The smarter of the anti-remote companies have realized this and are in a perpetual denial/paralysis phase. It would be easier if they just gave up and stopped trying to bring people back.
And companies are already reducing pay based on distance of employees’ homes if they choose to work from home.
I think the market will automatically balance itself out in a few years.
Sex/gender: I need my commute time to take care of my children.
Health/medical condition/genetics: commuting increases my blood pressure, triggers anxiety and panic, and reduces my overall mental and physical health and quality of life.
Wife’s company makes explicit comp adjustments if an employer moved. Mine does not, but it does impact future adjustments.
1. A base amount that is based solely on the job to be done and the level of skill and experience required. The base pay is the same no matter where you live and is the same regardless of whether the work is done remotely or at one of their offices.
2a. If the company requires you to do the work at a particular location, or lets you work at home part of the time but requires you to come to a particular location often enough that you have to live in the general area of that location, they can pay an additional amount based on the cost of living in that area.
2b. If the company imposes geographical constraints on remote employees, such as requiring them to live in specific countries, states, or timezones, they can pay an additional amount based on the cost of living in those countries, states, or timezones.
The key is to only have pay depend on location to the extent that the company constrains the worker's location. That should be very unlikely to run afoul of discrimination law.
When the worker has agency to chose remote vs in office, tying pay to physical location seems like coercion though. Doesn't that constrain the worker? "Live in this specific area and come to the office and we will maintain your current pay. Else, you have to take a pay cut for the same role and work output"
Maybe this is a reason why some companies are hesitant to have it both ways and are inclined to force people back to the office. Could they be reducing legal exposure to equal pay lawsuits?
I suppose the higher pay reflects the employer's expectation of a higher return on productivity, creativity, from that employee.
Or, put another way, they are docking the pay of the remote worker expecting that they are probably not clocking in a "full days work" or will fail to deliver on the fruits of collaboration....
I do expect we'll see some equalizing of salary bands at remote heavy companies. If I don't care if you're in the Bay Area or not, your decision to live there is a personal choice just like living in Aspen would be.
Not necessarily higher productivity, but different. An employee that is present at the physical office when most people don't, is providing a peculiar (and rare) kind of value besides their actual productivity in their role, _if_ the company values something about their physical offices. There may be many reasons why the company would, but exploring that is a different topic.
Companies ask for this shit for obedience, not to reduce costs...
Profit per employee sets salary ceiling. Market sets salary.
That is the side that is always focused on.
The other side is people who already lived in San Antonio but can't relocate, for one reason or another. Their spouse has a career and doesn't want to leave. Their kids are in school and don't want to leave. They're disabled or have family in the area that depends on them. Those people can suddenly go work for the company in San Francisco that is no longer requiring you to relocate, and might make less than employees based in San Francisco, but more than anyone was offering in San Antonio.
This is the side that never seems to get brought up.
It's not at all clear that, when the dust settles, the balance of those who had to take pay cuts versus those who saw pay raises to work remotely is going to work out with more seeing pay cuts. Short run that will be the case just because most companies had a lot more pre-existing employees in March 2020 than they have hired since. But that won't remain the case forever.
Fast food companies might do this (just because they can get away with anything), but companies that dare pull this shit in any sector which favors employees should be shut down immediately...
People are paid for their work, not for their distance from the office. If they want to try to reduce pay for that, how about adding the commute to working hours?