Google’s Plan to Cut Remote Workers’ Pay Is a Dumb Idea. Here’s Why – Inc.

Google mayreduce the salaries of employees who choose to work at home full-time, based on the cost of living where they live, according to an internal calculator viewed by Reuters. It's an idea that's gaining traction in Silicon Valley and elsewhere. It may seemsensible, given that a salary that barely covers a San Francisco studio apartment might get you a mansion in, say, Topeka. That's the logic Google says it's using. "Our compensation packages have always been determined by location," a spokesperson told Reuters.

But cutting pay for existing employees who opt to work from home is a terrible idea and it shows a complete lack of emotional intelligence. If Google is smart, it will shelve this idea. So will Facebook, Twitter, the UK government, and any other company considering a similar move. Here's why:

1. A salary is about more than just paying the bills.

A Google employee interviewed by Reuters commutes two hours each way to the company's Seattle office. That employee was considering switching to remote work permanently when the company reopens its offices in October. But then the employee looked at the location-based pay calculator and realized the switch to full-time remote work would mean a 10 percent pay cut--in effect, rescinding the raise that came with this person's most recent promotion. "I didn't do all that hard work to get promoted to then take a pay cut," the employee told Reuters.

So when Google's office reopens, that employee will go back to commuting. That's bad for the employee, bad for the environment, bad for other Seattle-area commuters, and even bad for Google, since some of the four hours the employee spends traveling every workday could likely be used for work instead. I'm guessing that if this employee did the math he or she might find that working from home would gain back some of that lost salary in savings on gas, wear and tear on the car, clothing, perhaps child care, and so on.

But the math doesn't really matter. In real life,a pay cut will feel like an insult to most employees, even if it has nothing to do with their performance or their value to the company. You're literally telling them that they're worth less. Is that the message you want them to hear?

2. Google is beinggreedy.

Since the beginning of the pandemic, countless employees have accepted pay cuts, furloughs, and other painful measures when their employers suffered severerevenue losses. Those employees understood that their organizations were facing tough choices and a threat to their very survival.

None of that is true for Google. Like other tech giants, it's thrived during the pandemic. Cutting people's salaries when your share price has more than doubled, your revenues are up 62 percent, and your profits are up even more seems like the pinnacle of corporate greed. Not a good look.

3. It will make Google even more unequal than it already is.

Google has already faced very vocal criticismover itsgender pay gap.And aStanford professor and remote work expert has already predicted that simply allowing employees to choose full-time remote work will make the gender pay gapworse for most companies. Why? Because surveys showthatwomen--who most often provide care for small children or ailing relatives--are likelier than mento choose full-time remote work. And there's evidence that working from home full-time puts youat a disadvantage when it comes topromotions and raises.

With more women than men working remotely full-time, female salaries will likely fall even further behind those of their male colleagues than they already are. But apparently that's not bad enough, so now Google will tack on a pay cut that disproportionately affects its female employees.

You can see why location-based salary cuts for current employees who choose remote workis an awful idea for any company that isn't facing dire financial pressures. In theory, it might seen logical, and even fair. In practice, it's likely to be a disaster.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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Google's Plan to Cut Remote Workers' Pay Is a Dumb Idea. Here's Why - Inc.