Google ‘pay calculator’ to reduce pay of staff who do not return to office

Google employees in the US who decide to work from home full-time in the future could face sizeable pay cuts.

Tech giant and innovative employer Google has developed a pay calculator that determines how much its employees should be paid depending on where they work from.

The calculator shows employees how their salary would be impacted by not returning to the workplace and instead moving to a town or city cheaper to live in, and working from there remotely.

Typically, Silicon Valley, where many tech giants are based, is a very expensive area in which to live, with long commutes to and from work being part of many employees’ daily routine.

In the Covid-19 upheaval, employees not just in the US but around the world have become used to working from home and many would prefer that to continue rather than to return to the drudgery of “9 to 5” in the city.

And if there is no need to go into the office, then there is no real need to spend a lot of money on housing within commuting distance of it. For many employees, cheaper and greener towns and smaller cities beckon.

This could, however, result in Google calculator reducing their salary by anything up to 25%.

“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 spokesman told Reuters.

Worldwide, Google has more than 135,000 employees, and CEO Sundar Pichai said in April that the company expected 20% of its workforce to work remotely by the end of 2021.

If Google calculates salaries in other countries based on the same formula used in the US, then staff around the world will suffer pay cuts if they opt to work from home, wherever that may be.

And it’s not just Google gearing up for fewer employees choosing to return to the office.

Twitter and Facebook have already imposed salary cuts on employees who opt to continue working from home or who move to less expensive and potentially less polluted areas to live and raise their families.

Some financial companies on Wall Street are opting to insist on employees returning to the office.

“If you can go into a restaurant in New York City, you can come into the office,” James Gorman, chief executive of Morgan Stanley told Reuters. “If you want to get paid New York rates, you work in New York. None of this, ‘I’m in Colorado and work in New York and am getting paid like I’m sitting in New York City.’”

On the other hand, most tech companies have not adjusted pay for remote workers. Yet.

But Google employees have been warned that if they move away from the company’s offices to greener pastures, they are likely to face substantial pay cuts.