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My observation is that there are 2 schools of thought about remote salaries. One side will pay SF-based competitive salaries no matter where you are, are the ot

My observation is that there are 2 schools of thought about remote salaries. One side will pay SF-based competitive salaries no matter where you are, are the other side will have a "cost of living" adjusted salary. Gitlab is in the latter group. I recently thought about it, and was wondering if this could create some bias / unfair preferential treatment when interviewing and competing with other candidates. If candidate A is in SF, and another candidate, B, is in another cheaper area, and Gitlab is trying to decide between the 2 candidates, won't they be leaning toward hiring candidate B because of lower salary? All else being equal. I wonder if there can be some legal things into this.

baroffoos 7y ago
That bias already exists, if 2 candidates with the same skill apply and one is asking for a lower pay then they are likely to be picked over the other. Why pay more for the same skill? If you want to have higher chances of being accepted then lowering your costs so you can lower your required pay is a good strategy. I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are.
- onion2k 7y ago
  Why pay more for the same skill? Because people aren't stupid and when they realise they're being paid less than they're worth they'll leave, and then you'll have to go through the pain of recruiting someone else.
  - jypepin 7y ago
    or low moral because people feel like they have been screwed or it's unfair that some coworkers are paid more.
  - mieseratte 7y ago
    > Because people aren't stupid and when they realise they're being paid less than they're worth they'll leave, and then you'll have to go through the pain of recruiting someone else. I just took a 20% pay-cut to go work somewhere I thought I might like. There is more to a position than the compensation package.
    - pault 7y ago
      Sure, in those rare cases where you can find a company that really does interesting work (this is doubly difficult if you are limited to companies that allow remote work). For boring company A vs boring company B you are going to follow the money, I think (unless you actually work for The Boring Company).
      - emilycook 7y ago
        Disclaimer, I am a GitLab employee. But IMO this isn't really comparing apples-to-apples, since we're specifically talking about remote companies. Sure, someone may have 2 job offers from 2 different remote companies, in which case the company offering SF rates has the advantage. But I'd argue that would be a fairly rare case overall given how globally competitive remote work is. What's probably more likely is that someone is comparing Local Company A vs Remote Company B (this was my case), with the compensation rates being fairly equal. Then, the decision is "am I willing to be paid less than a coworker in SF for the opportunity to work remotely?" I was fine with that trade-off personally, and I'm sure a lot of people who are attracted to remote work would be as well.
      - mieseratte 7y ago
        There are a non-trivial number of factors that go into picking a job such that I sincerely doubt I would ever find myself going "Well, that one is offering 10K more per year." Off-hand: - Size of company, size of department, size of team - Future prospects, both in terms of company's market and my own growth - Type of work, e.g. maintenance vs. active development, "rescue" mission vs. greenfield vs. boring brownfield. - Composition of team, leadership, etc. - Industry, e.g. do I find it reprehensible vs. tolerable vs. interesting Perhaps I'm the odd man out here, but I've never been in a position where salary was the material factor in picking one job over another.
  - znpy 7y ago
    > when they realise they're being paid less than they're worth Some observation though: 1. If you're still being paid more than local offerings, it's still worth pursuing. 2. More remote-only companies mean more global-scale competition. In the long run, this would mean that people would be paid equally among the various location (so yes, they'll leave).
  - baroffoos 7y ago
    What is less than worth though? $1 in my city goes a lot lot lot further than $1 in silicon valley. Sure, I could move to SV and get paid 400% more but I would end up with a worse quality of life and be poorer. I want to stay where I am and from what I have seen gitlab pays thats quite good for my city.
- jypepin 7y ago
  But usually salary negotiations happen once an offer is given, so candidate has already been picked. The company really need to explicitly act in bad faith to be choosing the cheaper candidate. Here I'm probably more mentioning a bias more than bad faith (although bad faith could also happen). I get the point of Gitlab about having zombie employees, but at the same time other remote companies offer SF-based salary. So _as a remote worker_ you could decide to get a SF-based salary instead of locally adjusted one. I get both sides of the argument and really don't know if a side is more right.
- a_imho 7y ago
  Surely they can fire people at will? I recall something similar though it might not be from GitLab. A long list of justification why is it good for remote employees and the local economy not to be paid on pair. It was smug and insulting.
- solatic 7y ago
  > I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are. This is a cop-out because ultimately whether you are higher paid than the local average is subjective, since a) in most areas, nobody really knows what the local average is, they just have a feeling for it, b) local averages are just that, averages, it's further difficult to judge what salary a specific profile of person (given years of experience, educational background, etc.) can expect in a given local market, c) it is entirely possible to underpay people who wrongfully believe that they are being overpaid, due to information asymmetry and not interviewing with other local companies on a regular basis. If you're not keeping in touch with your employees, and their happiness, satisfaction, and motivation levels, you cannot possibly know whether your employees perceive themselves as being overpaid or not. And if you're not willing to pay significantly above the local average, you're not going to attract the best talent in a given locality, and since a large part of the motivation for all-remote is to hire the best people you can get around the world, refusing to pay what they could be worth just shoots yourself in the foot as you risk losing them to all-remote companies willing to pay salaries at what is genuinely the market rate.
- dsumenkovic 7y ago
  Hi! Did you mean of https://news.ycombinator.com/item?id=18443561 https://news.ycombinator.com/item?id=18443561? Also, there's a blog post about why GitLab pays local rates https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/.
- tengbretson 7y ago
  > I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are. This is a lie. They pay people that live in lower cost-of-living areas less because they have greater leverage over them and can get away with it. End of story.
a_imho 7y ago
Could you please list some of the type I companies? I'm at the other end of things and find they are non existent, but maybe I'm searching in the wrong places. Remote is not a protected group [0]. [0] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-wage-gap-look-like/ https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
- jypepin 7y ago
  I don't have a list, but Basecamp is the first one that comes to mind and is vocal about it. More and more startups today advertise that too. Github might? I think today most SF-based remote companies offer SF-based salary for what I've observed. But I'm not active on the job market so I can't tell for sure! edit: a quick google search returns a few good links, including some recent HN discussions.
  - a_imho 7y ago
    Thanks, but Basecamp is very vocal about not hiring though and I don't see any indication GitHub/MS would be offering anything comparative. I'm fine with links too, if you have any please share.
sokoloff 7y ago
> If candidate A is in SF, and another candidate, B, is in another cheaper area, and Gitlab is trying to decide between the 2 candidates, won't they be leaning toward hiring candidate B because of lower salary? All else being equal. All else being equal, why would this be wrong? If I can buy a gallon of milk, a TV, or a car based on price/promotion why wouldn't/shouldn't a company be able to seek the best "deal" for them?
- jypepin 7y ago
  You raise a good point yeah, except I'm wondering if this is different since we are talking about people. I can think of - salary parity requirements - location based discrimination for a post announced as non-based on location Again I don't know myself, that's why I'm asking!
ilikehurdles 7y ago
My remote gig has several people who are pretty much digital nomads -- they move around often, travel even more often, and work from various states. We all get paid on the same scale (north-east coast based) so there's no issue; but, how would Gitlab handle this? Change their salary every time they log work from a new location? Even with that, it seems arbitrary and unbalanced. One person's cost of living paying for a mortgage in the city, raising children, or having college debt is very different from another's renting a 2 bedroom with their partner in midwestern suburbs. You might say that it's not the company's duty to compensate you for the financial impact of the life choices you make, yet they're doing exactly that by adjusting compensation based on the broad geographical area one chooses to work from. I guess for our situation, the folks on the east coast have the worse deal as their rents/mortgages are higher than remote workers' in other states, but the pay is also competitive for that area so there are still people choosing to be local. On the other hand, if my pay was lower I'd just find work with an NYC or SF based company that is remote or happens to have an office in my metro as they tend to pay higher salaries.
- dsumenkovic 7y ago
  > My remote gig has several people who are pretty much digital nomads -- they move around often, travel even more often, and work from various states. We all get paid on the same scale (north-east coast based) so there's no issue; but, how would Gitlab handle this? Change their salary every time they log work from a new location? Here's the documented process for the relocating while working at GitLab: https://about.gitlab.com/handbook/people-operations/global-compensation/#relocating https://about.gitlab.com/handbook/people-operations/global-c...
- jypepin 7y ago
  yes "nomad" vs "remote" (implying remote but based somewhere) is one of the argument for the other school: pay same rate because what if people are nomads. Gitlab has a process for relocating, so it counter the following argument, but with that kind of location based salary that pushes people to try and game the system. Get hired while saying you live in an expensive area and finally move somewhere cheap.
apaatsio 7y ago
I don't know about the legal side but if this is legal, it's pretty much a no-brainer for the company. Assume that candidate A asks $90k and candidate B asks $80k. Let's also assume that each employee brings an equal amount of value to the company, let's say $100k. So, the company makes 100% more profit off of employee B even though they are paying only 11% less.
dsumenkovic 7y ago
Here's a good read for everyone wondering why GitLab pays local rates https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/.
GoblinSlayer 7y ago
The SF candidate forces the employer to reside in SF and pay big prices due to centralization. The employer also must allocate SF space to contain the SF employee.
gshdg 7y ago
Isn't that part of the point? Being remote allows Gitlab to hire the less expensive candidate, assuming equal suitability for the job. That's good for the company. If that's translating into other biases (race/gender/age/etc), then that's a bad thing, and perhaps someone could make a legal case against it. But it seems a little odd to complain that an employer is biased against you because of a choice you make to live in a place with a high cost of living.
- jypepin 7y ago
  According to most employers I've talked to, cheaper salaries is usually not high on the reasons why remote. It's usually more access to more talents, etc.
sytse 7y ago
We want to hire the best candidate regardless of cost. We do optimize what potential candidates we approach. We focus more on diverse hires when reaching out ourselves. Diverse both as in geographically and underrepresented minorities. BTW Our blog post about our school of though https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/
- jypepin 7y ago
  Thanks for addressing the point! Just to be clear, I'm not accusing Gitlab of doing this, just using Gitlab as an example of what could be happening! :)
  - sytse 7y ago
    You're welcome. And I didn't feel accused. In fact we might document this clearly in our handbook so people don't feel confused.

baroffoos 7y ago

That bias already exists, if 2 candidates with the same skill apply and one is asking for a lower pay then they are likely to be picked over the other. Why pay more for the same skill? If you want to have higher chances of being accepted then lowering your costs so you can lower your required pay is a good strategy. I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are.

onion2k 7y ago
Why pay more for the same skill? Because people aren't stupid and when they realise they're being paid less than they're worth they'll leave, and then you'll have to go through the pain of recruiting someone else.
- jypepin 7y ago
  or low moral because people feel like they have been screwed or it's unfair that some coworkers are paid more.
- mieseratte 7y ago
  > Because people aren't stupid and when they realise they're being paid less than they're worth they'll leave, and then you'll have to go through the pain of recruiting someone else. I just took a 20% pay-cut to go work somewhere I thought I might like. There is more to a position than the compensation package.
  - pault 7y ago
    Sure, in those rare cases where you can find a company that really does interesting work (this is doubly difficult if you are limited to companies that allow remote work). For boring company A vs boring company B you are going to follow the money, I think (unless you actually work for The Boring Company).
    - emilycook 7y ago
      Disclaimer, I am a GitLab employee. But IMO this isn't really comparing apples-to-apples, since we're specifically talking about remote companies. Sure, someone may have 2 job offers from 2 different remote companies, in which case the company offering SF rates has the advantage. But I'd argue that would be a fairly rare case overall given how globally competitive remote work is. What's probably more likely is that someone is comparing Local Company A vs Remote Company B (this was my case), with the compensation rates being fairly equal. Then, the decision is "am I willing to be paid less than a coworker in SF for the opportunity to work remotely?" I was fine with that trade-off personally, and I'm sure a lot of people who are attracted to remote work would be as well.
    - mieseratte 7y ago
      There are a non-trivial number of factors that go into picking a job such that I sincerely doubt I would ever find myself going "Well, that one is offering 10K more per year." Off-hand: - Size of company, size of department, size of team - Future prospects, both in terms of company's market and my own growth - Type of work, e.g. maintenance vs. active development, "rescue" mission vs. greenfield vs. boring brownfield. - Composition of team, leadership, etc. - Industry, e.g. do I find it reprehensible vs. tolerable vs. interesting Perhaps I'm the odd man out here, but I've never been in a position where salary was the material factor in picking one job over another.
- znpy 7y ago
  > when they realise they're being paid less than they're worth Some observation though: 1. If you're still being paid more than local offerings, it's still worth pursuing. 2. More remote-only companies mean more global-scale competition. In the long run, this would mean that people would be paid equally among the various location (so yes, they'll leave).
- baroffoos 7y ago
  What is less than worth though? $1 in my city goes a lot lot lot further than $1 in silicon valley. Sure, I could move to SV and get paid 400% more but I would end up with a worse quality of life and be poorer. I want to stay where I am and from what I have seen gitlab pays thats quite good for my city.
jypepin 7y ago
But usually salary negotiations happen once an offer is given, so candidate has already been picked. The company really need to explicitly act in bad faith to be choosing the cheaper candidate. Here I'm probably more mentioning a bias more than bad faith (although bad faith could also happen). I get the point of Gitlab about having zombie employees, but at the same time other remote companies offer SF-based salary. So _as a remote worker_ you could decide to get a SF-based salary instead of locally adjusted one. I get both sides of the argument and really don't know if a side is more right.
a_imho 7y ago
Surely they can fire people at will? I recall something similar though it might not be from GitLab. A long list of justification why is it good for remote employees and the local economy not to be paid on pair. It was smug and insulting.
solatic 7y ago
> I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are. This is a cop-out because ultimately whether you are higher paid than the local average is subjective, since a) in most areas, nobody really knows what the local average is, they just have a feeling for it, b) local averages are just that, averages, it's further difficult to judge what salary a specific profile of person (given years of experience, educational background, etc.) can expect in a given local market, c) it is entirely possible to underpay people who wrongfully believe that they are being overpaid, due to information asymmetry and not interviewing with other local companies on a regular basis. If you're not keeping in touch with your employees, and their happiness, satisfaction, and motivation levels, you cannot possibly know whether your employees perceive themselves as being overpaid or not. And if you're not willing to pay significantly above the local average, you're not going to attract the best talent in a given locality, and since a large part of the motivation for all-remote is to hire the best people you can get around the world, refusing to pay what they could be worth just shoots yourself in the foot as you risk losing them to all-remote companies willing to pay salaries at what is genuinely the market rate.
dsumenkovic 7y ago
Hi! Did you mean of https://news.ycombinator.com/item?id=18443561 https://news.ycombinator.com/item?id=18443561? Also, there's a blog post about why GitLab pays local rates https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/.
tengbretson 7y ago
> I'm fairly sure the gitlab ceo commented before that they don't want to pay people way way over the local average because it could cause them to have people who don't want to be working there staying because they could never find a new job thats competitive where they are. This is a lie. They pay people that live in lower cost-of-living areas less because they have greater leverage over them and can get away with it. End of story.

a_imho 7y ago

Could you please list some of the type I companies? I'm at the other end of things and find they are non existent, but maybe I'm searching in the wrong places. Remote is not a protected group [0]. [0] https://elsajohansson.wordpress.com/2017/09/13/what-does-a-wage-gap-look-like/ https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...

jypepin 7y ago
I don't have a list, but Basecamp is the first one that comes to mind and is vocal about it. More and more startups today advertise that too. Github might? I think today most SF-based remote companies offer SF-based salary for what I've observed. But I'm not active on the job market so I can't tell for sure! edit: a quick google search returns a few good links, including some recent HN discussions.
- a_imho 7y ago
  Thanks, but Basecamp is very vocal about not hiring though and I don't see any indication GitHub/MS would be offering anything comparative. I'm fine with links too, if you have any please share.

sokoloff 7y ago

> If candidate A is in SF, and another candidate, B, is in another cheaper area, and Gitlab is trying to decide between the 2 candidates, won't they be leaning toward hiring candidate B because of lower salary? All else being equal. All else being equal, why would this be wrong? If I can buy a gallon of milk, a TV, or a car based on price/promotion why wouldn't/shouldn't a company be able to seek the best "deal" for them?

jypepin 7y ago
You raise a good point yeah, except I'm wondering if this is different since we are talking about people. I can think of - salary parity requirements - location based discrimination for a post announced as non-based on location Again I don't know myself, that's why I'm asking!

ilikehurdles 7y ago

My remote gig has several people who are pretty much digital nomads -- they move around often, travel even more often, and work from various states. We all get paid on the same scale (north-east coast based) so there's no issue; but, how would Gitlab handle this? Change their salary every time they log work from a new location? Even with that, it seems arbitrary and unbalanced. One person's cost of living paying for a mortgage in the city, raising children, or having college debt is very different from another's renting a 2 bedroom with their partner in midwestern suburbs. You might say that it's not the company's duty to compensate you for the financial impact of the life choices you make, yet they're doing exactly that by adjusting compensation based on the broad geographical area one chooses to work from. I guess for our situation, the folks on the east coast have the worse deal as their rents/mortgages are higher than remote workers' in other states, but the pay is also competitive for that area so there are still people choosing to be local. On the other hand, if my pay was lower I'd just find work with an NYC or SF based company that is remote or happens to have an office in my metro as they tend to pay higher salaries.

dsumenkovic 7y ago
> My remote gig has several people who are pretty much digital nomads -- they move around often, travel even more often, and work from various states. We all get paid on the same scale (north-east coast based) so there's no issue; but, how would Gitlab handle this? Change their salary every time they log work from a new location? Here's the documented process for the relocating while working at GitLab: https://about.gitlab.com/handbook/people-operations/global-compensation/#relocating https://about.gitlab.com/handbook/people-operations/global-c...
jypepin 7y ago
yes "nomad" vs "remote" (implying remote but based somewhere) is one of the argument for the other school: pay same rate because what if people are nomads. Gitlab has a process for relocating, so it counter the following argument, but with that kind of location based salary that pushes people to try and game the system. Get hired while saying you live in an expensive area and finally move somewhere cheap.

apaatsio 7y ago

I don't know about the legal side but if this is legal, it's pretty much a no-brainer for the company. Assume that candidate A asks $90k and candidate B asks $80k. Let's also assume that each employee brings an equal amount of value to the company, let's say $100k. So, the company makes 100% more profit off of employee B even though they are paying only 11% less.

dsumenkovic 7y ago

Here's a good read for everyone wondering why GitLab pays local rates https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/.

GoblinSlayer 7y ago

The SF candidate forces the employer to reside in SF and pay big prices due to centralization. The employer also must allocate SF space to contain the SF employee.

gshdg 7y ago

Isn't that part of the point? Being remote allows Gitlab to hire the less expensive candidate, assuming equal suitability for the job. That's good for the company. If that's translating into other biases (race/gender/age/etc), then that's a bad thing, and perhaps someone could make a legal case against it. But it seems a little odd to complain that an employer is biased against you because of a choice you make to live in a place with a high cost of living.

jypepin 7y ago
According to most employers I've talked to, cheaper salaries is usually not high on the reasons why remote. It's usually more access to more talents, etc.

sytse 7y ago

We want to hire the best candidate regardless of cost. We do optimize what potential candidates we approach. We focus more on diverse hires when reaching out ourselves. Diverse both as in geographically and underrepresented minorities. BTW Our blog post about our school of though https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/ https://about.gitlab.com/2019/02/28/why-we-pay-local-rates/

jypepin 7y ago
Thanks for addressing the point! Just to be clear, I'm not accusing Gitlab of doing this, just using Gitlab as an example of what could be happening! :)
- sytse 7y ago
  You're welcome. And I didn't feel accused. In fact we might document this clearly in our handbook so people don't feel confused.