Employees who decide to work remotely and move to less expensive areas of the country may be subject to a pay cut.
Google employees who decide to work from home full-time could face pay cuts depending on where they live.
The Alphabet $(GOOGL)$ tech giant has developed an internal pay calculator, which Reuters was able to get a look at, that determines how Google employees would be paid depending on where they work from. The calculator allows employees to learn how their decision to work remotely could impact their salary based on where they live and/or where they may move.
And employees who choose to work from home permanently instead of going back into the company's office could receive lower salaries. Such pay cuts would namely occur if the employee decided to remain remote and move to a less expensive area, away from the office whey they would work in-person.
For example, an employee who normally works at Google's New York City office would not be penalized if they permanently worked from home in the Big Apple -- but they would be paid less if they moved to North Carolina or Virginia and telecommuted.
But in some cases, workers who already live far away from a Google office could also see a pay cut if they decided to start working from home full-time rather than continuing to make the long commute. Reuters viewed screenshots of Google's salary calculator, and reported that a worker living in Stamford, Conn. -- which is an hour from NYC by train -- would be paid 15% less if they worked from home . Yet a colleague from the same office who lived in the city wouldn't receive the same pay cut if they switched to remote work. Other screenshots also showed 5% and 10% differences between remote and in-person workers in the Seattle, Boston and San Francisco areas. In fact, employees could see as much as a 25% decrease in salary, depending on where they decide to live.
Google was not immediately available for comment. "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 told Reuters.
Google has more than 135,000 employees worldwide, and CEO Sundar Pichai said in April that the company expected 20% of its workforce to be remote by this fall . It is not clear at this time whether the potential pay cut for employees seen in the internal calculator is for U.S.-based workers or the company's global workforce.
Whether remote workers should see lower salaries has been a hot-button topic many companies have contended with since the COVID-19 pandemic has forced many employees to work from home. Twitter and Facebook have cut salaries for employees who are working from home thatmoved to less expensive areas areas of the country.
Morgan Stanley $(MS)$'s chief executive James Gorman recently said that he wants workers to return to the office, or face salary cuts .
"If you can go into a restaurant in New York City, you can come into the office," he said. "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, tech companies including Reddit and Zillow ZG have not adjusted pay for remote workers.
Deciding when and how to bring workers back into the office has also become complicated by new spikes in COVID-19 cases as a result of the contagious delta variant. Twitter recently shut down its newly reopened San Francisco and New York offices due to a COVID spike. And companies including Google, Walt Disney and Uber have told their employees toget vaccinated against COVID-19 prior to returning to in-person work.