New 'Pay Policies' for IT Company Employees: How it is Going to Benefit IT Workers? - Report

Employees from companies such as VMware Inc. Who are going to be permanent remote workers will be getting a pay cut if they move away from Silicon Valley which is one of the country’s costliest areas to live in.

Apart from VMware, tech companies such as Facebook Inc. And Twitter Inc have also allowed staff to choose whether they want to permanently work from home but in the case of VMware employees are likely to undergo a major pay cut depending upon the place they live in. For example, someone who is shifting from California to Denver will be accepting a salary reduction by 18%. 

Facebook and Twitter too have put up similar policies. A Twitter spokesman announced that the company has a “competitive” approach when it comes to localizing compensation. Whereas, Facebook has announced that employees will be undergoing a pay cut depending upon the place they are shifting to. 

“VMware’s senior vice president of human resources, Rich Lang, said the company adjusts salary based on the “cost of labor" in different regional zones and benchmarks salary variations among firms competing for its workers. While some employees will see pay cuts, Lang said others could get a raise if they chose to move to a larger or more expensive city,” Livemint reported. 

“We are asking employees to be upfront and honest, because that’s the expectation at VMware, but also the governments require you pay your taxes based on where you work. If workers temporarily move to be with family or another short-term reason, their pay will not be affected,” a member from the company’s administration told media.

According to Bill McDermott, the Chief Executive Officer of Cloud-software maker ServiceNow Inc., the company is likely to change the pay of Bay area workers who move away from the year 2021. 

“I don’t believe we should have an environment where management is not involved with those determinations, because what you could get into here is a situation where employees then become the decision-maker in working literally from anywhere, and you would have a hard time organizing and holding together a culture if that was the case," McDermott said Friday in an interview.

“Are we going to adjust their pay when they’re in the mountains of Colorado for a couple of months where they feel safer? Probably not," he added.