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I've been with my non-profit organization, based in San Francisco, for three years. In October, I informed my supervisor that I am planning on moving to the Tahoe area in mid-December. The move is for personal reasons (my partner lives in Tahoe and we have been commuting back and forth to see each other for the last 2.5 years). I let my supervisor know that if possible, I would like to stay with the organization and continue in my role, working remotely, with semi-regular visits to the office (at least quarterly). This is not without precedent; we have a culture of remote- and flex-scheduling: folks who live in the Bay but outside of San Francisco are permitted to work from home 2-3 days per week, and we have one employee who is completely remote.

My supervisor responded positively to my request. She said she was glad that I wanted to stay with the organization because I am a valued team member, and that she has no concerns about the move because I've proven that I work really well remotely. However, she did state that because I was moving out of San Francisco, it would involve a pay cut, "for equity reasons" -- the implication being that since I would presumably have a lower cost of living than others living in San Francisco, it wouldn't be fair if I were to maintain my current salary. She didn't have a specific percentage for the pay cut just then, and said that because she'd never dealt with this situation before (i.e., someone moving from being an office-based employee in the Bay Area to a remote employee outside of the Bay), she would have to do some thinking about what would make sense.

We just revisited the conversation, and she let me know that a 10% pay cut is what seems "fair" to her. I have some strong reservations about such a significant cut and the entire concept of a cut in the first place, which I did communicate to her during our conversation. It's not clear to me what the organization's philosophy and policy is when it comes to compensating employees based on where they live or how much they work remotely. For example, how much of salary is based on the level of responsibility and/or the nature of the job, and how much is based on cost of living where the employee lives and the amount they work remotely?

When I posed these questions to my supervisor, she said that she did not have a precise formula that led her to the 10% pay cut. However, she pointed out that I am the highest paid manager at the organization and my move out of San Francisco would create too great of a discrepancy in pay between the other managers and me.

Additionally, for all of her insistence on fairness, I don't see this "policy" being consistently applied across the organization. We do have a location outside of the Bay Area, operational for six months out of the year, where employees are typically paid 10-20% less than their Bay Area-based counterparts. However, they are provided with free housing and meals while on contract. What seems more comparable of a situation are the folks who are partially remote and live outside of San Francisco. When folks arrange their schedules to come in to the office less often, or move to a less expensive part of the Bay Area, their pay has remained the same. (**I should note that I know this because I am responsible for processing payroll, and I therefore have access to the salary of everyone at the organization.)

Was I naive to ask to work remotely to live outside the Bay Area without expecting that there would be a downward adjustment to my salary? If this is indeed unfair or not a best practice for an employer, how do I present that to my supervisor? I've been doing some research, and I think because this is still a relatively new situation for employers, I haven't been able to find definitive answers. I did find a white paper by PayScale, How to Manage Pay for Virtual Workers, that states the following in its guidelines for pricing virtual job positions: "Is this a current employee who is relocating? If the answer is yes, then chances are high that you won’t take money away from that employee. In this case, you’re best to keep their salary in alignment with the ranges of your corporate or regional office." How can I best articulate to my supervisor the logic behind this recommendation from PayScale?

Rebecca
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  • If they don't want to pay you the same amount, there really isn't much you can do, except to find another job. – Bernhard Barker Dec 05 '17 at 07:27
  • If your cost of living went up would they give you a pay rise to match? I doubt it. Personally, were I in your position, I'd be annoyed that she doesn't respect you enough to come up with a less flimsy pretext. But the bottom line is the employer has the power and this is the deal they're offering you and it's a take-it-or-leave-it situation. – Jonathon Cowley-Thom Dec 05 '17 at 09:03
  • Did you talk about who is paying your travel expenses and potentially accommodation for the times you come to the office? Because effectively working remotely (remote enough to have long travel and maybe stay for multiple days) will make you a more expensive employee to them, if they pay for it. Or it would be a cut in the pay that is available to you. So maybe they are also trying to offset that. – skymningen Dec 05 '17 at 09:56
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    This simply isn't correct. Cost of living is a factor too and SAN FRAN is among the highest. – Neo Dec 05 '17 at 13:25
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    10% pay cut to move out of San Fran is trivial. Typically New York and San Fran folks get paid 30% more to account for cost of living. Take the deal and be happy to be with your partner full time. – Neo Dec 05 '17 at 13:40
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    @JonathonCowley-Thom, cost of living is huge factor in salary determination based on the city you live in. People in San Francisco make way more than people in Martinsburg WV for the same jobs because housing costs are so much lower in one place vice the other. You could not even rent a one bedroom apartment in San Francisco for the amount of money I make elsewhere and yet I make a good salary for my geographic area. It would be unlikely in the extreme that the OP could get the same salary he is currently getting in the new location if he got another job. – HLGEM Dec 05 '17 at 14:57
  • Think of it this way: You are going to have far more discretionary income after that 10% cut than you do now. – Ask About Monica Dec 05 '17 at 19:55
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    "Was I naive to ask to work remotely to live outside the Bay Area without expecting that there would be a downward adjustment to my salary?" a better description would be **staggeringly, unbelievably naive" :) – Fattie Dec 06 '17 at 16:50

2 Answers2

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You have asked for quite a large accomodation from your employer, and they have every right to ask for an accomodation from you in return--including a salary cut.

I don't think your employer's argument is a good one. Your pay should be based on the value you bring to the company, not on the choices you and your peers make for living expenses.

However, there may be good arguments that "the value you bring to the company" is affected by your move offsite. Often being off site has downsides for the company--especially for managerial positions that typically involve a lot of interaction with other employees.

You are, of course, free to make a counter-argument that your salary should not be cut. The argument ought to be about your value to the organization, not what is "fair" or "normal", though. The offer of keeping your job with a 10% pay cut is a much better offer than many companies would make in this situation.

  • Well, if the company argues based on "fairness" it might be they won't regard arguments with regard to what value OP brings as relevant. I'd prepare arguments in both directions. It is easy to argue that OP has increased rather than reduced costs - longer travel the days she actually comes to the office, having to provide a proper office space in her home, increased heating and energy bills. OP can as well argue it is her who is accomodating the company - she can say she'd move anyway, but chose to stick with the company despite it being a hassle to work remotely. – Frank Hopkins Dec 05 '17 at 12:24
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    "Your pay should be based on the value you bring to the company" Pay is simply based on market rates. On-site employees in SF (generally) make more than remote workers. This is an absolute basic observation about programmer pay, at the moment. – Fattie Dec 06 '17 at 16:50
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To me that logic is nonsense. Your salary is meant to pay for the time you dedicate to your work, not for your expenses.

If your work stays the same, and your supervisor acknowledges it, your pay stays the same, too.

The fact that you might be able to save some expenses shall not influence your salary. Following that logic everybody would move to live into the most expensive neighborhood, as this would grant higher salary for "fairness".

L.Dutch
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    This simply isn't correct. Cost of living is a factor too and SAN FRAN is among the highest. – Neo Dec 05 '17 at 13:24
  • @MisterPositive actually no there is is no Man on a cloud in the sky that sets the rate you deserve – Neuromancer Dec 06 '17 at 20:09
  • @Neuromancer. I agree with that, except for the fact that cost of living is a factor. San Francisco is an expensive area to live, therefore the same exact job in San Francisco vs Boise Idaho is going to be substantially different. I guarantee it. – Neo Dec 06 '17 at 21:06