Remote Workers Now Being Forced To Take Pay Cuts?

A concerning new trend is taking shape, companies are starting to slash the salaries of their remote workers.

By Kristi Eckert | Published

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The pandemic served to usher in a new age of work. It facilitated the exponential rise of remote work. With society returning to some semblance of normalcy, employees are still fighting to stay remote. Even as employers desperately try to lure their workers back to offices. Now, perhaps in an effort to make working remotely look less attractive, some companies are choosing to slash the salaries of their remote workers. 

The Los Angeles Times detailed that with so many workers citing that they love the savings that remote work brings, some employers are looking to exploit that by using it as reasoning to pay their employees less money. This is something that has already taken hold outside the United States. For instance, the Britain-based law firm Stephenson Harwood, recently told its workers that they are welcome to work from home full time as long as they are willing to accept a pay cut of 20%. To put that into perspective, if someone was earning $100,000 annually that would automatically reduce that individual’s salary by $20,000. Needless to say, that is no small reduction. 

While rampant pay cuts for remote workers haven’t caught on completely in the United States just yet, it doesn’t mean that companies aren’t considering the possibility. According to a survey conducted by PayScale, approximately 60% of employers that responded to the survey expressed that they were considering cutting pay for their entirely remote workers. Additionally, some companies have been slashing the salaries of workers who move to places in the US that have a lower cost of living. These companies use the justification that since the person will have a lower cost of living, that employee’s standard of living would remain unchanged by the pay cut. 

Moreover, other businesses have expressed that they view remote work as a perk, and thus the salary cuts are based upon the “value” of that perk. That perspective gives rise to a question, though. Is that really a fair way to think? Especially when there have been studies that suggest remote workers work longer and harder than those who travel to an office. From this perspective, it looks like companies are simply punishing people for wanting to work outside the office, no matter how diligent or productive they are. 

Overall, it remains to be seen whether or not more and more companies begin to jump on the pay cuts for remote workers bandwagon. That being said there are two things that are abundantly clear right now. The first is that a large number of individuals prefer working remotely. Raphael Kelly, who works as an operations manager at FedEx, explained it best when he told the LA Times that as a remote worker you are “…accessible to your family, you’re able to put your dinner on during your breaks, and it’s a benefit also because it’s work-life balance.”

The second thing that is evidently clear is that as much as people love working remotely is as much as many companies despise it. These two competing sentiments are destined for a collision course. That much is obvious. Beyond that, the ultimate outcome of those clashing thoughts is something that will be determined in time.