Post by amberlyrose on Jun 14, 2021 12:20:27 GMT -5
I've seen an uptick in discussions in my work circles and on SM about virtual salaries being based on a location's cost of living.
This is now being brought up quite a bit for those in Colorado with the new pay equity act. Companies that have virtual roles are opting to not post these roles for Colorado based candidates because they'd have to put a salary range. One excuse brought up frequently from these companies is that their ranges are based on COL in the candidate's city, so to avoid issues, they just won't take CO candidates.
Of course, this hurts the Colorado workforce because they are now being cut out of tons of job opportunities, but the bigger question being asked is: Why are there differences in pay for the same job in another state? With a large set of the white collar/tech jobs going to virtual (full or partial) after the pandemic, people are asking why their work is considered less valuable if they live in Nevada vs. Wyoming vs. California. Why would a company pay for someone in a HCOL area if they could get 2-3 people for the same amount in a LCOL, essentially hurting the communities in big cities like SF or NYC who helped to build some of these tech giants?
Just another thing to consider in this new world of WFH.
So the idea of remote positions has come up a lot in my office in that personnel think it would be easier to recruit for some remote positions where there may be a bigger workforce.
The government has stated that remote positions are based on location of residence, not employment. So it messes with the payroll budget to try and recruit from the DC market for offices located in Missouri or Texas, where pay would be lower.
Obviously other companies may not have the same budgetary constraints at the Government, but it's a huge issue right now.
Post by Velar Fricative on Jun 14, 2021 12:39:11 GMT -5
ssmjlm, by September everyone is supposed to be back onsite full-time but our organization (a large nonprofit funded heavily with public funds) has said one of the many reasons they’re not moving forward with remote work is because of the payroll issues that would come up if you have staff all over the place. Even for the occasional remote work we can do, we’d still have to live in about 5 or so particular states.
This is interesting and one of many reasons that I’m not sure 100% WFH is going to be as prolific post-pandemic as many think/hope it will.
Yeah, it will be easier for larger businesses who already have established nexus in the states employees want to work remotely from. Less so for smaller business that haven't established nexus in many or any other states.
I have a friend here in New England currently in the application pipeline for a remote job for a CA company, and she said the salary is based on a CA cost of living, even though COL is definitely lower here.
I had never thought about this issue before, but it's really interesting how different companies could handle it differently and competitively.
Post by goldengirlz on Jun 14, 2021 12:57:16 GMT -5
Well, you’re making a few assumptions around workers being more or less interchangeable, but that’s not necessarily true.
My H is an example of someone who actually makes less living where we do. He gets job ads all the time for positions “short three-hour flight to major metros!” offering $350k+. Not a lot of people want to live in the middle of nowhere, especially highly-skilled individuals and young people (particularly if they don’t have ties to the area).
Someone in New York might command more money than someone in Chicago, but I question the premise that companies in NY are going to be replacing each New Yorker with three people from Kansas with the same skill set. And the truth is, many large companies have already done that where they can (I know my company, for instance, has many of its back office roles concentrated in one of our cheaper COL locations.)
This is interesting and one of many reasons that I’m not sure 100% WFH is going to be as prolific post-pandemic as many think/hope it will.
Yeah, it will be easier for larger businesses who already have established nexus in the states employees want to work remotely from. Less so for smaller business that haven't established nexus in many or any other states.
Will this hurt some of those smaller businesses, too? Even if I take a pay cut going from LA to say.. Wichita Falls, TX, my company is probably going to be far more competitive in salary than a local business or one that solely operates in Texas.
Plus side- I bring more buying power into the community. But that also has a list of other consequences like driving up property values for those that can afford it, hurting the low income workers in the area.
I’m interested in seeing how this all shakes out. I live in a fairly LCOL place. It’s hard to get good talent to move here because most people don’t want to move to Iowa. Opening up positions where companies could pay good talent to work remotely at a wage that is adjusted to COL for their city would be a benefit to some companies.
But on the flip-side…I have a friend who is going out to CA this week to finalize working remotely for a company out there at CA wages (which are unheard of here). No smaller company in our town will be able to hire someone local at IA wages if people can get CA wages and work remotely.
I think this is going to be quite a mess for awhile.
Well, you’re making a few assumptions around workers being more or less interchangeable, but that’s not necessarily true.
H is a doctor and actually makes less living where we do. He gets job ads all the time for positions “short three-hour flight to major metros!” offering $350k+. Not a lot of people want to live in the middle of nowhere, especially highly-skilled individuals and young people (particularly if they don’t have ties to the area).
Someone in New York might command more money than someone in Chicago, but I question the premise that companies in NY are going to be replacing each New Yorker with three people from Kansas with the same skill set. And the truth is, many large companies have already done that where they can (I know my company, for instance, has many of its back office roles concentrated in one of our cheaper COL locations.)
First, many of the assumptions made in my OP are from conversations in my work circles. Everyone in HR is trying to guess what is going to happen and we truly don't know how it will eventually shake out.
Growing up in a small, rural town, I know it flows both ways. They even had a campaign once to try and bring some grads back home after college because there was such a shortage of skilled workers. I don't think it worked well.
This is interesting. I am in Hawaii and a lot of companies don't hire out here. For example Amazon isn't available for remote work at all here. My friend worked for them on the mainland and had to quit when moving here because it was absolutely not an option. I would love a WAH job but between the time difference and that I haven't ever been able to find anything workable.
This is interesting. I am in Hawaii and a lot of companies don't hire out here. For example Amazon isn't available for remote work at all here. My friend worked for them on the mainland and had to quit when moving here because it was absolutely not an option. I would love a WAH job but between the time difference and that I haven't ever been able to find anything workable.
are there any opportunities that take advantage of the time difference? Dh always talks up moving to New Zealand because there are American telepsychiatry jobs based there that want people who are working what are night hours in the US.
Post by ellipses84 on Jun 14, 2021 13:32:53 GMT -5
I wonder if companies could start using a COL adjustment for housing costs like the military does (although I think that also typically accounts for number of dependents, which I don’t think private sector should do). Like, your salary is $100k everywhere but if you live in HCOL you also get $3k/mo. for housing, so $136k/yr but in MCOL you get $2k/mo or $124k/yr.
There’s lots of other variables for COL like income tax, sales tax, property tax, insurance, gas prices, etc. but some are up or down and it doesn’t all have to do with HCOL or LCOL. You could argue medical benefit options have a huge impact on take home pay and people ultimately have a choice in where they live and how much they spend on living costs (ie, living in a multigenerational house or a studio apartment vs. SFH). As for higher paid remote workers hurting the economy, I think it will be better for the US economy to spread them out and not end up with places like Silicon Valley that aren’t sustainable because service workers or teachers can’t afford to live there.
My worry is that it would be an excuse for varying pay so women and POC would not receive equal pay and it would be harder to prove.
Well, you’re making a few assumptions around workers being more or less interchangeable, but that’s not necessarily true.
My H is an example of someone who actually makes less living where we do. He gets job ads all the time for positions “short three-hour flight to major metros!” offering $350k+. Not a lot of people want to live in the middle of nowhere, especially highly-skilled individuals and young people (particularly if they don’t have ties to the area).
Someone in New York might command more money than someone in Chicago, but I question the premise that companies in NY are going to be replacing each New Yorker with three people from Kansas with the same skill set. And the truth is, many large companies have already done that where they can (I know my company, for instance, has many of its back office roles concentrated in one of our cheaper COL locations.)
First, many of the assumptions made in my OP are from conversations in my work circles. Everyone in HR is trying to guess what is going to happen and we truly don't know how it will eventually shake out.
Growing up in a small, rural town, I know it flows both ways. They even had a campaign once to try and bring some grads back home after college because there was such a shortage of skilled workers. I don't think it worked well.
Yeah, much has been said about people moving from the Bay Area but the majority are staying in the state or going to another city maybe one or two tiers down in COL.
So it’s not a mass exodus to significantly cheaper pastures. I don’t deny that there will be a certain degree of headache in adjusting salaries, but this sentence in your OP: “Why would a company pay for someone in a HCOL area if they could get 2-3 people for the same amount in a LCOL, essentially hurting the communities in big cities like SF or NYC who helped to build some of these tech giants?”
It’s not something I’m seeing (yet?) in my experience in Silicon Valley. Large companies have already found a way to exploit COL differences (and remember, we’re talking globally — not just in the U.S.) The workers who will continue to command top dollar are those they can’t find (in large numbers, anyway) in LCOL cities.
I'm in the government as well and we have a few people that work for our office that live in other states. They usually started with their office then applied for a remote HQ job or we recruited them for their expertise in the field. My supervisor is remote which is interesting. I'm not sure how much she makes, but she's makes the pay scale for her area not the DC scale. So considering she's the same grade as me, it's possible I make more than her.
I hope some day to be remote and when I do I imagine I'll probably have a pay cut since I won't be making DC money.
Post by steamboat185 on Jun 14, 2021 14:43:47 GMT -5
I’m CO based and work for a very large corporation. Per our handbook they do not do COL adjustments for anyone who isn’t hourly. I should be able to move anywhere in the US and have the same salary.
With the new CO law we are currently not allowed to apply to any jobs outside of the state because they don’t want to list the salaries (even if there is no COL adjustment). It’s incredibly frustrating.
Post by aprilsails on Jun 14, 2021 14:51:09 GMT -5
Last weeks Freakonomics Podcast Episode #464 discussed this issue from three points of view. They talked to a variety of researchers. It was really interesting and showed that there are a lot of factors that go into these decisions.
DH is in high tech so there is a lot of flexibility already baked in to the job. DH just hired for a new position in England and the person has the ability to work fully remote in perpetuity if they want, but they also have access to an office. The only requirement from a location perspective is that they be within 1time zone of the British office, since DH has been managing the company from 5 time zones off and he’s sick of it. DH has access to an office here but will likely never go in again, although his job has shifted a lot during lockdown and managing the local office is now about 30% of his role. The other 30% of his job is with people in Minneapolis who are one time zone behind us. Most of his clients are in Silicon Valley.
He regularly has meetings scheduled from 5am - 7pm.. He turns them down and reschedules to limit his day to 8am-5pm. We really need to invest in making him a proper office in the front den. He’s sitting at our old dining room table, although he has a good chair now.
As far as remote pay goes he was just offered a remote job from an American company. It was effectively the same pay after conversion, for a lighter workload. Although no benefits plan and less vacation time. He turned it down because it didn’t make sense from a stepping stones to promotion perspective. With that job he could have worked anywhere.
H has been working for a fully remote business for almost 7 years- there is no headquarters and they have employees all over the globe. For them the salary is the salary- doesn’t matter where you live, but they are very competitive and probably more CA/NY based considering that’s where the higher ups are. If we wanted to take this salary and move somewhere with a way lower col we totally could, but we don’t want to. It could open up a lot of doors for people to move to more rural settings and still work in high paying jobs if they want to- especially if they want to be closer to family, home town, etc. I wonder how it will change the political landscape over time.
I’m CO based and work for a very large corporation. Per our handbook they do not do COL adjustments for anyone who isn’t hourly. I should be able to move anywhere in the US and have the same salary.
With the new CO law we are currently not allowed to apply to any jobs outside of the state because they don’t want to list the salaries (even if there is no COL adjustment). It’s incredibly frustrating.
I am a bit confused by the bolded part about "allowed to apply to any jobs outside of the state." How can a company not allow someone to apply to a position? This seems against the law to try and dictate how your current employees do or do not apply for internal or external positions.
Post by irishbride2 on Jun 14, 2021 15:45:07 GMT -5
We are seeing this happen already locally. Our school is having a major influx of CA and NY people who are now all virtual and can live anywhere. I think it will lead to some movement of people.
Post by downtoearth on Jun 14, 2021 15:55:25 GMT -5
I just read the law and I think this is going further away from the intent in this discussion and from how it's going to affect people in CO with jobs to post (or remote work). It just has to include a salary range in the announcement - not the actual salary. You have to advertise the range... if you find a candidate that exceeds the requirements and needs higher pay for higher COL, you can go toward the top of that range or even note in hiring that why it was outside of that. It's so that women and minorities who are already working for that company can see what other similar positions are being paid and talk to HR or others about wage disparity. Heck - I know several states we worked for as a private company (contracted to the state), we had to have our CEO sign an affidavit swearing that we did not have a women or minority pay discrepancy in order to just bid on jobs. While we hadn't been audited in the 7 years I worked on those contracts, I know the state does random audits and would request data to evaluate. So that seems similar to this law and equitable enforcement. That is happening in other states already under other equal pay laws, so it is not too new to HR who work in multiple states - I think I saw in one search that 30+ or up to 43 have similar acts.
These are what I read, so maybe the COL for remote workers is going to be a problem, but really in my state I've seen a salary range with "may include cost of living adjustment based on location of remote worker" as included, so that would be in line with the law and not a problem IMO. (not a lawyer, but works in CA, MT, and WA that have similar laws).
I’m CO based and work for a very large corporation. Per our handbook they do not do COL adjustments for anyone who isn’t hourly. I should be able to move anywhere in the US and have the same salary.
With the new CO law we are currently not allowed to apply to any jobs outside of the state because they don’t want to list the salaries (even if there is no COL adjustment). It’s incredibly frustrating.
I am a bit confused by the bolded part about "allowed to apply to any jobs outside of the state." How can a company not allow someone to apply to a position? This seems against the law to try and dictate how your current employees do or do not apply for internal or external positions.
I might have misspoke. If you are planning on leaving the state you can apply, but every job posting states- residents of CO are not eligible to apply. It’s because they don’t want to post the information required (salary, benefits, and bonus) now legally required by law here. Edit- we met with friends who work for other large companies and at the moment it seems to be a pretty common move by companies. We’ll see what happens long term.
I am a bit confused by the bolded part about "allowed to apply to any jobs outside of the state." How can a company not allow someone to apply to a position? This seems against the law to try and dictate how your current employees do or do not apply for internal or external positions.
I might have misspoke. If you are planning on leaving the state you can apply, but every job posting states- residents of CO are not eligible to apply. It’s because they don’t want to post the information required (salary, benefits, and bonus) now legally required by law here.
I might have misspoke. If you are planning on leaving the state you can apply, but every job posting states- residents of CO are not eligible to apply. It’s because they don’t want to post the information required (salary, benefits, and bonus) now legally required by law here.
Huh. What are they hiding?
I wonder too, but I’ve spoken to friends who work for other large companies in CO and it seems to be a common tactic. My DH works for a large employer that is mainly based in CO and it’s interesting they’ve seen a lot more internal moves than normal and I’m guessing it’s because people can see the ranges.
This is interesting. I am in Hawaii and a lot of companies don't hire out here. For example Amazon isn't available for remote work at all here. My friend worked for them on the mainland and had to quit when moving here because it was absolutely not an option. I would love a WAH job but between the time difference and that I haven't ever been able to find anything workable.
are there any opportunities that take advantage of the time difference? Dh always talks up moving to New Zealand because there are American telepsychiatry jobs based there that want people who are working what are night hours in the US.
So one of my friends here is a doctor for a hospital system on the east coast. Theres a few of them here that do telehealth and radiology? I guess it's cheaper to pay for them out here vs paying a shift differential to have those areas staffed 24/7 in person. But no I don't have any good skills like that. I don't know really anyone else here that is able to WFH.
I might have misspoke. If you are planning on leaving the state you can apply, but every job posting states- residents of CO are not eligible to apply. It’s because they don’t want to post the information required (salary, benefits, and bonus) now legally required by law here.
Huh. What are they hiding?
According to the lawsuit I posted in the OP, it's mostly just burdensome to the HR staff?
To me, it would just make more sense to jump on the "trend" now, publish all your jobs with salary ranges, and then be in front of it all.
H has been working for a fully remote business for almost 7 years- there is no headquarters and they have employees all over the globe. For them the salary is the salary- doesn’t matter where you live, but they are very competitive and probably more CA/NY based considering that’s where the higher ups are. If we wanted to take this salary and move somewhere with a way lower col we totally could, but we don’t want to. It could open up a lot of doors for people to move to more rural settings and still work in high paying jobs if they want to- especially if they want to be closer to family, home town, etc. I wonder how it will change the political landscape over time.
ME TOO.
This is one of those residuals that I'm hoping would work in favor of the left. lol. Even if people moved just right outside a major city for COL purposes, some of those counties are very red areas.
Post by rupertpenny on Jun 17, 2021 9:41:18 GMT -5
A person's work has the same value to the company whether it was done in NYC or rural Oklahoma or something. I think it is disingenuous at best for a company to give someone a pay cut based on location if the work being produced is the same. I know some people move certain places for purely financial reasons, but I don't think NYC would empty out if everyone could make the same money working remotely from somewhere much cheaper, I know I wouldn't leave.
There are definitely a lot of complications and things to consider with the explosion of remote work, but at the end of the day the if the same work is being done the same compensation should be given.
A person's work has the same value to the company whether it was done in NYC or rural Oklahoma or something. I think it is disingenuous at best for a company to give someone a pay cut based on location if the work being produced is the same. I know some people move certain places for purely financial reasons, but I don't think NYC would empty out if everyone could make the same money working remotely from somewhere much cheaper, I know I wouldn't leave.
There are definitely a lot of complications and things to consider with the explosion of remote work, but at the end of the day the if the same work is being done the same compensation should be given.
The work has the same value, but if they’re able to attract talent from a LCOL area, they can pay a lower salary for that business value.
So if they need an employee to build 400 widgets a month, they need to pay a NYC local $80k, but they could get someone equally qualified in Alabama to build the 400 widgets for $60k. Win-Win for the business to save $20k and the Alabama employee to get a job that may pay more than their local market.