Should Employers Cut Your Salary If You Change Cities? (cnn.com) 346
CNN reports:
Stripe is paying employees $20,000 if they relocate from expensive cities such as San Francisco, Seattle and New York, where the company has offices. But workers who make the move will have to take a 10% pay cut.
"Twitter Inc. and ServiceNow Inc. have all considered similar measures," reports Bloomberg. And Forbes notes that other companies are also grappling with similar policies: According to Bloomberg, "employees who worked at VMware's Palo Alto, California, headquarters and go to Denver, for example, must accept an 18% salary reduction. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay." Rich Lang, VMware's senior vice president of human resources, offered a positive alternative. When a person relocates and works remotely, they "could get a raise if they chose to move to a larger or more expensive city..."
Facebook CEO Mark Zuckerberg forewarned his personnel, saying those who flee to lower-cost cities "may have their compensation adjusted based on their new locations." The chief executive added, "We'll adjust salary to your location at that point. There'll be severe ramifications for people who are not honest about this."
"Twitter Inc. and ServiceNow Inc. have all considered similar measures," reports Bloomberg. And Forbes notes that other companies are also grappling with similar policies: According to Bloomberg, "employees who worked at VMware's Palo Alto, California, headquarters and go to Denver, for example, must accept an 18% salary reduction. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay." Rich Lang, VMware's senior vice president of human resources, offered a positive alternative. When a person relocates and works remotely, they "could get a raise if they chose to move to a larger or more expensive city..."
Facebook CEO Mark Zuckerberg forewarned his personnel, saying those who flee to lower-cost cities "may have their compensation adjusted based on their new locations." The chief executive added, "We'll adjust salary to your location at that point. There'll be severe ramifications for people who are not honest about this."
Compensation is already too low (Score:4, Insightful)
looking at it all backwards (Score:3, Insightful)
Everyone is looking at this *backwards* . . .
As an economist, I'll note that it's trivially easy to explain why employers would pay women less than men, or black less than white, etc.
What we *cannot* explain is why any idiot would pay men more than women, or whites more than blacks.
And here, the question is why any sane employer would pay an employee Silicon Valley wages when he could hire someone in a rural area for a lower salary that let the employee live like a prince there . . .
Unless there is somethin
Re:Compensation is already too low (Score:4, Informative)
Re: Compensation is already too low (Score:4, Informative)
Also, although it is unlikely on /., you may have friendly neighbors who will drive you to the clinic. Or heaven forbid you pay some kid fifty bucks to give you a lift.
Re: (Score:2, Informative)
You are partially correct. However, you need to factor in where people are in terms of their career. Just out of college? Expect to need one or more roommates or live with your parents. Working for a start-up? You get long hours and low pay in the hopes of a massive payout later. This is often more "doable" when you are young and still have the energy and haven't started a family.
As for city vs. rural vs. suburbia: Is the city accessible by bicycle for most of the year? If so, you may be able to live in th
Re:Compensation is already too low (Score:4, Insightful)
Easy to see someone born rich, free, to make their choices they feel like. No money, no choice, you go where you can get a job at the time. Not I'll wait a year, live in a cardboard box and not eat, so I can get a job where I want it. Does not happen, that way, you make the best of what you have accessible as a POOR person, no fucking choice ever, take what you can get when you can get it, no fucking rich parents to support your lazy ass. You even join the military, where you try to murder people and people try to murder you, want fun, I am sure everyone who chooses that chooses it because they want their body mangled on the battlefield, and get, support you troops when you get home, oh wait you are a mangled useless shit head now, no longer one of the troops, you wasted all that expensive training getting blown apart because you were shite troops, suffer fucker, nothing for you.
Ahh yes, all those choices the nepotistic spawn get to make when their well off parents make them all accessible, ohhh and the 'poor' little already rich darlings did it so hard, they had to put up with all the nasty poor people, as they climbed the poor as rungs on the ladder to success.
Fucking company pays me for what I do not where the fuck I live, that is my choice, company are just a lying pack of cunts seeking to inflate their profit margins.
Re: Compensation is already too low (Score:3)
Re: (Score:3)
The problem with cutting pay based on location is that cost of living indexes are a terrible metric for quality of life vs salary... much of which is really a function of individual needs.
Yeah, but still, a 10% reduction is almost nothing. That's likely to be a HUGE increase in pay compared with the Bay Area after adjusting for cost of living in most places.
For example, I could buy my parents' ~3500-square-foot house (plus a basement) in West Tennessee outright for about what I make in a year (including stocks and stuff). Here, that house would cost my entire salary for the rest of my life. So instead of spending an average of 47% of your salary on rent (S.F.), you've paid for a starter h
Re: (Score:3)
They've imported the effects of oursourcing (Score:5, Interesting)
Re: (Score:3, Insightful)
This seems a lot like another symptom of late stage capitalism.
What do you mean by "late stage capitalism?" Is that just a buzzword you're throwing around?
Re:They've imported the effects of oursourcing (Score:5, Funny)
What do you mean by "late stage capitalism?"
It means the last gasp of capitalism before the dictatorship of the proletariat is established, leading to a communist utopia.
Karl Marx explained the term in his book. I have a copy on my bookshelf next to the other fairytales.
Re: (Score:3)
This seems a lot like another symptom of late stage capitalism.
What are you talking about? Pay has always been localised since capitalism began. The only reason this is even a discussion now is because people have become more mobile and people are starting to actively shun expensive cities.
You pay to attract talent at market rates. And just like whether I'm selling something to someone in a high street in London or in a cornershop in Banjul the market rate varies.
Re: (Score:3)
Oooor we can unionize and you can't stop us! LOLOLOL
Re: They've imported the effects of oursourcing (Score:5, Insightful)
This is called the free market. If you believe your pay is too low, you are free to withdraw your services and seek out more favorable terms with other employers.
Except for non compete clauses where you can't effectively work in the field in which you are trained if you leave your current employer.
Re: (Score:3)
Re: (Score:2)
Re: They've imported the effects of oursourcing (Score:2)
Re: (Score:3)
In several states, including California, non-compete agreements are mostly unenforceable.
Re: They've imported the effects of oursourcing (Score:2)
No (Score:5, Insightful)
They shouldn't care how much it costs you to live, they should care if your work is worth paying you X to do it.
And if it was good enough to pay you X in city Y then it should be good enough for them to pay you X in city Z.
How does it hurt them if you have a little more left over at the end of the month? And why is it any of their business? If anything I would think it would be a net positive for everyone including the company.
Re: (Score:2)
The market (should) determine pay. If the company can find similar talent for the offered -10% wages, then they should. If employees think they can get a better deal elsewhere, then they should pursue that.
Re:No (Score:5, Insightful)
That's great, except for all those contracts forbidding the employees to do exactly that.
Re: (Score:2)
Re: (Score:3)
Ever heard of non-compete agreements?
Re: No (Score:3, Insightful)
Re: No (Score:3)
Re: (Score:3)
So if you move to a less expensive place, your pay should be cut?
You're okay with that? Not as an abstract notion to ponder, but with the fact that YOUR actual pay will be reduced.
You will be paid less money for doing the same job, and you're fine with that? Wow.
Re: (Score:3)
It's weird to hear that you're fine with your pay being reduced just because you dared to move your home.
It doesn't cost the employer anything for you to work in a city with a lower cost of living, but what the heck, let them cut your pay and keep the cash because you don't need all that extra money. I mean, what would you do with it anyway? Buy clothes or food?
Re:No (Score:5, Insightful)
They shouldn't care how much it costs you to live, they should care if your work is worth paying you X to do it.
And if it was good enough to pay you X in city Y then it should be good enough for them to pay you X in city Z.
How does it hurt them if you have a little more left over at the end of the month? And why is it any of their business? If anything I would think it would be a net positive for everyone including the company.
Came here to say something like this. Exactly. You hit the nail on the head
Re: (Score:2)
That's a bit idealistic. They pay you what they can - meaning as little as they can. Jobs don't compete for workers, workers compete for jobs.
Re: (Score:2)
This. It's batshit cuckooland late-capitalist lunacy to be paying employees differently based on where they live, and I applaud any employees who hack this insane system in any way they can - whether by faking their address or living in a trailer in a SF parking lot.
And it's the logical extension of the same madness that created hotspot cities in the first place - in a sane world, all the Silly Valley megacorps would be hiring as many workers as possible from Bumfuq, Idaho, either by remote work or by openi
Re: (Score:2)
also, sounds like living locating isn't part of the contract, and Fuckerberg is trying to change it after the fact as a giant fuck you. Yeah we wrote a contract we were perfectly happy with but now the world has changed a bit we'll make sure you suffer even if it had no effect on us.
Really though, if you work for Facebook, what did you expect? Zuckerberg is just an ill fitting skin shut around a howling void. And people went to work for that eyes open, since it's not like he tries to hide it
Re: (Score:3)
With that line of reasoning they could easily decide to pay people a nice salary in mid-America, which isn't enough to live in San Fran, and you have the choice to move or find a new job. Companies aren't going to look at the expensive places as the base, they'll look at more modest places as the base as that's in their financial best interest.
Re: (Score:2)
In other cities, where you can rent a nice place for under $1000 and get a nice meal for $20, the official salary calculators state we need to pay about 20% over average even though our cost of li
Re:No (Score:5, Informative)
They shouldn't care how much it costs you to live, they should care if your work is worth paying you X to do it.
And if it was good enough to pay you X in city Y then it should be good enough for them to pay you X in city Z.
How does it hurt them if you have a little more left over at the end of the month? And why is it any of their business? If anything I would think it would be a net positive for everyone including the company.
The reason people get paid higher salaries per location does have to do with cost of living, but it also has to do with the perceived benefit to the company of operating in that location - which they aren't getting if you're somewhere else. It "hurts" them in the sense that, if they (Silicon Valley company) are going to have a programmer living in Houston anyway, they could fire you (average SV programmer) and hire someone there (top-tier local) and save $30k from their bottom line.
Would we enforce this the other way, e.g., if the company wants you to relocate you somewhere more expensive, you are stuck with salary insufficient to handle the increase in expenses?
By all means, use it as a negotiating opportunity. Point out that, even with a high-end salary for the new location, you are saving them money, and get something more generous than they would normally offer. But it's pointless to argue "I should still make SV wages if I want to WFH in Wyoming" because that's just not going to happen. (Well, unless you are irreplaceable).
Re: (Score:3)
Yeah the answer is that employers will pay as little as they possibly can.
If a company opens up a position for $50k as an engineer in San Francisco nobody will take it. They'll have zero resumes submitted worth interviewing.
So they'll up the rate to $100k. A few takers but not the top caliber of employees they're looking for.
So they up the rate to $200k and then they start getting resumes and applications for employees who are
A) Good enough to do the work.
B) Willing to live in San Francisco.
C) Are happy l
Re: No (Score:2)
Re: (Score:2)
Re: (Score:2)
You're not far off. If you could flip burgers in Manhattan from Montana, that's indeed what they should be paying. The only remotely reasonable reason to have geography-based pay is to account for geography-based costs that are a hard requirement for doing the job. When the work doesn't NEED to be done in a Palo Alto office and could be done from a satellite office, that becomes rather silly. And when you're talking about remote workers, it becomes howling madness.
Re: No (Score:5, Interesting)
And that is exactly the end game for some companies.
Today it's a voluntary move with a pay cut and small moving bonus. Tomorrow it is an involuntary move, with layoffs in expensive locations and small relocation bonus for those who qualify. And those cheaper locations may be in India, Philippines, South Africa, and other places where enough English speakers can be located.
Many tech companies have not needed expensive big-city offices for decades now. They have done it out of habit and management preference. Some companies and many individuals have figured this out, which helped fuel a housing crisis as people sold their three bedroom Santa Monica home for two million dollars, paid cash for a half million dollar mansion, picked up a few investment properties, and continued working in a cheaper, smaller tech hub.
I know some people who repeated it twice, riding the LA pricing surge, then moving to cities like Seattle, Portland, or Austin to ride it again. Now they're multi-millionaires just from happening to buy homes in the cities at the right time. :-(
Re: No (Score:4, Insightful)
And those cheaper locations may be in India, Philippines, South Africa, and other places where enough English speakers can be located.
I've been outsourced twice, and while I definitely was not overjoyed about it, I couldn't really come up with a moral justification why the company should not have replaced me with 2-3 cheaper people outside of "My birthright as part of the nobility of the modern world (i.e. being born a citizen of an industrialized country) is that I am inherently worth more than others who are not".
That said, both outsourcing projects eventually collapsed in tears, but even so, there is no inherent moral reason why I deserve to be paid more based solely on where I live (and thus indirectly on my citizenship).
As a member of the professional class, I've benefited greatly from the huge influx of cheap goods supplied from overseas. It would be rather hypocritical for me to complain as that same process now moves to my industry.
In the end, as I've warned my sons, the great flattening is inevitable and that period when we've been kings of the world for no particular virtue of our own is likely coming to an end. With luck, we raise everybody's boats to a level that is acceptable to us in the Industrialized world. But we're reaching the point where we need to be prepared to compete on an even footing with the entire world, not just our those in our city.
Re: (Score:2)
Re: (Score:3)
How do you flip burgers in Manhattan all the way from Montana?
Use a waldo [wikipedia.org].
Re: (Score:3)
Sounds like discrimination to me. (Score:5, Insightful)
Re: (Score:2)
If you base a salary on anything but their work, you are descriminating.
Although I agree with this, this is obviously not that case. They already do cost of living adjustments and people applying for jobs also factor in cost of living before accepting an offer. Silicon Valley and NYC pay is some of the highest in the world. I do find it strange that companies stay there because it costs them so much more. Instead of paying people to move you would think Stripe would just move their headquarters to a cheaper area. To a company, a person obviously isn't worth X dollars to t
Re: (Score:2)
Re: (Score:2)
Re:Sounds like discrimination to me. (Score:4, Informative)
If you base a salary on anything but their work, you are descriminating.
The salary is based entirely on how little they can get you to work for (which depends on CoL and competition, etc.). The difference between that and the actual value of the work is for the shareholders.
Re: (Score:2)
Shhh... careful with such comments. Some people might think you want to pay people based only on merit and nothing else.
Strangely enough (Score:2)
even 18% more to move to a city where expenses are so much more doesn't seem like a very good deal.
Where I live, $200K is enough for a nice (4br 2 bath house on an acre or more) suburban house with a 20 minute or less commute.
The 18 room house on 10 or 20 acres down the street went for about 800k last year. There are even homes in less desirable areas for as low as 30K.
I'd tell them to f themselves, since a majority of these people are probably working from home now anyways, and probably will be for a whil
Re: (Score:3)
To be fair:
If you require a car already, then your expenses will not be that much worse moving to a smaller city.
Primarily the difference between living in the big city, and living in a small city is the utter lack of transit services, thus if you didn't grow up driving, you simply can not move to a small city. You need a car just to get fuel to mow your lawn, you need a car to get groceries, you need a car to go to any events or attractions, etc. In a major city like NYC, SFO or LA, you can get just about
Re: (Score:2)
Re: (Score:2)
If I was living in a large city with a very high cost of living and my company offered a 1 time relocation fee to move anywhere at the expense of 10% cut in pay.. I would seriously consider it.
To the people complaining about it, you wouldn't have to accept the offer.
Wrong way to phrase it (Score:2, Redundant)
They shouldn't phrase it this way. Its better to say here is the base pay, then provide localization pay bumps depending on where the job is. I know some government agencies do something similar.
Re: (Score:2)
Too late, because I guarantee you all those adjustments will be downward from where everyone already was. It's hard to make people see that as anything positive.
Why not relocate to Gitega in Burundi... (Score:2)
Standard Practice for GS and military (Score:3)
GS salaries depend upon location and are more where the cost of living is higher. Same with the military. The BAH (Basic Allowance for Housing) varies on location unless you live on base, when you get nothing at all. And just for reference, compare living in the barracks to living in your own apartment off base. You live in less desirable housing and get less money as well. Officers do better at on base housing but in the lower echelons, not by much.
Re:Standard Practice for GS and military (Score:4, Interesting)
GS salaries depend upon location and are more where the cost of living is higher. Same with the military.
Landlords (folks renting out apartments) are very well aware of this. A friend of mine was an officer in the US Army stationed in Germany. When he was looking for an apartment, he asked the real estate agent about the rent price.
The real estate agent asked what his rank was, and then quoted a price that exactly matched his housing allowance for living off base.
Re:Standard Practice for GS and military (Score:4, Interesting)
Absolutely true. For overseas postings the BAH tables are thrown out and the actual cost is billed directly to the military. A good landlord will add the cost of estimated utilities into the rent, and if you wind up using less they will rebate directly too the soldier resulting in a slight bonus to the GI. Daughter went through that while stationed in Darmstadt, Germany.
carrot vs stick (Score:3)
The Colorado Industrial Plan (Score:5, Interesting)
One of the compromises between labour and management which came out of the bloody fights [wikipedia.org] of the late 1800s and the early 1900s was that workers wouldn't be paid any more or any less based on how far away from the workplace they lived. They wouldn't be paid less based on cheaper cost of living, and they wouldn't be paid more based on a longer commute. Management would only pay attention to what workers did after they started work for the day. This was set out explicitly in John D. Rockefeller's Colorado Industrial Plan [questia.com] (written with the advice of future Canadian prime minister William Lyon Mackenzie King), which served as a peace treaty of sorts between the warring sides.
I remember being surprised to read it set out explicitly. I had assumed that the way things are, with management not caring where you live or how you commute when they set your pay, was just the way things naturally were. Not so. This was a battle that had to be fought.
Looks like we're revisiting some of the compromises made back then. I wonder what the end result will be.
Re: (Score:2)
The US Government has had locality pay for a long time.
"Locality relates to the region where the employee works. This factor adjusts the base rate of pay for the cost of living in a geographic area. While each position is assigned to a specific grade, and each employee is assigned to a step within that grade, the pay rate will vary by location."
Solutions (Score:2)
Re: (Score:3)
If you're working from home charge them for the office space or deduct it from your taxes
You can't charge them for the office space and there are rules for deducting office space at home from your taxes. The key points are the location must be used exclusively as your office [irs.gov] and show that you use your home as principal place of business. In other words, you can't use your living room as your office and claim a deduction. From the above regulation:
Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.
If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.
Split the living expenses from actual compensation (Score:3)
I think it is wrong to affect the entire salary by this. They should split the salary in two. One part should be a living expenses compensation and it should be same for all employees in some location regardless of what position they are in. A second part of your salary should be completely independent of the location where you live and be strictly based on your job the quality of work that you are doing.
The problem to moving to a smaller city (Score:5, Insightful)
Re: (Score:3)
This is the mental calculation I have been going through. I do not really have faith that covid will mean "virtual forever" at any employer I would want to work for, even though my job really does not require a physical presence ever. I suspect management will once again want to have us all in their theoretical eyesight for comfort.
So what happens when I go build my dream home in a nice, cheap place and need to change jobs? Sounds like I'm selling my dream home and moving back to shitty texas or california.
Did your job offer explicitly mention a COLA? (Score:3)
If not, then where you choose to live should not be seen as a factor affecting your salary. It’s strictly what you and your employer agreed was fair compensation for your services.
I suspect we’ll start seeing lawsuits over this.
Why should anyone take zucc seriously? (Score:2)
As tonedeaf as facebook is, they get their employees based on their product.
Yes (Score:5, Interesting)
The reality is that the company and you agree on the salary. Now the company shouldn't bait and switch and say "you can work remotely if you want" and THEN come back and dock your pay - They need to be up front about that. However, if that's stated up front, that's within their rights.
It doesn't mean you have to continue to work for them or necessarily move but all the compensation packages I've seen factor in cost of living in the area where the office is located. It makes absolutely no sense for a company to pay San Francisco salary rates if you're going to live in Montana!
But it's not just the company trying to save a buck here - there's government and legal ramifications which we're now going to have to revisit. City tax structures are setup that a business will bring X employees INTO the city or surrounding areas. Not only do they get the tax dollars from the business but income tax from all the employees it brings. Getting a company to relocate or even stay in a city, if the company is big enough, will have the city hand over tax credits or other deals if the company locates there.
If it does, however, become normal for tech companies to keep 90% of their staff remote and scattered across the world - it's going to impact how the local governments can raise funds through income tax, property tax or even gas taxes.
My company (which is international) made tax deals with my city and the state to employ X people which in turn would give them Y benefits. That's under a binding contract the company signed with the city. So if the company allows us all to move out of the city or state then they may be in violation of that contract which would cost them more money.
Re: (Score:2)
That there is what's known as a straw argument.
That too.
Well of course they shouldn't (Score:4, Insightful)
But that's not the point. An employer will only pay you what they think you will take, and not a penny more. If you're in a location with a lower cost of living, of course they will pay you less.
This is why organized labor is so important. No individual worker can ever hope to get a fair shake on their own.
Re: (Score:2)
Re:Well of course they shouldn't (Score:5, Informative)
POISON PILL (Score:2)
I'm surprised corps are looking at this -- they must be desparate for nickel-and-dime. The problem is after they offer this and people take it, they are indisputably changing the conditions of employment to WFH. They can no longer demand physical presence at a given office, at least not without paying travel time & costs.
Whatever Benefits The Company, Not You (Score:4, Funny)
Worked at a company where programmers were paid more in Dallas than Colorado, but they'd say, "We're headquarted in Colorado. We pay everyone Colorado rates." Then some QA people moved from Colorado to Dallas. Same managers said, "QA engineers get paid less in Dallas than Colorado, so we're giving you a pay cut."
Companies will inconsistently spew the most convenient lie of the moment to make you complacent with what little they give you.
It's their decision (Score:2)
Should they do it morally if it makes financial sense, yes. It's their obligation to the shareholders.
Should they do it because it makes financial sense ... probably. Their bean counters will have a better idea about the employee churn it adds. Given the dire times and the poorer job prospects in the new towns, they can probably get away with it.
If it costs the company more money (Score:2)
They can always terminate your position. (Score:2)
I suspect the outcome of this (Score:2)
What's worse, pay cuts are an universal low pass filter as all the above-average performers will see the writing on the wall penny-pinching suggests and not just threaten but outright quit to work elsewhere.
The start of another offshoring wave? (Score:2)
This has dangerous ramifications all around. Although for starters - why would any company be employing people in SF and paying that cost-of-living tax?
- It will take a very small leap of logic and no boldness whatsoever to start moving software dev out of the US entirely with this kind of thinking, so I really think this is at the same stage Detroit was when auto companies started realizing how cheap it was to send manufacturing to Asia.
- Unless the cost-of-living is baked into an employee's contract, or
Hawaii? (Score:2)
"When a person relocates and works remotely, they "could get a raise if they chose to move to a larger or more expensive city...""
So, would that pay raise be enough to afford a beachfront apartment in Hawaii?
Negotiate (Score:2)
Everything is negotiable.
If you offered me $150,000 a year when you hired me to do the job, that is what you agreed to pay me. That agreement holds until we BOTH agree to change it.
If I want $200,000 we have to negotiate -I do not just declare that you are paying me more.
If you want to pay me $100,000 we have to negotiate -If you suddenly start paying me less than we agreed I will sue you.
Moving to another city is a negotiable value item. It may reduce my utility, as I can no longer come in to the office
Overlooked: It's a really good deal (Score:2)
Try to find tech jobs in another state that come even within 10% of an SF / NYC salary. If you switch jobs you are taking more like a 20% reduction, minimum, so it seems fair enough that the employer gives up some convenience of having you local, but doesn't give you as much of a salary reduction as the final location you move to would warrant... So it's a good deal for both sides.
They are thinking about it all wrong (Score:2)
They should have a base salary for the position, which does not change no matter where you live or work from, as well as a cost of living allowance, which varies from city to city, and is constant across the entire company for a given location, regardless of the position held or a person's seniority.
So yes, if you live in a less expensive city, you will make less money overall.
No, they shouldn't (Score:2)
Seems reasonable. (Score:2)
Re: (Score:3)
Of course they should ( and will ) (Score:3)
Unless you are already getting paid to work remotely, companies ( especially in areas like SF ) HAVE to pay their employees ludicrous amounts of money just so said employees can afford housing in the surrounding areas. It is the only reason the pay is so high in areas like that. No one wants to commute for 2+ hours so, in order to attract employees, they have to push the salaries up.
If you moved to an area that has a much lower cost of living, I would suspect ( no, I guarantee it ) your company is not going to continue shelling out ludicrous amounts of money to you once they realize how much they will be saving in salaries.
You may disagree with it, but that is going to be the reality of things.
Thats how the Gov't does it . (Score:5, Informative)
I work for the FAA. We have a base + locality pay ( same for every agency MOL) . I make x amount in base + locality pay (which is the same for like 70% of the country). If you live in an expensive area you get a higher locality pay. I think there are different ones for like NY, DC, LA... An I ( equivalent to a GS-13 ) in Dallas Tx might make 105k, whereas an I or GS-13 in LA would make around 140K (roughly). If you move from LA to Dallas or Oklahoma CIty you get a pay cut.
Re: (Score:2)
Re: (Score:2)
So what you're saying is: the company should benefit by paying me less for things I choose to do outside of work, away from the domain of my employer, as they rely on my co-workers and colleagues ratting me out for... trying to save money... which I earn from my employer?
Cost of living adjustments *UP* have been the norm for a while and one of the main draws of outsourcing is paying less. In a perfect world, an employee that is worth X to an employer should probably be paid some percentage of X but we know that's not the case because employers pay employees in different cities different amounts.
Re: (Score:3)
If your rent/mortgage gets cut in half, it seems reasonable for the company to also benefit some.
It shouldn't be dollar for dollar though or why move?
It should probably be negotiated between the employer and the employee.
In stripe's instance, they aren't making them move.
If someone doesn't want to move to a place 20% cheaper and take a 10% paycut then that's their choice.
If I winterize my house and realize a savings, how much should my employer get?
If I trade in my automobile for a luxury model, should I demand a raise?
If you choose not to reply, am I entitled to half the equity of the time you save?
Re: (Score:2)
If I winterize my house and realize a savings, how much should my employer get?
Thats not the correct logic.
If someone with the same skillset as you winterizes their house, and because of this lower cost of living they are willing to work for less than you...
Location-based pay wasnt a problem for all these years that people who moved to silicon valley for the ability to earn it benefited from...
Re: (Score:3)
If I winterize my house and realize a savings, how much should my employer get?
If I trade in my automobile for a luxury model, should I demand a raise?
If you choose not to reply, am I entitled to half the equity of the time you save?
These are all things you choose to do. In this case, Stripe is making an offer.
To use your example, this would be the same as an employer offering to winterize your house or install solar panels on your house in
exchange for a 5% cut in your salary.
Re:It seems reasonable to split the difference. (Score:4, Interesting)
Re: (Score:3)
It is reasonable in some cases. It will depend on where the employee moves to.
If they take a 10% cut in pay, but move to a place that cost of living is 30% less than by the parent company they effectively get a 20% pay raise. That's on top of the $20K moving bonus.
The employee also wouldn't have to worry about paying more tax on the portion of money earned in a higher tax bracket ( if the normal pay + 20% reached the next bracket ) saving them a few extra dollars VS. if they just got a 20% bump...
Re: (Score:3)
The employer is already realizing a huge benefit: not paying for (as much) expensive real estate to plant butts. HVAC, electricity, etc.
You'll note that most of the big tech companies happen to have offices in some rather expensive cities.