The tussle over location-based pay

Companies are grappling over whether fully remote employees should be paid the same as in-office staff. What is the right way forward?
Sam is a full-time employee for a Big Tech company. Based in London, he’s still currently working from home five days a week. His employer has offered him a great deal of flexibility: he can return to the office whenever he wishes, or continue working remotely forever.

The choice is Sam’s, but there’s a crucial caveat: if he decides to move too far from his firm’s London headquarters, he’ll be docked 10% of his wages. “The pay cut would be adjusted to the cost of living and labour markets outside of London,” he explains.

Sam and his colleagues have worked remotely throughout the pandemic on full salary. Yet, employees deemed to have moved too far from the office over the past two years, and who want to continue working remotely, will be forced to take a sizable pay cut. Those within the right radius who want to stay remote will lose perks like travel discounts.