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Comment by lykr0n | Hacker News Reader

> 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.

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> US Federal Government does this.

US FedGov location pay is based on federally-dictated work site, not where the employee resides. Adjusting salaries based on employer location demands is non-controversial, and based on different job requirements in

Paying people less because they live where lots of black people live (and race and other protected classes in US employment law do correlate with cost of living), when the employer requirements do not differ on whit, is not the same thing.

Yeah. It's based on work site, but they define down to the county what the location adjustment is. But the same thing could be used for remote workers. I strongly assume the remote work positions that exist would pay based on the county where the worker resides.

If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.

https://www.federalpay.org/gs/locality

> But the same thing could be used for remote workers.

It wouldn't be the same thing if it wasn't based on job-required worksite. They don't pay you based on where you live (which is quite often a different county than the work site), but where you are assigned to work. If you have no assigned worksite, as is the case with remote work, there'd be no basis for the adjustment.

> If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.

Super easy, yes.

Non-controversial, no.

Sure. If you're working from home your work site is where you live.

> Sure. If you're working from home your work site is where you live.

Unless your employer assigns your residence, it's not a difference in job duty.you are being paid for, so is not analogous to being paid for employer-assogned job site when analyzing disparate impact.

Never heard of a company punitively adjusting COL downward without being explicitly in contract, like with US Fedgov. Finance had people leave NY all the time for Midwestern and Southern states with the same company keeping their NYC paychecks.

I've not only heard it, I've been told.

"If you relocate from our San Jose office to our Austin office, there will be a compensation adjustment due to COL and prevailing market rate."

I don't think that's unreasonable.

I'm sure they make exceptions for those employees who they want to retain at all cost.

The employer deciding what "the market" is to set "market rate" to a conveniently lower number isn't reasonable. If you're hiring remote-first, you're not competing in a local market.

The employer deciding what they're willing to pay employees is eminently reasonable. Most of these companies are NOT going remote first, they're just _allowing_ remote work.

No, a dialog or a negotiation is reasonable. Deciding things for both parties is not reasonable.

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 knew I would before I moved (still worth it).

it's extremely common (I did some consulting and offices had salary multipliers based on high/mid/low-cost locations). I've been quite surprised at the reaction from HN on the topic

Common, but something in initial employment agreement. This sounds like it is being forced on employees. If so, thus my reticence to seeing this practice as acceptable. If not, my mistake.

It’s likely these employees’ initial employment agreement was to work on-site in the Bay Area office.

If they want to move away from the Bay Area and work 100% remote, they’re being offered that option - that’s a change in the contract itself, in their favor, which they don’t have to take if they don’t want to.

Maybe so. All depends on the agreements at this point.

Disclaimer: I'm a FB employee

What's being forced upon me? If I continue to work as before, nothing changes. Working remote full time wasn't an option in my initial employment agreement either, so it does not seem like that agreement applies to this situation.

That's my question ultimately. What the reporting sounds like is if you work from outside SV, even if fully remote, you are subject to an unagreed-upon wage reduction. Simply because a pandemic has forced employers to bend doesn't mean employees are forced to do so.

That said, I recognize the difference between ideal and practical reality of the situation. Employees at tech firms typically have little individual negotiation power, but an employment agreement typically can't be amended at the whim of one party. I'm not saying you see it that way, just an outside observer here.

There are no initial employee agreement terms being amended and I'm a bit confused on how it could be interpreted that way. The initial agreement still holds, but FB is extending an additional option that was not offered originally for the employee to change their location to work fully remote, at which point he/she would be subject to the wage multiplier based on market.

If you have to go into the office to work, and you get sick with the coronavirus, then you should sue Facebook.

And if you die, then your spouse should file a wrongful death lawsuit against Facebook.

Why? Because all that could have been avoided if Facebook allowed you to work remotely.

You can also claim that the patterns in the central air conditioning circulation, is what caused you to get sick with the virus.

It’s fascinating that the country is forcing people to go back to work, when the crisis is not yet over. In fact, it’s even more dangerous now, than it ever was, with the super high infection rate count.

It's not being forced on anyone. People are free to continue working in SV and presumably receive the same salary they were before.

If they decide to move elsewhere that's a substantial and meaningful change from the agreement they entered into for the job. Of course their compensation will change.

Facebook didn't hire engineers to work remotely.

What does your company do if the employee is entirely Nomadic? Officially I live somewhere, but I never go there.

Maybe pretend it's not happening, no idea. Societal rules don't seem to work well with people who are more nomadic—the settlers seem to have won

I feel this comment so deeply. I spent all of my late teens and early 20s doing music in the US. I lived in a van or on a bus and only went ‘home’ for a few weeks consecutively at the most, and that was maybe three times a year. The world is viewed in a fundamentally different nature by those who are nomadic, and the rest of society has a very tough time dealing with those nomads.

Yea, I lived in East Africa for a bit and learned a lot about the struggles between the nomadic pastoralists and settled farmers. Also in Europe with the Roma people and their struggles.

I mean, I guess nomadic vs settled is probably a spectrum, with most of us not falling at anywhere near yhe extreme poles. Yet, yes, I feel you.

Legal Address? It's a good question. Who knows, with modern technology it could be updated daily.

... I shuttered at that thought.

Sounds like masochistic performance art waiting to happen.

Your place of domicile (a tax and legal concept) cannot be updated daily.

How frequently can it be updated?

I moved from PA to NM last year. From PA's perspective, PA remains your domicile until you take steps to permanently establish a new residence somewhere else. Other states may or may not take the same position.

Those steps include, but are not limited to: buying/renting property as a primary residence, registering a car, registering to vote.

Should it be updated?

South Dakota lets you establish tax domicile with no state income tax instantly. You need to show a receipt from a hotel or campground that you spent a night in the state. You also get a new driver's license and open a bank account. That's it. What stops me from setting up a remote workstation in SD, logging into work through VPN from there, and living wherever I want? :)

Once the pandemic lessens, I am switching my domicile from California to SD and semi-retiring away from Bay Area. I will have a legal presence and a computer in that area, but I will not live there.

There could be a business opportunity in setting up remote workstations in high rent areas to comply with these requirements.

Multiple states can consider you to be domiciled there, and you are liable for state taxes in each.

There is no constitutional protection that prevents you from having to pay multiple resident state taxes, though in practice, it doesn't happen often. NY is notorious for claiming people are still residents after they have left-one factor is spending any part of 183 days in state, but another is intent and emotional attachment.

Typically when you live in another state for 3 or more months you “establish residency”. Not declaring this properly on your state income taxes is tax evasion.

Lying to your company about residency and tax evasion to receive more money is fraud.

So it sounds like you’re going to have an interesting time either committing fraud or flying back and forth constantly to pull this off?

I bet if you were hired by a company while living in a lower COL city for market rates in that city, and then moved to the Bay area you’d be advocating for getting a COL adjustment to afford Bay area rents.

Considering fraud and tax evasion schemes to avoid the exact same adjustment in the other direction is ridiculous and selfish. If everyone did what you did housing rates would skyrocket in those cities like the Bay area and create even more housing crisis and displacement.

they should hire you under different contract where you are responsible for your taxes, not the employer, something like freelance contractor, not familiar with US law

lowering salaries because company must adjust your taxes is lame excuse

They’re lowering salary for a different reason.

But you have to tell them what state you have residency so they can withhold income taxes for the right state and not be liable for tax evasion.

You’re conflating two separate things

What's different here is presumably the scale the policy is being applied at, which creates the likelihood that significant groups of employees will be able to demonstrate disparate impact. For it to be a problem, there need to be enough remote employees in "favored" and "disfavored" {location,compensation} buckets to make a case. Gitlab is presumably not there yet.

You think the US government isn't "at the scale" of Facebook?

USG pays flat rate globally. They then plus up a COLA allowance based on high-cost areas, special circumstances, etc. But the base rate is a flat rate for a given position. You can pay 'less extra', but not 'less', generally. Which I'm sure is what FB and others will technically do.

Parent comment started:

>What's different here is presumably the scale the policy is being applied at

Suggesting that FB is somehow going to apply any policy to its employees that is at a larger scale than the US government is a bit ridiculous.

Yes, I agree that's what FB will do.

BAH is based on your duty location

For Active Duty - yes it is based on duty location zip code, because they assume you will move near the base that you work at.

For National Guard - it is based on Home of Record zip code. Many National Guard members travel >100 miles to their assigned Armory.

But that's an adjustment / extra, not a change to your pay as an O-3 or E-5 or GS-12 or whatever.

Does it really work on a company level like that? In the industry as a whole the scale should be enough.

There's a HUGE difference between paying in a locale based on COL and lowering an existing salary for a remote worker simply because they might have lower COL.

If you relocate at Google or Facebook, or any large company, they will adjust your salary for the new office you move to. If you move from SF to Upstate New York, you need to update your address with HR for tax purposes, and they would most likely adjust your salary under this plan.

I moved from Austin to Seattle and my salary was adjusted up. If I move back it would adjust down (which is weird, because Austin is almost as expensive as Seattle now).

Exactly. It's a painful reality to accept for those who do not know it's an accepted practice.

What you’re talking about is different pay for different localities for physical jobs. This practice does have a disparate impact on African Americans. (Part of the large pay gap between African Americans and whites is due to the fact that they disproportionately reside in low cost southern states.) Nonetheless, we accept the practice, partly out of inertia, and partly because of market principles. Companies must pay more to recruit the same level of talent in a place with high cost of living. So long as companies insist on co-located staff, that market economics provides a legitimate justification for salary discrimination.

Extending the principle to remote work removes the comfort of accepted practice. We don’t have preconceived notions of what’s “fair” when it comes to remote work. It also removes the insulation layer of market dynamics. Companies need to pay more for talent physically located in an expensive metro area, just as they need to pay more for rent, etc. But when you remove the rationale of having your workforce all in one place, that also undercuts your rationales for paying different amounts in different locations. By paying more to remote workers who want to live in Connecticut versus Georgia, Facebook is subsidizing the lifestyle choices of some developers. But those lifestyle choices are heavily affected by race. (58% of African Americans live in the south, versus 27% of white Americans. One of the major trends of demographics in the US right now is a reversal of the movement of African Americans from the south to northern cities.) And as a result, that subsidy will have a significant disparate impact based on race. Under Facebook’s policy, you’ll have otherwise similarly situated developers being penalized in racially disparate ways for their individual housing choices.

Moreover, so long as Facebook presumes that developers need o be co-located, Facebook has a legitimate economic reason to locate in San Francisco or Austin. It’s easier to recruit good developers there. Any incidental contribution to disparate impacts on groups that happen not to live in those places yields to the economics. But when you abandon that principle, you’re standing pretty naked. For remote work, what legitimate reason does Facebook have to subsidize certain developers’ consumptive habits? I prefer to live near the water—should Facebook pay me more money as a result?

According to the Supreme Court, this type of "disparate impact" claim would probably not be accepted[1]:

> Additionally, the Court outlined the contours of an important defense to a plaintiff’s prima facie case, namely that “policies are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers.” Businesses must be given “leeway to state and explain the valid interest served by their policies,” and should be able “to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system.”

> Further, the Court cautioned, as it did in Wards Cove and Ricci, that when a defendant offers a legitimate business justification, a plaintiff cannot sustain a disparate-impact claim if it cannot prove “there is ‘an available alternative … practice that has less disparate impact and serves the [entity’s] legitimate needs.’” The Court’s decision appears to create a more lenient standard for defendants than the standard the federal government has proposed, in line with the Court’s holding in Wards Cove.

[1]https://www.scotusblog.com/2015/06/paul-hancock-fha/

This is the relevant point from that article:

> In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations.

> The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.”

Paying more for people physical located in Palo Alto can be justified by a “sound business consideration.” The company isn’t discriminating based on location, per se. It is simply bidding in a labor market. It just so happens that those bids need to be higher to recruit workers for a physical office in San Francisco than elsewhere.

With remote work, that “sound business consideration” disappears. You no longer care whether the person is physical located in San Francisco. So why should the company pay more for such workers? Justifying the policy as “necessary” and “not artificial” becomes more complicated than with in-person work.

Because companies cannot force people to live in cheap COL places so they can pay them less? If the best person for the job lives in SF then the best person for the job lives in SF.

Where is this assumption that equalizing pay across regions is a race to the top, and not to the bottom, coming from anyways?

But the new Facebook policy isn’t merit based (“best person for the job”). If the “best person for the job” happens to want to live in Atlanta, she will get paid less than the marginal candidate who happens to live in San Francisco.

You seem to be overlooking why geographic discrimination in salaries exists in the first place. As tzs points out in a sibling comment, it’s because when Google has an office in Mountain View, it doesn’t just care about hiring the Nth-percentile employee. It has to pay enough to hire the Nth-percentile employee who wants to live in Mountain View for that salary. Where the worker is located matters because Google has decided that it’s office should be in Mountain View, and further that it wants to have its teams under one roof. That economic justification doesn’t exist for remote workers.

You've convinced me that there will be lawsuits on this issue. But do you think there will be lawsuits where the plaintiffs win (and not just an isolated win here and there, but mass wins that force large policy changes by employers)? That still seems fairly far fetched to me.

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