Business-Minded Legal Solutions

Companies re-evaluate pay structure for remote workers

As the coronavirus pandemic passes the one-year mark, remote workers are still wary of returning to the office despite vaccinations ramping up and restrictions easing across the country.

Many of these employees have even taken the extra step of relocating from high-cost-of-living states like California to more affordable and tax-friendly states like Texas.

Companies examine compensation levels

With this shift in the workforce, companies such as Facebook, VMWare, Twitter and other large tech companies say they will adjust pay levels for remote workers, basing their compensation on where they live.

After a year of staying home, many employees look upon remote work as a benefit that gives them more control over their work-life balance. One recent survey revealed 90% want to be allowed to choose whether to work in the office or from home once restrictions ease.

Two-thirds of those say they want to maintain control over their work schedules, which they have been able to do for most of the pandemic. However, only about one-third said they would agree to take a pay cut to continue to work remotely.

Separate pay structures expected to emerge

Many large companies with multiple office locations already base salaries on the cost of living and other factors where the employee resides. But workers who transitioned to being remote during the pandemic have largely been on a level playing field with in-office employees. However, once offices reopen, many predict pay levels will differ between:

  • Office-based workers
  • Remote-first staff

Experts say HR departments are already creating separate policies and pay levels for both types of workers based on where they live. That division will likely include benefits and perks.

A new world order for hiring

Some companies have already altered their hiring policies and recruitment processes, requiring new workers to live in certain states or work in a brick-and-mortar office. Others are developing hybrid arrangements, where employees can work from home on certain days or come into the office only for specific meetings.

HR and recruitment specialists say regardless of where these new employees work, companies must not skimp on funds for training and integration. Some large tech companies will continue to bring new employees – including remote workers – to their headquarters or nearest office for orientation when it is safe to do so once again.