Deena Merlen Quoted on Trend of Companies Adjusting Salaries for Remote Workers
The Economist published an article in The Economist Applied on October 12 entitled, “How Are Companies Adjusting Salaries for Remote Workers?” and reached out to Partner Deena Merlen for a comment. The article explores a trend to which companies such as VMware are subscribing in this era. This cloud-computer company requires that employees who choose to work remotely must accept a pay cut of up to 18% if they are working from a different city. VMware is not the only company introducing such policy; similar policies have been implemented or are planned at other tech companies including Facebook, Twitter, Stripe and Slack.
While it is understandable that employers may want to take advantage of such pay cuts, particularly if employees are working remotely from locations where the cost of living is lower than in the city where the company is based, there are several important considerations that employers should bear in mind. For example, as Deena notes in the article, “If you tell people ‘I am going to pay you less’, you have to make sure it’s an objective business-based decision. There has to be no reason for an employee to say it is discrimination.” Deena also explores the issue of employees working remotely in states where applicable state laws may provide workers relatively greater or lesser rights and benefits (such as paid leave and overtime pay requirements) than are available to employees under applicable laws of other states.
The article concludes that while there are good arguments for both cutting pay for workers who leave expensive cities, and for leaving salaries as they are, at the heart of these arguments are perceptions of fairness.
For more information, read the full article here.