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In May, law firm Stephenson Harwood set the cat amongst the pigeons by announcing its staff could work from home permanently, but only if they accepted a 20% pay cut. Staff could, however, retain their full salaries working remotely for up to two days a week.

The firms said its policy struck the right balance.

Firms Cutting Pay for Remote Workers

It’s fair to say the move stirred some fierce reactions, even from others in the legal sector, but it seems Stephenson Harwood is far from the only firm to consider cutting the pay of staff who want to work remotely.

According to HR software provider CIPHR and as reported in Business Leader:

“Over two-thirds (68%) of British businesses are contemplating pay cuts for staff who opt to work from home, despite many (53%) saying they’ve actually saved money by having more remote workers.”

Google adopts tiered approach to remote worker pay

A former head of HR at Google urges caution. As a response to remote working, Google in the US adopted a tiered approach to pay, based on location. Those living in premium locations could receive up to 25% more than colleagues living in less salubrious neighbourhoods.

Pay cuts are “one of the most insulting, emotionally difficult things you can do to an employee,” Laszlo Bock told Fortune. “Even if Google is trying to be pragmatic with salary changes, these adjustments will only upset employees and lead to people resigning.”

“It really pisses people off. It’s a huge mistake, unless you’re trying to get those people to quit,” he added.

The landscape has been further complicated by the cost-of-living crisis (see below), which is making staff retention harder for businesses as employees look to increase salaries or lower costs.

What do you think? Is lower pay for remote working a pragmatic response to a change in the way we work? Or is it a risk to goodwill and staff retention that employers can ill afford right now? Tell us @JustPayrollLtd


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