The Great Post-Pandemic Salary Debate: Should Where You Work Affect Your Salary?

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As the coronavirus pandemic recedes and vaccination rates rise in the United States, one question is a priority for employers and employees who have worked remotely in the past 16 months: when – and how – will return us one day at the office?

Approaches taken by companies are ubiquitous, from returning to full-time office hours to having employees continue to work remotely in perpetuity. Some business leaders are sounding the bugle for people to come back, saying in-person collaboration is essential to organizational culture and dismissing even those who prefer to work remotely as lacking in motivation or ambition.

JPMorgan Chase CEO Jamie Dimon is a strong advocate for employee return, saying working exclusively from home hinders younger workers, who benefit from face-to-face mentoring from more experienced professionals.

“It has accelerated a trend, but it does not work for the youngest. It does not work for those who want to push, it does not work in terms of spontaneous generation of ideas,” he told the Council recently. CEOs of the Wall Street Journal. .

Some bosses take an even harsher line, saying remote workers should see their wages cut. And Catherine Merrill, CEO of The Washingtonian, a monthly magazine focused on politics and culture, suggested in a Washington Post advisory room in May that people who work from home should be classified as hourly contractors. She also said managers had “strong incentives” to demote employees who do not return to the office after the pandemic. Some senior managers in the publication quickly organized a revolt.

A pay rise for workers who go to the office?

But threatening to cut workers’ compensation remotely is counterproductive and would hurt companies to retain talent in a competitive job market, according to employment experts.

“If a company values ​​office work, then paying people more would be a healthy way to approach it and have that incentive instead of focusing on who you’re going to pay less,” said Brie Reynolds, Business Development Manager. career and coach. at FlexJobs, a job site for remote work. “It would be more attractive from a marketing point of view if they said, ‘This is where we put our value’, instead of devaluing people when it’s not really based on the work they do. , but from where they work. “

By offering office workers better wages and benefits, a company is also clearly expressing its values, added Reynolds. “If they think what they are saying about working in the office is true, they might say, ‘We enjoy working in the office so much that we want to pay you more to get in. “”

Meanwhile, the status of an independent contractor does not depend on whether someone is working in the office or remotely, but rather who controls the work.

“It’s a legal classification under federal law that examines who controls the terms and conditions of services rendered,” said Helen Rella, employment lawyer at law firm Wilk Auslander. “Independent contractors are usually people who come in, perform a low-key task and exercise independent judgment,” she added. “And when that job is done, they move on.”

The wage cuts are “enraging”

Social scientists have shown that people tend to feel more disappointment when something is taken away, like money, than they feel happy when they receive something, like a raise. salary.

“We know this is probably the greatest law of human behavior – that losses are more painful than gains are pleasurable,” said Adam Galinsky, professor of leadership and ethics at Columbia Business School. “Anytime you take something out it’s deeply painful and infuriating for people, so I would say cutting things should always be done with incredible levels of caution and care.”

Employers could also violate equal pay laws if they paid remote employees less to do the same work as their peers in the office, especially if more women than men chose to work out of the office. home.

“If you have a lot of employees working remotely and they are paid 20% less, that would be a problem,” said Aaron Goldstein, employment lawyer at international law firm Dorsey & Whitney.

In some cases, the pandemic has resulted in cost savings for employees, who have stopped paying for round-trip transportation to the office, work clothes, lunch, coffee, and other expenses associated with traditional work in the city. office. In addition, some workers have moved from expensive cities to areas where the cost of living is lower or to live with relatives.

“Sorry, that doesn’t work”

As a result, some executives have suggested that some employees’ salaries should decrease to reflect lower spending. James Gorman, CEO of Morgan Stanley, told the US Financials, Payments & CRE conference this month that bankers and other staff must operate from the Times Square headquarters in Manhattan to earn their full salary.

“If you want to get paid New York rates, you work in New York. None of that, ‘I’m in Colorado… and I’m paid like I’m sitting in New York. Sorry, that doesn’t work “said Gorman.

But some companies also saved money during the pandemic by reducing their real estate footprint, for example, or passing some of their electricity costs on to employees who worked from home (and generating higher electricity bills as a result).


Back to the office (maybe)

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Ultimately, companies and employees may be able to come to an agreement if employers provide options for workers.

“In negotiations, you can get a better deal for yourself – and have the other side see you as flexible and cooperative – when you come up with choices. You can be aggressive and ambitious in your first offer if you present it as a choice, ”said Galinsky. .

For example, a company might present its employees with two different compensation packages, one for office work and one for remote work. Still, experts warn that hybrid work models that pay different groups of workers differently could create tension.

“Anytime you have one group of employees doing one thing and another group doing another thing, you have a chance that an ‘us versus them’ dynamic sets in,” said Jeffrey Polzer, professor of resource management. humanities at Harvard Business School. “If a specific group of workers return primarily in person and another group work primarily from home, it could create a rift between these two groups which could have dysfunctional consequences.”



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