Reducing Pay for Remote Workers Will Present Interesting Legal Questions – Including Unexpected Complexities

By Rachel Puryear

As many people who worked remotely during the pandemic will now continue to do so permanently, some tech companies such as Google are weighing cutting pay for remote workers. Naturally, this gives rise to a hot debate.

Toy dinosaurs, one blue T-Rex and one orange Brontosaurus, posed as though they are arguing with one another, on an office rug.

The Employers’ Perspective:

Google’s side of the argument is that they do and always have paid employees differently based on location. This is to compensate for the higher cost of living in certain cities, and attract talent by ensuring that workers in pricy cities can enjoy a standard of living comparable to those elsewhere.

If an employee does not live close to an office in order to work in person, the employer should not pay a location-based differential, Google argues. Furthermore, employees working remotely save time and money by not commuting. If getting to work is much less of an expensive hassle, isn’t that worth a certain degree of pay cut?

The Remote Workers’ Perspective:

In short; Google can afford to continue to pay full salaries, the remote workers argue. Pay is based upon the value of employees’ work, not where they work from. Besides, Google can save money on office space if more people work from home. Furthermore, pay should not be based upon employees’ financial and personal choices.

What Makes Sense, and Where it Gets Tricky:

Google probably has written company policy, predating the pandemic, which spells out location-based pay. Individual employees’ offer letters might have also specified that the compensation package was based upon the employee working in a particular office.

If this is true; Google could show that employee pay is specific to location, and that they are not simply penalizing remote workers. If that’s the case, they can likely enforce location-based pay policies.

However, if this becomes a trend and more employers start paying lower wages to remote workers, some of them could find themselves in hot water over disability accommodation and other equal opportunity matters.

Remote Work Ties in With Disability Accommodations, Civil Rights:

One significant factor driving the standoff over remote work is that remote work can help level the playing field a lot for many workers who tend to be marginalized in job markets and in workplaces. Workers with disabilities and health considerations, parents of young children, family caregivers, some neurodiverse individuals, some members of the LGBT community and others needing to live around supportive and accepting communities, and more; often find remote work not just convenient, but important or even essential to holding down a regular job.

Accordingly, companies who pay less to remote workers and appear to be doing so as a penalty, or as simply taking advantage; could be viewed as discriminating against the types of workers who tend to especially benefit from remote work. The likelihood of trouble for a particular employer would depend a lot on how they handle communication around the matter. Employers with a hostile attitude towards remote workers could find themselves subject to some rather interesting lawsuits based upon equal opportunity laws – and such cases could present some novel questions for judges and juries.

In short, I do not think employers across the board will suddenly find themselves sued over remote work and pay differentials. Most American workers surveyed said that they would take a small pay cut to work from home permanently. The results of this survey suggest that most workers feel that a small pay reduction is a good tradeoff for the benefits of working from home, and recognize the savings in costs and time of doing so.

However, employers will need to be careful about how their company policy is written and communicated. This is important in ensuring that workers desiring remote work because of special needs do not feel unduly penalized for doing so.

Furthermore, employers paying a differential to in-person versus remote workers ought to consider making the differential as small as is feasible to do without hardship – particularly where no company policy supports good reason for a differential. Most respondents in the above survey said they would not accept more than a 5% pay cut to work at home. Pay cuts greater than that therefore could put an employer at greater risk of problems down the road.

Thank you, dear readers, for reading, following, and sharing. Here’s to your having the work flexibility you need, and fair opportunities.

Note: This post is strictly an opinion. Nothing in this post constitutes legal advice. Legal advice will vary greatly depending upon specific situations. Individuals with legal questions should consult a qualified attorney.

Uncategorized