Should home workers expect a pay cut?

Employees working from home in areas commanding a lower wage than their work location should expect a pay cut if they want to continue past the Covid crisis, bosses have warned.

One of the high-profile companies to jump onboard with working from home was social giant Twitter, which announced back at the start of March that staff would be able to work from their homes “forever”.

Jack Dorsey CEO of Twitter commented recently: “The past few months have proven we can make that work. So, if our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen.”

Twitter is one of many companies weighing up the pros and cons of WFH for its staff, a decision currently controlled by the employee. But what happens when the Covid-19 pandemic is over? Does the work from home culture continue?

“Employers are facing a really tough decision ahead on how to deal with pay levels for home workers,” said Jonathan Ratcliffe of Offices.co.uk. “You recruit someone in, say central Leeds, commanding a high wage due to location and job market, but they live in a low wage area such as Barnsley. Their commute in effect is inflating their wage – once they work from home, it might be hard to justify.”

Twitter has clarified its position recently and while it refers to its own situation in San Francisco, the same could be applied to any regional town or city in the UK.

“Twitter is saying that employees who ditched pricey San Francisco as a result of Covid-19 and lockdown to work from home will take a pay cut commensurate with living costs in their new location. The interesting part of this is that a survey on Twitter’s own platform suggest 44% of us would take a 10% pay cut to work from home,” added Ratcliffe.