects of working remotely, or moving office. The results of which have left some remote employees disgruntled, as Google employees based in the same office before the pandemic could see different changes in pay if they switch to working from home permanently. However are they justified in this decision, and should employees who work remotely get paid less?


Following the Covid-19 pandemic, it's fair to say that the way we work for many individuals has changed drastically. Some people who have spent decades working 9-5 in an office are now switching to fully remote, flexible working, while others are adopting a hybrid system that allows for flexibility between the old and new regimes. What is apparent, is that employees in many businesses have proved that no matter where they're working, they're able to produce the results, which has led to many organisations cutting rising office costs in favour of allowing employees to work from home.


Although of course personal preferences dictate that some people won't welcome this, for the vast majority, the time saved commuting, the added time with loved ones, and the flexibility to fit work around their personal life has been widely welcomed. However, seemingly there is an end to these benefits, as companies start to experiment with employee pay structures. Big tech companies including Microsoft, Facebook, and Twitter have offered less pay for employees based in locations where it is more inexpensive to live, however this has not been adopted by all. Smaller firms such as as Reddit and Zillow have said they will pay the same no matter where employees are based, saying that this improves diversity.


In the UK, it's a fundamental part of employment law that employers cannot alter aspects of contracts such as rates of pay without the consent of employees, or without terminating those contracts and renegotiating them. Emma Bartlett, a partner with employment lawyers CM Murray said that 'from an employee perspective, it would be demoralising to be paid less for doing the same job, whilst from a business perspective it would have the potential to create two tiers of employment, with some employees expected to be in the office, and some not. Therefore, if people people stayed home working for childcare reasons, and women continue to take the main responsibility for childcare, then this could have the effect of widening the gender pay gap'. These sentiments were echoed by Jake Rosenfeld, a sociology professor at Washington University in St. Louis, who said 'Google's move raises alarms about who will feel the impact most acutely, including families. Remember, Google have paid these workers at 100% of their prior wage, 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. Simply put, Google doesn't have to do this'.


The Chartered Institute of Personnel and Development (CIPD), which represents human resource professionals in the UK, said it is always 'the safest option' for firms to seek express written agreement from employees before changing the level of their pay. In their guidance to employers, CIPD stated that imposing a pay cut is a 'high-risk' approach, since workers can bring claims for breach of contract or even constructive unfair dismissal. This is even before considering how employees could be treated differently in terms of training, promotion, or access to clients. Therefore, whilst this is a bold step by Google, it's anticipated that it is not something that will be replicated by alternate firms, both across the US and closer to home, in the UK.


For us at MiGrowth, as we've expanded in the passing year, we've taken on a number of employees who work in either a fully remote, partially remote, or hybrid capacity. In doing this we've offered a competitive salary which is reflective of the investment and faith we have in the success of our team, knowing full well that to get the maximum output from any employee, they have to be provided with the right environment, resources and support in order to thrive. Therefore, for us, paying employees dependent on where they work is not something that we can relate to, as we're not necessarily concerned with where our team operate, as long as everybody is pulling in the right direction to make our business a success. From our experience, the better you accommodate the needs of your employees, the more they're willing to dig in and deliver for you when you need it most.