With remote work plan, Facebook dashes hopes of paycheck arbitrage

Yep. With these "cost of living adjustments" it's almost always a better move long term to live in the higher COL area, especially if you are living inexpensively and saving the vast majority of your money. I save more per year than I would gross working as an engineer near my hometown...

Although I will say, person B in your scenario has potentially more upside on their housing equity, and they do potentially get a higher standard of living short term. Of course, there are aspects of standard of living such as public transportation, good public schools, people in your area you'd like to date/be friends with that person B may not be able to buy.

This is absolutely 100% true. And people considering the pros/cons of high COL+high salaries vs low COL+a lower salary should very much consider this when making their choices.

And it's not just about the cost of housing. That $1000 phone you cary: it'll be a higher % if your salary if you go for the latter choice instead of the former. Same thing for many many other purchases you will want to make.

I find that people don't think about this enough. To their detriment.

Bingo. In a high COL area, you have the option to retain a significant surplus of your exchanged labor if you trade off COL for inconvenience, which adds up to compounding gains over time. And as your thought experiment proves, the real move is to relocate after a substantial tranche of that money has been earned, at which point the lower earnings are no longer as much of an issue.

Another way I've been thinking about it over the past few days is that this also makes side project optionality significantly more attractive. If you can make a side project that makes XX% of your BigCo T1City pay, the point at which you're making top 50% percentile low COL MRR could become significantly lower than if you planned on remaining at that BigCo in BigCity forever.

You’re not taking home a pile of cash without paying a ton in taxes. That’s why you see more homeowners in the Bay Area renting rather than selling.

Traditional economic theory should handle liquidity in pricing.

That is it would be a weird market where prices were artificially high for houses you couldn’t sell quickly. The price would just lower and the rent should follow.

I’m experienced enough to believe markets don’t follow traditional models, but in this thought experiment at least liquidity isn’t an interesting new unknown variable.

To answer your thought experiment: salaries aren't dictated by justifications or fairness.

Silicon Valley firms don't pay high salaries because employees have to pay a high cost of living, they pay the high salaries because if they don't, some other company will pay it and the employee will leave.

They pay the salary that they need to get people to come work. The cost of living is an OUTCOME of this calculation, not the input. The CoL is lower in Morgan Hill because people living there have to commute further to get to their jobs, so fewer people want to live there. You can figure out the price people put on commute distance by comparing housing prices based on distance from work sites.

The really interesting thing will be to see how CoLs in the country change when commute distance is no longer a factor in home prices.

I'm not sure that the example is similar to the current topic: rent is cheaper than Morgan Hill largely because it takes an hour to drive to lots of workplaces. People are choosing between paying higher rent in Mountain View and paying with their commute time in Morgan Hill.

It's arguably a different scenario from someone attending VC from their $400K, 5-bedroom mansion in Raleigh, NC.

What I don't get about these ideas is that isn't the factor "how much do you need to be in the office?" If you don't need to be in the office, why not just keep salaries the same and then you select from a larger pool of candidates (this should give you a pretty good pick, but you're still limited by when waking hours overlap).

If you only need to be in the office once a month, dock a little as now you have to cover travel and lodging.

It really seems like the factor of pay should be based on how important physical presence is, not on where the person is. Because otherwise I don't see it as a rational thing for a headquarters to be in SF and an employee in Arizona to get paid less than an employee in NYC. There's more advantages for the company for having your employee(your average programmer, at least) be in AZ rather than NYC. You need them in the office? A whole lot easier/cheaper to get that AZ employee there.

Companies pay as little as they can get away with. Fair enough. But when their workers are remote, those companies are competing with every other company that's willing to hire remote workers. On the other hand, SWEs are notorious for accepting low pay. So in summary.... who knows how it would shake out?

> Would it be reasonable for them to adjust salaries depending on what city an employee lived in?

Companies pay people less in LCOL areas because the local competing offers they receive are lower and they don't have to pay as much to outbid the competition. Not because they actually care about how much you're paying in rent. If two suburbs are in the same metro area, then they are part of the same local hiring pool so there is no reason to offer different compensation based on the average local rents.

Companies already effectively do this, but frame it as a perk for those who live close. IIRC Facebook and Palantir paid 10k to people who lived within 1 mile of the office.

Or better yet, what if they moved to Stockton? A 1-bedroom's $1200/month there, and it's still technically within commuting distance from the bay area.

Everything is factored in the real estate price: the weather, the school district, the night life, the ethnic grocery stores, crime rate etc. and last but not least, the opportunity to change to a new job with much higher comp.

Real estate, while not as liquid as stock market, is quite efficient in my opinion.

The rational way to do this would be for Facebook to take into account COL when setting salary for non-remote work, and to not take it into account when setting salary for remote work.

Why? Because if they are specifically trying to fill a spot in Menlo Park they are going to have to pay enough to attract people who live within commuting distance of Menlo Park. If they are trying to fill a Seattle spot they need to pay enough to attract Seattle workers. And so on.

If they are trying to fill a remote spot then they should be largely indifferent to where that person lives. For remote work they only need to set pay high enough to get the number of people they want from the entire country.

If they set remote pay at a level that makes them attractive to people in Georgia but not to people in Connecticut, and at that level they can find all the remote workers they want, why should they care that Connecticut engineers aren't applying for remote Facebook jobs?

Honestly my whole life I have basically been rolling my eyes whenever people complain of discrimination. "Why would a company pay more for less? They'd be eaten alive by competitors that don't". But here we have the whole industry saying they are gonna pay people less based on nothing more than living in black neighbourhoods. And gloating about how people don't have negotiating leverage.

It's making me rethink a lot of things.

It's not actually based on CoL... it is based on comparable salaries in the area (which of course is highly correlated with cost of living). The distinction is important, though; they pay the salary that gets a worker to stay and not go to another company that will hire them.

Companies, and many agencies in the federal government, already do this..

As long as the same policy would equally apply to all races, there is nothing wrong with making COL or salary adjustments based on where an employee moves.

And how exactly is that different than the current low salaries in Georgia compared to Connecticut?

Nah. Pay is, and will continue to be, based on market rate. If they offer you 150k in Georgia and that's near top of market for your skill level, even though if you were in SV you'd make 250k, then you're still being paid well. No discrimination. If they offered a black person 150k and a white person 250k for the same job in the same place, that's discrimination.

It's not like these companies are dumb. They'll factor the diversity coordinate into their equation.

So is this the salary and redlining counterpart of the BoJack episode where they finally decide how to fix the gun and drug problem in America?

> The lawsuits around this are going to be amazing.

No. They won't. This isn't anything new. GitLab as a company does this. My company does this. US Federal Government does this. It's not controversial. HN is the one making it controversial. YOU are making it controversial by bringing race into it.

If you have clear salary bands ("SWE III makes base 100k to 150k") and clear location bands ("NYC is 35%, Westchester County is 29%, Monroe County is 8%) then it's completely fair.

> And how does Facebook decide what the cost of living in your area is, anyway?

You could use the same scales the US Federal Government releases. You could base it on the average cost of living. Lots of data-points. Every state and local government collects this data for various reasons. Hell, Walmart and other large Grocery Stores most likely do this as well to localize prices properly.

This right here is the way to deal with the problem. Lowering a salary should only happen if someone is a fuckup or reduces the amount of work they have to do. Doing it over time like this is super classy.

This sounds great but I wonder how much of that was employer's discretion? I imagine your work was that valuable but perhaps a less productive engineer might get a different "package".

Regardless of the rational and pragmatic reasons behind salary adjustments for cost of location adjustments, a double digit X% cut would be very demotivating for most people psychologically.

This is what everyone I know does but that's because they're all smaller companies and each individual is pretty valuable. At Facebook, each individual is just a statistic at the margin. They cease to operate as individuals and more as a market for lots of labour.

That can't be helped. If I had a 100k size org, I wouldn't hesitate to set (overall) compensation targets at regional top prices with instant adjustment.

DeÄMPed: https://www.nzz.ch/schweiz/arbeitgeber-muessen-einen-teil-de...

In French: https://www.tdg.ch/teletravail-les-employeurs-doivent-dedomm...

Disclaimer: FB employee.

The company claimed that they don't see this necessarily as a cost-saving measure because they plan on providing for home office equipment for permanent remote workers, kind of like how employees going to the office have monitors and keyboards provided for them.

That is fair. If I'm using my personal car for work, I'm reimbursed. Same thing should be done for business use at home.

My increase in electricity and internet usage should be covered.

Not "just ruled", the decision is from April 2019!

Companies that require skilled labour don’t move to places with cheap labour. They move to places with abundant skilled labour that’s available at a reasonable cost. Or, they spend money training and equipping the available labour. There’s no way around it.

> So it has always baffled me that tech companies do the exact opposite.

The primary inputs to the tech industry, especially but not exclusively consumer software industry, are culture, trends, and of course software engineering labor. All of these predominantly generated by cities, and among those, the big cities of the world.

The inputs to auto manufacture are materials, skilled manual labor, and schematics. The schematics like software, are a product of culture, and trends, and engineering research, all of which are cultural objects predominantly produced by major urban hubs. That is why auto manufacturers still design their cars in cities.

That doesn't mean that software can't be developed remotely or in cheaper COL places. But its most likely be to be designed in proximity to major cultural centers.

Perhaps the location is only a side effect, while the true reason is the low supply of qualified coders. Why do corp lawyers command $400-600/hour? Why not to just hire a lawyer in India for $40/hour? Why not to hire a cheap accountant in Phillipines? Ah, right, the cheap options cost more in the long run and those who are competent have migrated to the US and now command the same 600/hour.

Automakers move manufacturing to cheap labor markets, pretty sure HQ and engineering are still in relatively prestigious cities.

> The obvious first argument is reduction in the standard of living would cause the talented to refuse. I'm sensitive to this, but also skeptical. People making 150 in Kingman would improve their SOL.

There are two problems with your reasoning here:

1. What counts as standard of living or quality of life varies according to the individual.

For example, the bay area has excellent weather, a ton of ethnic/cultural diversity, very solid restaurant scene, lots of interesting nature nearby to explore, the area around SF has passable public transit, some bits have decent biking/walkability, and there's excellent options for international travel. Never heard of Kingman, but based on it being in Arizona and cheap, it's probably substantially worse on all those metrics.

Sure, you'll be much more easily able to afford a nice big house in a good school district, and for some people that's of paramount importance. But not everyone; some people value the things I listed above more, and don't mind living in an apartment.

2. You also have to think about it from a long-term perspective. If you settle down in the bay area, yeah the housing situation is awful, but you don't have to worry too much about your particular company going under or treating you like garbage one day, because there are a ton of other tech companies you could switch to.

If you move to a random non-techie city where your current employer is the only employer of note, then that means settling down there puts you in an awkward situation: you're now tied down to them. Switching companies may well mean moving again, which could be awkward if you've put down roots.

SV people are used to being able to afford a model S. Going to european level salaries (not being able to afford even a model 3) is going to be somewhat of a shock.

This is consistent with what major tech companies do today when an employee relocates (or are simply hired in a less pricey region).

Whether or not you agree that employees should be paid differently depending on cost of living where they reside, it isn't new.

When you sign an employment agreement, location is part of that agreement. If you decide you want to work in a different location than was agreed upon, that’s you indicating you want to amend the agreement.

Facebook isn’t saying: “you have to move and these are the terms”. Facebook is saying, “if you want to move here are the terms”. If you don’t like the terms you can always stay put or find a new job with terms you prefer.

Is it also a dick move to raise someone's salary if they relocate to a more expensive location but stay in the same role? (This is super common with international transfers, for example)

You pretty much have to do this if you want to maintain different salaries in different geographic reasons. Otherwise people would be highly incentivized to move to SF/NYC for 6 months to get hired then move back to their cheap COL permanent location.

What's the alternative if you're going to scale salary based on location while hiring? If you only scale while hiring, you'll encourage people to "move" to Silicon Valley for a month or two, then "move" back to their original location. There would be an enormous financial incentive for that behavior.

In some countries (at least in The Netherlands), it's also plain illegal to lower one's salary based on just location. In fact, over here lowering salary in general is difficult to do. But this being the US, I suspect it won't be much of an issue for Facebook.

It isn't a dick move. Your salary isn't just determined by your performance. It's also partly determined by your cost of living.

This is how prices are set. If you think labour is "value added less some employer fair cut", think again.

This also feeds directly into high land costs making industry less competitive or even infeasible, requiring for example offshoring.

This entire thing is quite interesting. For example you might want to live in the middle of nowhere out of choice, however it might be more economically beneficial, after you subtract rent costs, to live in a suburb or near enough to a major city to qualify for the higher pay due to the higher median salary. Or it may be the inverse, getting too close is a problem. Part of this would depend on how FB choose to compute this.

Nobody is having a salary cut forced on them.

People are free to continue operating in the same capacity they were when first offered the salary (working in SV office). If they want to change that, then they are renegotiating the terms of employment and hence should expect salary adjustments.

but... you can see people gaming it though

Claiming residence in SF or NYC during the hiring process, then starting working somewhere else...

The best way about this is for FB to split the difference. Eg. if your average tc is 300k in SF, and it is 200k in North Carolina, if you decide to move there, you will be slotted down to something in between so it becomes a win win.

It's Facebook. You already know they use hundreds of sources of information to track and categorise people. Zuckerberg and CNBC just mentioned two.

That said, I expect you can fool Facebook for a while with high probability. You might need to commit fraud and/or tax evasion to do so, so that raises the bar.

You would also need to avoid any and every other way of revealing your location.

Almost. Apps check if a phone is jailbroken, so that needs to be dealt with too.

It's also tax fraud unless you fix that part.

Sounds hard

Unrelated to the topic, but you are making a good decision.

Cost of living in London is not too different from SF, but FAANG salaries are still ridiculously high here and quality of life is considerably better.

You'll have less savings, but you'll enjoy life more.

Exactly, it's based on the local market's cost of labor. I'm curious about this topic - are developers cheaper to hire because there is an oversupply of them or an undersupply of jobs?

>That is not because it's cheap to live in London (it's not) but rather because it's very very cheap to hire developers there.

lol those are exactly the same thing

Given Fb has offices in many states, couldn’t they simply “transfer” you to the state closer to your home, instead of keeping your base in California?

California has no say over what FB pays its employees in Ohio.

Companies like Buffer do this too: https://buffer.com/salary/content-marketer-3/average/

Great sentiment, but it's just not a workable position.

These guys have massive resources at their disposal, and they will crush a handful of 10x'ers if that's what it takes to get what they want.

For goodness sake, Facebook has a bolo list complete with real-time location tracking. Writing "F--- you, Mark" will land you on that list [1]. They view themselves as a quasi-government [2].

If we don't act through Congress to control powerful groups like Facebook, our personal and professional lives will be less free and less fulfilling.

[1] https://www.cnbc.com/2019/02/14/facebooks-security-team-trac...

[2] https://www.vox.com/the-big-idea/2018/4/9/17214752/zuckerber...

Some people are competing with local labor. Others are competing with global labor. Which situation benefits you strongly depends on your ability to demonstrate value to the employer.

It isn't just supply that is global but also demand. If you demonstrate exceptional value relative to supply globally, then buyers of your skills must also compete globally.

True that they cannot limit you. Except working at a FLiNG company what I have noticed is (sadly) they dont really think much of talent unless you are a brand name (creator of any obscure framework we are stuck with and cannot get out of). Reality is given the normalizing nature of our interviewing processes (leetcode puzzles) without a Brand, a dev (regardless of experience) in the bay area is qualitatively "same" as their counter parts outside - except BA ones are a fair bit costlier.

So much this. There's companies out there that value output at what you're worth, regardless of where you live at. I'm almost certain that Facebook is one of those companies — when it comes to high output employees. Negotiate.

> Live wherever you want and demand whatever salary you think you're producing at. If FB wants to leave high productivity labor on the table, let them.

You need leverage to make demands and the best way to have leverage is to have competing offers with similar or higher numbers. If more higher paying companies are open to remote work, then you can play that game, but if your only competing offers are from local companies who pay crappy non-tech-hub salaries then Facebook is just going to call your bluff when you ask for more money. It's still an open question how the future is going to pan out.

Yep! FB can’t pull this shit once you have other offers.

Where I live, even $15 per hour is considered a decent salary for a mid-senior engineer. I know for a fact that I'm on the same level as engineers in the valley, both in hard and social skills, up to the accent and culture tropes – but I'm still here because I never wanted the H1B hassle (especially without a degree).

Every time I read comments like yours on HN, I become more and more hopeful about my future. I'm not in a bad place right now, that's for sure – but it looks like it's going to get a lot better.

How do you handle promotions and negotiating raises? I'd be concerned about the long term effect if I went remote. The bay area is expensive, but a 50% or 100% increase in compensation seems possible. That only seems possible in areas like the bay, Seattle, or NYC.

Why not just live in SF?

Consider the "severe ramifications" that Facebook would be facing if they are reporting income for a worker in California when the worker has decided to move to Montana.

I didn't read that statement as referring to ramifications from facebook, but federal and state tax agencies.

As someone who grew up near Cupertino, these "scams" have been going on at least since I was in middle school decades ago. One of my classmates rented a small trailer at the top of the hills that was just technically in the school district. It didn't even have running water.

Worth pointing out that if you lie to your employer and get caught probably the worst that can happen is you get fired.

But if you like to the government and get caught you can go to jail.

I saw similar scheming in DC Metro for high school sports. Live in high school X's area, but their basketball team is terrible? Rent the cheapest apt possible in high school Y's area and send your kid there to play ball. For a select few kids, it was worth full-rides at Big State U, so I can't hold it against them.

The cost of living scaling doesn’t cover the entire salary. Only about 30% of my salary goes towards cost of living, more than half of it goes to savings. If my salary was scaled from Seattle to Spokane levels, my savings at retirement would be enormously impacted.

That sort of cost of living also doesn’t account for a huge amount of other things too. Having a holiday in Bali costs the same whether you depart from Spokane or Seattle (probably slightly more departing from Spokane actually, when you account for transport from Spokane to SeaTac). Buying a new 4K big screen costs the same in Spokane as it does in Seattle. Living in Spokane doesn’t make your kids college cost less either.

The cost of a new Tesla, toilet paper, or chicken is not twice as much in Seattle. This is basically true for housing only

> Here in Washington, a Seattle salary of $150k is worth around $315k in Spokane. And that's in the same state.

Spokane and Seattle are on opposite sides of the state - 280-300 miles apart. I don't get what you're trying to get at. The distance is large enough to go through multiple states on the east coast. I don't think it's really an apt comparison since the two are nothing like each other. You could make this same comparison in CA with a SF Bay Area salary and even less distance apart. Here's one for you: https://www.bestplaces.net/cost-of-living/redding-ca/palo-al...

Sounds about right. You'd have to pay me at least $150k extra before I'd consider living in the 8th circle of Hell, Spokane.

So this depends on how they compute this. If it's not that granular you might be able to live in a low cost location that is ranked as a higher cost location by the FB "salary grid".

Having that grid information would be very useful to an individual when negotiating.

Eh, I've heard people predicting the end of tech in California for YEARS. Hasn't panned out, and I don't see it changing anytime soon. Kind of reminds me of the people who say that China's economy is a house of cards and is going to implode any day now. They've been saying it for decades and nothing has happened.

Wonder how that pays off for them in terms of hiring. Last time I was looking for a job, I put them near the bottom of my list because of the location-based scaling.

I wonder how you figure what counts as "Seattle," for instance. Does Tacoma count? It's a 40 min drive - people do commute to Seattle. Or is Tacoma under "everywhere else, WA"? It's a $50k/yr question despite the CoL difference not approaching that.

Yes, they're very open about how they descriminate and earn more off employees who live in cheaper areas... It's a very weird stance to take and always infuriated me. They adopt a policy of radical transparency in their descrimination. Quite shocking too in the amount of pride they take in it, truly the market leaders in virtue signaling and disonnance.

And for those who don't think there's a better way, take a look at Basecamp or Zapier's salary policies.

this is very interesting.. backend engineers get paid more than front end at the same level.

some of the location multiplayers makes the roles completely insane, scotland for example.

digging into this, it doesn't seem to adjust for CoL but competitiveness of the market. Seattle and NYC have the same salary bracket, but NYC is by far more expensive. Nerd Wallet claims the city is between 37% to -6% more expensive depending on where you live (Manhattan vs Queens)

>Don’t be entitled

Because you want to maximize your earnings based on the value you bring? LOL..

If they make more working for Facebook in Detroit than for a a Detroit-local tech company, and they will, it's hard to say who's harmed here.

Of course there's gray area here but I think it will be fine. They won't be the first company with localized salaries.

Probably. You can get a 2br apartment in Detroit and Ann Arbor for half the cost of a 1br in San Francisco.

This is essentially what Delaware C-Corps do in order to avail themselves of regional regulations.

From the article:

"Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN. Facebook also uses its own apps' to track employee locations"

Allegedly because:

"Employees who attempt to wiggle around those compensation adjustments will be subject to “severe ramifications,” he said, as the company needs to account for employee locations to avoid violating tax laws."

This would be a spectacularly bad idea. Renting a PO box (or other front address) in a high cost location such as SF or NYC is going to open you up to tax liability there. At the same time, your actual legal state of residence is also going to want their share. You might get lucky, with your state of residence giving you credit for taxes paid in another state. But that’s not a given. Federal plus multiple states tax returns are a PITA.

But the biggest reason not to do it is that you’re presumed to be local: How many times are you going to “enjoy” paying walk up airfare from Raleigh Durham to SF because you need to give an in-person presentation the next day and you were assigned because you’re the only person on the team who isn’t remote?

Generally speaking, trying to scam the taxman unless you wealthy enough to hire people to find loopholes for you is a really, really bad idea.

With all the spying^H^H^H^H^H^Hdata mining Facebook does, I think they can figure out where their employees are located.

Or maybe virtual airbnb with onsite vpn ip per unit in the residential area split across different employers?

> Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN.

bundle that with a VPN as well.

The IRS cares where you’re working. Facebook (or any employer) has to report it accurately.

I would also like very much to pretend to be working from Washington and pay no state tax, while living in California.

I can only be in one place at a time, so my displacement power is constant.

Actually I hadn’t thought of this.

How far do you have to move to get a salary adjustment? There are very cheap places a 2hr drive from SF. If you move to Vacaville, does that lower your salary?

I don't think high income individuals will try to save a few $ and live in a high crime neighborhood with no hipster 10$ coffee in sight.

What state(s)|countr(y|ies) do you report as your location for tax purposes?

Working for a New York State-based employer is interesting in this regard. NY demands income tax when telework is not for the benefit of the employer. Depending on where you are working and what the tax laws are, you may be paying two states income tax.

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf (PDF)

There's a thing called being a tax resident.

For example, at the country level, I'm currently working remotely from Spain. If I stay here longer than around 6 months, I'm considered a tax resident and then I should pay taxes.

If you're planning to start working remotely from another country, you should know that the USA requires US Citizens to pay taxes anywhere they live. You should also know that some states require you to pay taxes wherever you live. For example, California has the highest state income tax in the USA, and it (tries) to tax CA residents even when they are not in the state. If you leave your nice Palo Alto apartment to work remotely for Facebook from Da Nang in Vietnam, you'll be paying USA taxes, and possibly California taxes.

If you don't know what terms like bona fide resident & physical presence test are, it is (in my opinion) very much worth talking to a talk professional to understand what your tax liabilities are if you intend to change your physical location to work remotely.

If you wanna go down the rabbit hole, start by looking up the foreign earned income exclusion.

You have to pay taxes in whatever state your van is located. If you work in multiple states, you have to pay taxes in multiple states. Athletes have to pay taxes in every state they play. If they played in one game per state in 25 states. They have to file 25 different state tax returns.

Knowing FB, probably. You only get to keep your high salary if you're spending most of it.

I presume there won't be an adjustment based on which specific city you're living in but more based on the general region. The Bay Area will likely have the same salary band all around regardless if you're in Oakland or Palo Alto. After all - once you do that then where is the line drawn? For instance, some areas of Palo Alto are much more expensive than others.

Maybe they should start scaling based on how much rent you have to pay. ;)

This is an extremely important point. Everyone will rush to the cheapest part of the most expensive areas.

Well, living with your parents is, of course, going to save you a lot of money. But you're living with your parents. I do wonder about the opportunity for fraud, though. I bet a lot of young developers will, all of a sudden, start living in their parents houses.

Possibly, but I suspect the pain would be less if they suddenly started making 200% more money.

BATNA -- "best alternative to a negotiated agreement"

Employers definitely need to know where you live to pay myriad of payroll taxes. if you lie, you commit tax fraud. It’s true virtually anywhere in the world - including all countries in Europe, not just US thing. You can often skirt law if you are small enough though - nobody cares about random web designer on upwork.

Given that the difference between cost of living between the most and least expensive places in the US is in the $40,000 range, and salary drops are occasionally upwards of double that, no, the scaling is not proportional.

For example, I live in Montana. Most COL adjustments say that I'd need about $40,000 more a year to maintain my current standard of living, yet equivalent positions get about $100k to $150k more a year. If one of those poor folks in SF making $250k a year now wants to move to Montana, they can easily expect to be making $150k or less after they move.

Exactly. A more serious move would be "I'll cut everyone's pay by 20%, now go to live where you want instead of spending insane amounts in rent here".

> unskilled replaceable commodity

That's a weird way to look at "we pay you X because you'd work for someone else otherwise". There's a middle ground between that and "we pay you X because you create Y value for us".

Or in other words, if they have more people to choose from for a position (due to location being less of a limiting factor), they will be able to find someone accepting a lower wage. This is deeply unsurprising to me and has nothing to do with how skilled the labor is.

Does the value you create for the company depend on location?

I don't think it's fair for businesses to extract more profit from me because I live in a cheaper area than my coworkers

The change in salary is not in proportion to the change in an employees cost of living.

FB (and other companies, in all fairness) is saying "If the COL is half that of SF, your salary will be cut in half". Whereas the employee is looking at "I only spend 50% of my salary on living, the rest goes to paying off loans and investments", which results in a net loss in their after-COL loan payments and investment opportunities.

>they increase the salary if you move to a more expensive place.

At the moment, they increase the salary if they require you to move to a more expensive place.

Why will they continue to pay you more if it's no longer required?

what difference does it make to work you provide for them?

by your logic they should have full access to your bank account to accurately adjust salaries based on your expenses, you ride Tesla? here is bonus for you. you ride ford? bad for you...

it's none of the company business where I live if I work from home and provide same results like anyone else

salaries based on location make sense only with on site jobs where employer has to compete with other employers in area and potential employees with other employees in area. with no such thing at work from home, the offered salary should be fixed strictly based on productivity/results regardless if you are frugal or wasteful and to be able to attract the talent compared to other employers

> I would expect that they increase the salary if you move to a more expensive place.

lol

True but there’s a balancing dynamic in play.

Living in a high CoL area is an advantage to you because you win when paying fixed expenses and world rates.

Living in a low CoL area gives you an advantage because you will cost the company less and are more likely to get the job.

Big brain play is to find a company that has a policy like this and move up in the world.

I'm sure Zuck doesn't know the concept of fairness and would laugh if someone would explain it to him. Words that Zuck understands are "efficient", "justifiable", "profitable".

If you live most of your days in Missouri, you are a Missouri resident and you need to pay Missouri state income taxes, and maybe local income taxes as well. If you/your company is paying California income tax instead, that's a problem for both of you.

Many (most?) taxes are state and local, as most services are operated at the state and local level. The most obvious example that comes to my mind is unemployment. Each state has a different unemployment program, and every employer must pay in a certain amount for each employee in the state.

In addition to the domestic state payroll/income tax issues mentioned by others, it's almost certain FB is also talking about the risk of creating foreign permanent establishments of the FB US entity from an international tax perspective.

It doesn't. The employer is responsible for paying taxes on behalf of the employee, i.e. income and payroll taxes.

This is the case in most of the modern world...

A lot of states have payroll taxes, which the employer has to pay for each employee working in that state.

I read somewhere that they were talking about using the Facebook app itself to track remote employees whereabouts. Having trouble finding the reference right now though.

Yes, the location tracking (wether that be simply asking, or IP checks, etc) is mostly for regulatory compliance.

Salaries adjusted by region is pretty common. My employer does it. My wife's employer does it. Etc.

I don't know how the US works, but in Canada I've had jobs where the employer took no taxes off and I had to pay them myself at the end of the year. I loved it, I can understand why many can't handle it though but the increase in cash flow actually increases your investment opportunities short term.

If this is true for the US too then Facebook is full of shit and using this as a weak argument for why they have to know if you snuck out of the city to go live in a cheaper area.

> Facebook also uses its own apps' to track employee locations

Is this irony?

Nah it just means more gentrification in rich areas.

Anther exception being if you're a public sector employee, there are certain accommodations made for living in London: https://en.m.wikipedia.org/wiki/London_weighting

I work at FB, and yeah, I'm not too fussed by this. Lying about where you are working from goes under the "don't be a fucking idiot" category, and I don't have much sympathy for idiots making life harder for their colleagues. Re "threats", location tracking of company equipment is pretty much a necessity to handle regulatory issues w/ geographies under sanctions (want to be an even bigger idiot? lie about where you're working from, and move to crimea!). Beyond that, internal systems also react to your location to do things like change the timezone displayed in UIs, adjust notification preferences, etc. HR having access to that data would be entirely unsurprising - if you're trying to defraud your employer, this is already in your threat model.

A few days won't matter. However some states like New York have laws that if you're physically in state and working (remotely or otherwise) for more than 14 days in a year; you owe taxes on that income regardless of 'where' it's earned. And pretty much all companies that have people who travel around keep track of it so the taxes are properly reported and paid.

"You've been detected using NordVPN. You've been fired. Have a nice day!" - Push Notification from Facebook @ Home

Don't employees try to charge as much as possible? You're acting like it's a moral and ethical failure that Facebook isn't a charity

Reminded me of one conversation long time ago:

- We're offering you whopping 3.5%. How cool is that?

- Do I hear it right that you want my contribution to your company be 3.5%?

- Blank stare.

Well SWEs are plain old labor and they’re compensated as such because big tech (and startups) recognize the value provided by productive SWEs. They wouldn’t be paying those astronomical wages unless the returns were about as high. I don’t think anyone is rationalizing that it’s not labor; it’s well compensated labor. The current high compensation was driven by the market: senior engineers get poached by startups with similar base pay but higher equity, so FAANGs raced to match that. Keep in mind that some of the FAANGs themselves were startups not that long ago and used similar tactics to poach labor from other firms.

To address what you’re really getting at though: tech comp could absolutely take a hit if there is depression that hollows out demand for technology based products. It could happen if the unemployment persists for too long or if the Government stops providing Unemployment benefits. Remains to be seen.

> hell, a large portion of the SWE crowd is willing to distribute their labor /for free/ in the form of FLOSS

that's an incredibly un-nuanced view of the economics of FLOSS. even at just a first approximation, if you consider the existence of Linux as a "fully fledged" platform to be of economic value to you, then participating in the advancement of that goal represents participating in an exchange economy, not "distributing labor for free".

and there are other ways in which FLOSS developers receive benefits from their work on FLOSS, too numerous to mention here.

> a large portion of the SWE crowd is willing to distribute their labor /for free/ in the form of FLOSS

FLOSS can scratch a personal itch, like gaming or other hobbies, while also providing something for the resume. (Assuming it's not embarrassingly bad.) Still, I'm reluctant to release my personal work that way. Now I do encourage my employers to do it for non-core functionality because it will make my future life easier, no matter where I work.

I doubt middle america is going to benefit much from this. Once a company has bitten the remote workers bullet there are far cheaper alternatives that hiring a SWE in Ohio. There are huge numbers of highly capable devs right across the border in college towns in Mexico and farther south in multiple South American countries. All on US time zones and working at a fraction of the price of a US developer regardless of their location.

Huh? Have you been on Blind? SWE's know how the game works.

You're saying this like it's something new but _outsourcing_ has been a thing for decades. It has always been possible to get software built on the cheap abroad. You get what you pay for.

Working on FLOSS is nothing like working for a boss. The common denominator is git commits but apart from that one is a self directed pleasurable hobby and the other is getting stuff done for a business.

Coders want good money because they realise the value to businesses and if their good they realise how rare good coders are vs. gen pop of applicants.

We are far from coders on minimum wages.

Some non-compete agreements with binding-arbitrage by a employer-chosen arbiter. Employers will try to limit options for labor. Whether it's enforceable is another story.

This doesn't make any sense... if my city needs to raise money to pay for a new police station, who should pay for it? With geographic taxes, you can tax the people who live there and are going to benefit from the new station.

If we had no location based taxes, how would you raise the money? Would each city get an allowance from the world government (which would have to be the one collecting taxes, or else it would be 'geographically based')

I mean, this would require the federal government to step in and mandate the law, which seems to go against the American idea of smaller governments / letting the state decide. So you really have two options in the situation.

1. Federal government reworks the tax code and removes the ability of the state to control taxes.

2. State government maintains its ability to levy taxes which in turn means companies like Facebook have to know where people are working for the sake of taxation.

If someone chooses to live in a small town in the middle of the rust belt while earning wages far exceeding the local area, why should it be fair for them to avoid paying taxes to a city that likely needs them?

How would that possibly work without a world government?

I'm guessing people will live in cheap places that are considered to be in the same region as expensive places. For example: live in Tracy or Fairfield or Hollister while collecting a bay area salary. Or live in Vancouver, WA while collecting a Portland salary. The latter is especially enticing as Washington has no state income tax.

In the long term though, if companies go remote I don't see how they can continue to have salaries based on cost of living. In a hypothetical perfectly frictionless economy with perfect competition, companies that pay salaries based on the value contributed by the employee would be more efficient and outcompete those that paid based on the employee's expenses.

How can/will the employer check whether the stated location of its emloyees is correct?

This is indeed a complex categorisation. What really defines my location in relation to remote work? Since I’m not bound to one physical location anymore I can split my time between different places. I might move every 6 months, what then?

Become a contractor with a local office in Bay Area?

You can even rent a trailer in the Seattle area and hire lawyers to explain you how to game these rules in the most legal way. When 500k/year are at stake, employees will be very creative (and, afaik, they are hired precisely for their creativity and outstanding intelligence).

Agree with foreign destinations, but I assume any adjustment within the US will be a net negative for the employee since its mostly housing that impact COL.

A 1 bed in SF is $3,000 and say $1,500 in NC. That’s $18,000 post-tax or $24,000 per-tax.

If FB lowers your salary from $200k to $175k (not a big jump), you’re down a net $1,000 per-tax.

Yes, but in 5 years, who has the option in living in SF?

A nocturnal king, that has to work midnight to 8am to keep up with the rest of the team, if that’s your thing :)

I lived like that for a month (working on a fully remote company, but the majority of the people were on US timezones). It’s not for everyone.

What bout the tracking of phones and laptops? You'd have to have your laptop with a remote desktop software or something like that.. or to spoof the GPS and make sure you connect to an anon wifi that is not sharing its position.

Some friends of mine who live in NYC are actually considering "renting" their addresses for remote employees who get shafted like this.

From my perspective, it's the same as registering your business address in Delaware to take advantage of their low tax rates.

I would imagine that because the company is withholding (and reporting) tax at a state level, you'd have to end up paying tax in whatever state you were claiming to live in anyways?

Here is a prior discussion of this issue by dang: https://news.ycombinator.com/item?id=23286685

A moderation downweight simply lowers a post's position on the page.

Plenty of past explanations at the links I listed in this recent comment: https://news.ycombinator.com/item?id=23294867.

We don't have a public moderation log (see the thread alexpetralia linked to, or https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...) but we're happy to answer any particular question as it comes up.

(I've detached this subthread from https://news.ycombinator.com/item?id=23295278 to minimize the off-topicness at the top of this page.)

I don't think that's an accurate model of how flamewars work. The fire analogy is better: if you let them burn they spread. Worse, they evoke worse from others, and if allowed to persist, they lower the norms of the community. I'd throw the broken windows theory into this metaphor soup also.

(I've detached this comment from https://news.ycombinator.com/item?id=23295278 to minimize the off-topicness at the top of the page.)

Btw you're largely right about the discussion not being significantly different, and (more importantly) about that being the key thing to look for. This is not widely understood! However, my posting that and pinning it to the top of the thread did lead to a wave of comments about the SNI, which was the intent. Maybe the discussion will shift a bit in that direction.

I like that acronym, partly because it really is a specialized concept that deserves a pseudotechnical name, but mostly because it's fun to say "snee". SNI SNI SNI.

A company that obeys tax law?

I'm not being facetious. Companies face significant legal liability for not paying taxes correctly, and they have to ensure that all applicable federal, state, and local taxes are correctly being withheld and reported for their employees. They can't just look the other way and blindly allow employees to evade tens of thousands in SALT taxes annually.

Someone who wants to make 400k-500k and will do whatever (legally) to achieve that.

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.

If you think this is illegitimate wage discrimination I have a question for you, if you order coffee in bumfuck idaho, do you pay the barrista, who does the same work as one in Palo Alto, the same price for their coffee?

Salt Lake City and Boise are pretty liberal and both vote blue. Houston is overall pretty split, but has voted for a Democrat mayor for more than 30 years.

What "political preferences" are you suggesting Facebook is afraid of from that focuses on the 3 named regions?

Current employees moving to conservative areas would result in those places becoming more liberal.

Facebook's board and senior management doesn't seem to have a clear political bias from what I can tell. It would be bad for business if they did; a company that is ultimately seeking to attract the entire world onto its platforms needs to be able to operate across the political spectrum.

https://investor.fb.com/corporate-governance/default.aspx