Pemo TheodoreTech workers fleeing the San Francisco Bay Area to work remotely amid the pandemic are facing a new reality: pay cuts.
Over the past several months, Covid-19 has shaken traditional notions of where employees can work. In Silicon Valley, which has a relatively high cost of living and an employee base with access to state-of-the-art remote-work tools, companies are devising plans for a future with decentralized staffs. In some cases, changes can include cutting salaries by 15% or more depending on where someone moves.
The nascent pay-cut movement stands to create tension between some of the most profitable companies in the world and skilled employees who enjoy high salaries.
Companies point out that changing pay based on the local cost of living is standard practice for many organizations, including the federal government—with decisions to raise or lower salaries related to housing costs and other factors. Letting someone take a San Francisco salary to Wyoming could be considered unfair to present and future remote hires in cheaper cities who might receive a lower wage.
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