72°F
weather icon Clear

Large companies may cut pay for remote workers

Updated April 6, 2021 - 7:22 pm

Large companies may cut pay for remote workers

With more Americans working remotely and relocating to areas with cheaper costs of living, many large companies are considering cutting salaries.

See: The most and least expensive states to work from home

Find: More companies planning to reopen offices, end work from home

Many large companies have announced indefinite or long-term remote work policies in the wake of the 2020 pandemic. Without a work location tying them down, many Americans have already or are considering moving closer to family or finding housing in more affordable parts of the country.

Living and working in coastal U.S. cities is much more expensive than the country’s average. In fact, living in the Bay area is as much as 32% above the U.S. average, according to Bloomberg. It’s not surprising, then, that many Americans with the ability to work remotely long-term would look for more affordable areas to live.

However, most American companies that did not offer remote work pre-pandemic also did not have a policy in place regarding salaries and locations for remote workers. Now, many major companies are announcing pay cuts may be inevitable for remote workers who move to different parts of the country.

See: 45% of Americans have moved during the pandemic, new study finds

Find: JPMorgan Chase and S&P Global Flee NYC, Turn Financial District Into Ghost Town

According to CNBC, Facebook is one of the first to take a stance on remote salaries, with CEO Mark Zuckerberg stating, “We’ll adjust salary to your location at that point” for taxes and accounting purposes. “There’ll be severe ramifications for people who are not honest about this,” Zuckerberg said.

Stripe Inc. is also implementing a policy for remote workers. It is offering $20,000 in relocation assistance to employees moving from the Bay area or New York, while also cutting the employees’ salaries by as much as 10%, according to Bloomberg. “Slack has also announced more detailed salary bands by location,” Bloomberg reported. VMware and Twitter are also reducing pay for employees who relocate from the Bay area.

See: How the work-from-home revolution is changing real estate

Other major companies are expected to follow suit, which has remote workers carefully considering their next moves.

“Covid-19 is a gamechanger for the workplace,” David Lewis, CEO of HR consultancy OperationsInc, told CNBC. “The ability to work from home is going to be … a huge competitive issue, and compensation is part of that.”

More from GOBankingRates

20 home renovations that will hurt your home’s value

What income level is considered middle class in your state?

20 ways to pay less at Costco

This article originally appeared on GOBankingRates.com: Major companies may cut salaries for remote workers

Don't miss the big stories. Like us on Facebook.
THE LATEST
Las Vegas Market takes critical steps forward

The April 11-15 Las Vegas Market was originally slated for January, but due to travel restrictions as a result of the COVID-19 pandemic, it was pushed to spring. Under the “Together Safely” program, management has instituted protocols that align with state and federal best practices to minimize COVID-19 spread.

Allergy season is in full swing in Las Vegas

Pollen alert. That’s what we see on our advisories in the early spring regarding pollen from mulberry, ash and junipers. The alert continues through the pollen season as we go from mulberry to pine to olive.

Winter freeze can affect citrus fruit production

It only takes a 1- or 2-degree difference in temperature between having a tree loaded with fruit versus having a tree with not much fruit. If this temperature difference comes along two or three times during the spring when it’s trying to flower, then there is no fruit produced that year.

Brazil coronavirus variant found in Nevada

At least one of the three confirmed cases of the Brazilian variant — thought to spread more easily — occurred in Clark County, the state’s lab director said.