MOUNTAIN VIEW (KPIX 5) -- Google employees who opt to work remotely full-time may see their salary reduced, if they relocate to less expensive cities away from their home office.
According to a report by Reuters, the tech giant has launched an internal online salary calculator online, dubbed "Work Location Tool", where employees input personal information and possible target cities. The algorithm, using data from US Census Bureau metropolitan statistical areas, calculates salary adjustments accordingly.
In general, if employees reside within the general region of the home office, there is no change in pay.
However, in one example in the report, "an employee living in Stamford, Connecticut - an hour from New York City by train - would be paid 15% less if she worked from home, while a colleague from the same office living in New York City would see no cut from working from home."
Reuters examined screenshots of the online tool, and found "5% and 10% differences in the Seattle, Boston and San Francisco areas." In interviews with employees, they had indicated relocating from San Francisco to Lake Tahoe would trigger a 25% pay cut.
In blog post in May, CEO Sundar Pichai telling employees 20% of the workforce would work remotely, pending management approval, and that "your compensation will be adjusted according to your new location."
Google did not respond to a request for comment from KPIX 5, but released a statement to Reuters: "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."
Peter Leroe-Munoz, General Counsel and Senior Vice President of Tech and Innovation at the Silicon Valley Leadership Group, said there is no one-size-fits-all approach, as companies transition back to in-person work.
"Just as companies have to make their own determinations about what's best for their future, employees are also going to have to look and consider what are their family obligations? What are their concerns with commutes? And what are their financial circumstances?" Leroe-Munoz told KPIX 5. "And ultimately, they're going to have to make the decision that's best for them and for their immediate families."
Facebook and Twitter have recently announced location-based salary reductions for employees who choose to work remotely full-time from more affordable cities.
But Reddit and Zillow have both adopted so-called "location agnostic pay models", essentially maintaining salaries regardless of employees' home address, and using the move as a recruitment advantage.
"I think it expands the range of possibilities, but I think in no means guarantees that a particular company is going to follow another particular company, even within the same industry," said Leroe-Munoz.
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