Google employees who work from home could lose money

Google staff face possible paycuts for working from home in a move that lawyers believe could hit Irish workers generally.

A Google pay calculator seen by news agency Reuters shows staff based in the same office as before the pandemic face different pay cuts if they switch to home-working, with longer commuters hit harder.

The rules are likely apply to staff working in Dublin as well as across the internet giant’s network of offices internationally.

“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,” a spokeswoman for Google Ireland said.

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Solicitor Richard Grogan, of Irish employment law specialists, Richard Grogan & Associates, predicted on Wednesday that the multinational would apply it to workers based at its European HQ in Dublin.

He added that “other multi-nationals, large Irish companies and even SMEs are looking at this as well”.

Mr Grogan pointed out that there is already a precedent for this approach in the UK, where some workers are paid London premiums to cover the city’s higher living costs.

He explained that as most Irish workers’ contracts specify their place of work, those seeking to work from home permanently were attempting to change this term of their agreement.

That could pave the way for employers to negotiate, or insist, on a pay cut for those living in cheaper locations than cities such as Dublin or Cork.

“People will ask why someone working in Kerry is paid less for doing the same thing than someone in Dublin, but the answer is that it costs more to live and work in a city like Dublin,” Mr Grogan said.

The solicitor agreed that unions and other workers’s groups could protest, but he predicted that pay cuts could be a reality for some employees opting for home working.

Google is now offering employees a calculator that allows them to see the effects of a move. But in practice, some remote employees, especially those who commute from long distances, could experience pay cuts without changing their address.

“Our new work location tool was developed to help employees make informed decisions about which city or state they work from and any impact on compensation if they choose to relocate or work remotely,” the spokeswoman said.

Commute

One Google employee, who asked not to be identified for fear of retaliation, typically commutes to the group's Seattle office in the US from a nearby county and would likely see their pay cut by about 10 per cent by working from home full-time, according estimates by the company's work location tool launched in June.

The employee was considering remote work but decided to keep going to the office – despite the two-hour commute. “It’s as high of a pay cut as I got for my most recent promotion. I didn’t do all that hard work to get promoted to then take a pay cut,” they said.

Jake Rosenfeld, a sociology professor at Washington University in St. Louis who researches pay determination, said Google's pay structure raises alarms about who will feel the impacts most acutely, including families.

"What's clear is that Google doesn't have to do this," Prof Rosenfeld said. "Google has paid these workers at 100 per cent of their prior wage, by definition. So it's not like they can't afford to pay their workers who choose to work remotely the same that they are used to receiving."

Screenshots of Google's internal salary calculator seen by Reuters show that an employee living in Stamford, Connecticut – an hour from New York City by train – would be paid 15 per cent 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.

Calculator

Screenshots showed 5 per cent and 10 per cent differences in the Seattle, Boston and San Francisco areas. Interviews with Google employees indicate pay cuts as high as 25 per cent for remote work if they left San Francisco for an almost as expensive area of the state such as Lake Tahoe.

The calculator states it uses US Census Bureau metropolitan statistical areas. Stamford, Connecticut, for example, is not in New York city’s area, even though many people who live there work in New York.

A Google spokesperson said the company will not change an employee’s salary based on them going from office work to being fully remote in the city where the office is located. Employees working in the New York city office will be paid the same as those working remotely from another New York city location, for example, according to the spokesperson.

Google did not specifically address the issue for commuters from areas such as Stamford, Connecticut. – Additional reporting: Reuters