I mean if you look at it from the other way… they agree to pay $X for the work but give you an increase of $Y to support a higher cost of living in certain areas to be near the office.
This is being spun as a decrease instead of seeing that people actually have had an increase because of CoL. which no longer applies if you move.
If you agreed to $X and then move to say the Bay Area would you expect them to keep your salary the same?
The companies I've seen adjusting salaries are adjusting for "market rate" of salaries, not CoL. This can result in moving to an area with a higher cost of living and a lower salary.
But that isn't how it works, at least at any company I have seen that implements remote relocation (and I assume FB too).
If you move to a place with a 50% COL as NYC or SF, you retain 70% or so of your salary. You still come out ahead. I think you've set up a strawman fallacy here. People come out ahead financially when relocating to lower COL, even with the downward salary adjustments.
Google adjust salary based on location. I moved from the Bay Area to the Seattle area, and took a small paycut. And it's not directly COL, they are paying 'market rate' (or, some multiplier based off that) for the area.
I doubt you'd be able to keep that current compensation, though. Most people I've talked with who have moved out of the bay area (or another HCOL area) to somewhere with a lower cost of living have either gotten an immediate pay cut, or their company has told them that they won't be getting pay raises until their pay is in-line with their new local market.
Maybe it should stay the same from a moral perspective, but that's not how the system currently works in the United States - and, perhaps, most of the world.
No (viable) company in the United States pays for the value of your labor, but for the profit it can have from your labor. They pay you the very minimum they can get away with, and no more, in a complex decision-making process that tries to extract the maximum profit from your labor. Food, benefits, time off etc, it's all part of the goal of maximizing profits from your work.
So considering the above, and ignoring the morals of doing so, no, your pay shouldn't stay the same because that doesn't maximize profits for the company.
After you move, the company will pay you less because you will still be gladly giving them the same work, if not better work, for a smaller salary due to the new and immense benefit of accepting you to work from any place you want.
Now, you can always refuse to accept these terms. Your options: remain in the bay area or go to your new house elsewhere without the job. Would you prefer any of these options to taking the pay cut?
That's what I thought!
PS: possibly one day we'll have such a strong labor market that people in Wyoming can charge top dollar to bay area companies because the companies won't be able to find anyone else to do that job for less. But I think we're not there yet.
I agree. This type of action is signalling the company doesn't actually pay you for your knowledge or output. It pisses me off. Flip the argument around; if FB hired you to work remotely from Montana, then you decided to move to San Francisco, would they INCREASE your pay based on COL?
If the answer is "no, of course not", then why is it okay for them (or any company) to pay you less, if you move to a lower COL area? It absolutely isn't fair, and companies want to eat their cake and have it too.
No they're saying for a Gitlab employee moving to a higher COL area is essentially getting gitlab to pay for the mortgage (assuming the higher wage actually covers the increased mortgage of course).
Adjusting by CoL is only good for the employer, if a worker is worth X working remote in SF they're worth the same amount in the middle of nowhere.
The whole paycut controversy seems a little strange to me. No one bats an eye when a company bumps your salary up if you move to NYC or SF yet if they bump it down when you move out surely that's the same thing right? Obviously there are edge cases but as a general principle that seems logical to me. Ofc it depends on how much each bump is etc. but on the surface a paycut while moving somewhere with lower cost of living doesn't seem radical to me.
You can't make a statement like that without facts to back it. The truth is that companies do this all the freaking time. Besides that, it has also been common for a decade+ for CA-based employees (both LA & SFBA) to sell their artificially inflated house and quit their job to move a lower COL state (often Texas, Washington, Oregon, or North Carolina, all of which are much cheaper and have lower income tax schedules). If they stay with their existing company, their salaries are frequently decreased based on COL calculations. Otherwise they use the previously mentioned tactic and quit for something different, using their current salary as a negotiating point.
Bay Area salaries are partly about location to begin with. This seems obvious, so I'm surprised by arguments that assume the contrary, usually in the form of "my salary reflects my value to the company, which doesn't go down when I move". The antecedent is a false assumption (the salary doesn't just reflect the employee's value to the company) so the argument is invalid.
To help yoy grok why what FB is doing makes sense, view this from the reverse situation: Let’s say you live in a low cost area (e.g. AK) and then move to the Bay Area, working for the same company.
In that case, with your COL doubling, would you expect a pay raise? Of course you would! Because your net pay would reduce significantly otherwise.
Many companies will want to adjust your salary downward if you are moving from the Bay Area to a lower cost of living location. This article seems to gloss over that fact.
Are companies going to start adjusting salaries for people who move (this makes zero sense to me, the value you add most likely doesn’t change because of where you live)?
That’s where this gets weird... people move to these better-to-live places and then all the employers decides to pay them less because of location.
Then you just push up housing prices with salaries that slowly reset over time to be cost of living adjusted to the area.
>It's a bit strange that they cut or raise your pay by that calculator when you move cities."
That is odd. Usually if you make more based on your previous location a company won't actually claw anything back you just will likely not be getting any raises.
This is being spun as a decrease instead of seeing that people actually have had an increase because of CoL. which no longer applies if you move.
If you agreed to $X and then move to say the Bay Area would you expect them to keep your salary the same?
reply