My client doesn’t mind either way, as long as they continue to be productive and prepared to work as a team. However, they have mentioned that when setting salaries for staff, they do take into account the fact the area the office means it can be costly to travel into work, and that local housing is sought after and therefore quite pricey. If my client agrees to let these employees work from home permanently, can they reduce their salaries to reflect the employees reduced costs?
Your client is not alone in their thinking here: A survey carried out by the Chartered Institute of Personnel and Development (CIPD) has revealed that 10% of companies plan on reducing pay or benefits for home workers.
The survey found that 4% of businesses have already reduced pay or benefits for people who continue to work from home and a further 13% are on the cusp of doing so.
This follows recent reports that employees of law firm Stephenson Harwood have been given the option to work from home full-time in return for a 20% reduction in pay. During the pandemic, for resourcing reasons the firm recruited lawyers who lived outside of London, who get their travel and accommodation expenses covered if they are needed in the office.
The justification for offering these home workers reduced pay appears to be that these workers have the benefit of living in less expensive parts of the UK. The policy also brings pay within the firm for pre-pandemic staff who accept the offer in line with its new remote workers.
There are, however, potential legal and ethical risks to taking this course of action, of which your client should be aware. This can lead to issues with recruitment and retention, damaging the organisations prospects for future success. It can also leave remote workers with the impression that they are less valued than office-based staff, creating a two-tier workforce that may find it difficult to work together.
Offering remote workers reduced pay or benefits is likely to have a detrimental impact on morale, job satisfaction and the organisation’s reputation as a good employer, particularly given the current desire for home working. Your client will therefore need to carefully balance the positives and risks of the course of action they choose.
Your client is also going to need to carefully consider the business reasons for reducing the salary of those looking to be based permanently from home, and how such a scheme would be implemented, to reduce the risk of claims for constructive unfair dismissal and discrimination.
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