7 ms·

This makes sense in the hiring process, but once you've hired someone, it's a super dick move to lower their salary in spite of their performance. Seems like th

This makes sense in the hiring process, but once you've hired someone, it's a super dick move to lower their salary in spite of their performance. Seems like the sort of decision a robot would make.

jbroman 6y ago
This is consistent with what major tech companies do today when an employee relocates (or are simply hired in a less pricey region). Whether or not you agree that employees should be paid differently depending on cost of living where they reside, it isn't new.
- AmericanChopper 6y ago
  This sort of scaling is simply a (rather flimsy) cover for the natural consequences of moving to remote work. If employees in the large metros have to start competing with workers from everywhere else, the salaries are going to start falling. A worker in rural Mississippi is going to expect a much lower salary than an equivalently skilled worker in Palo Alto, and a worker in Manila would expect even less again. Remote work puts significant downward pressure on salaries. This is simply an attempt to offset that. But if you think a hiring manager faced with having to choose between hiring somebody on a big metro salary vs a small rural one is going to be completely uninfluenced, then I’ve got news for you...
  - meowtimemania 6y ago
    honestly as a front end dev, I don’t think what I do is that difficult and I’m overpaid. I feel a little nervous that with remote work I won’t be overpaid in the future
    - AmericanChopper 6y ago
      Jobs aren’t paid according to how difficult they are, they’re paid by supply and demand. Employers want to pay as little as possible, but they have to compete with other companies to hire staff from the finite labor pool. Employees want to be paid as much as possible, but have to compete with each other for the finite number of positions available with employers. Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, especially if they’re competing with candidates willing to take a much lower salary due to living in a much cheaper place.
      - dragonwriter 6y ago
        > Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, Remote works also means that for every desirable candidate, employers will have more competing employers to compete with, which will drive prices up. What it really means is that both sides of the market will be larger and less segmented, meaning (1) there will be less opportunity for localized shortages and surpluses driving radically high or depressed salaries, and (2) the law of one price will be more relevant to labor prices for the jobs where remote work is normalized.
        AmericanChopper 6y ago
        But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. Especially where candidates in developed countries end up competing with candidates in developing countries. It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.
        dragonwriter 6y ago
        > But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. I'd expect it to provide a greater surplus to lower-expenses candidates, as any common price does. That's not really favoring lower CoL. > It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected. Yes, for work that the skills required can easily be sourced anywhere, remote work is going to lead to natural price level much lower than the prices in the highest price segment of geographical segregate markets. OTOH, where skills demanded are rare and not widely available, normalization of remote work just means its easier for more employers to join the bidding on that restricted set of employees with low transaction costs. So, for commodity labor it drives wages down to the lowest common denominator; for the most elite labor it drives wages up. Like neoliberals free trade itself, it exacerbates inequalities.
- Traster 6y ago
  What I'm interested in is that it's quite difficult today to find out how much you would be paid when you relocate. You need to jump through a lot of hoops to get the move approved in principle before you find out your new compensation. With this new system it should theoretically be fine to relocate anywhere, so if it is then you'd want to find out how much each area pays before you decide to move. Which means suddenly you know that guy who chose to go live in downtown SF is getting paid 1.4x more than you for the same job. The same is true today obviously, most big offices are in different areas and have different pay scales, but it's generally not as well known by the employees what those scales are.
tortasaur 6y ago
What's the alternative if you're going to scale salary based on location while hiring? If you only scale while hiring, you'll encourage people to "move" to Silicon Valley for a month or two, then "move" back to their original location. There would be an enormous financial incentive for that behavior.
- VonGuard 6y ago
  This happens where I work now, and only one person I know has done the Jump-ship thing and moved to a rural area. It's easy to say "move to the bay, get a job with Facebook, move out" but getting a job with Facebook isn't easy, and moving is a ton of work. It's kinda like a problem that I really don't think would exist on a large scale. If the employee is worth X in the big city, they're worth X in the small city too, unless they were a shitty employee to begin with. In the end, the right people make the company, and if you're going to quibble over 10k of their salary, they should probably go somewhere else.
- godelski 6y ago
  Then it seems the factor here is being close to the office. I can get this benefit. So why not base it on distance to the office? Within 2 hours? No pay change. 6-12 hrs and in the same timezone? Small pay decrease. Need a flight to get to work? Bigger decrease. And adjust your decrease on how important it is that you be physically present/in the same timezone. If you never need to be in the office, no change. If once a week, big change. While there's still issues with this, at least it is recognizing the aspect that there is benefit to being in the office (though it is not always needed).
  - falafel 6y ago
    So the employer punishes people that cannot afford to live close to the office? And on top of that, if they need to travel to conduct business, their pay is decreased? If I understand this right, it seems like a horrible idea, and I would not want to work at a place like that at all. If the company needs to hire talent that lives far away, why should they be punished?
joshuamorton 6y ago
Is it also a dick move to raise someone's salary if they relocate to a more expensive location but stay in the same role? (This is super common with international transfers, for example)
- VonGuard 6y ago
  Fine by me. All I'm really saying here is that if Mark Zuckerberg moved to Topika, they wouldn't lower his salary.
  - joshuamorton 6y ago
    Zuck pulls a salary $1. His "compensation" comes in the form of stock that he already owns increasing in value.
  - maximente 6y ago
    executive compensation is not handled the same as rank and file vanilla labor compensation - which SWEs are, despite (seemingly, most of) their world views to the contrary.
  - SpicyLemonZest 6y ago
    They would if he had a salary. Dorsey got in trouble with the Twitter board when he announced his plan to move to Africa, although he also doesn't have any direct compensation to cut.
ardit33 6y ago
but... you can see people gaming it though Claiming residence in SF or NYC during the hiring process, then starting working somewhere else... The best way about this is for FB to split the difference. Eg. if your average tc is 300k in SF, and it is 200k in North Carolina, if you decide to move there, you will be slotted down to something in between so it becomes a win win.
- nojito 6y ago
  It's rudimentary to see where employees log in from.
- electricslpnsld 6y ago
  > Claiming residence in SF or NYC during the hiring process, then starting working somewhere else... It would be a bit of a cat and mouse game. Companies can trace where you are working from VPN logins. I suppose you could VPN through San Francisco then VPN into your corporation’s network, but they probably monitor for use of common VPN providers. Plus during your meetings, etc, you coworkers would notice if you moved.
  - mindslight 6y ago
    Whatever solution you use for your legal address could also provide a dedicated VPN and even mail scanning/forwarding. For example, renting a shared room in an apartment with 9 other roommates (one or two who live there full time), and use the premise Internet connection for a VPN server with a nice clean residential IP. Even more practical if there is an option to stay overnight occasionally, and your full-size residence is only several hours drive away. I can even see these type of arrangements arising naturally when roommates move out. Watch your MTU though!
- amiga_500 6y ago
  One would imagine they would want your regular dev to be in cheaper locations (same TZ perhaps) and only very good dev in higher cost locations. The land market cost moves on this could be huge if many companies do this. IMHO it could be bigger than any effect UBI might have had, as typically UBI would see lower earners flee high cost to new "marginal" areas with their UBI income. In this case it's mid to high earners who are suddenly able to flee the nest, which I feel could have a larger impact on land costs. Very interesting times.
harryh 6y ago
You pretty much have to do this if you want to maintain different salaries in different geographic reasons. Otherwise people would be highly incentivized to move to SF/NYC for 6 months to get hired then move back to their cheap COL permanent location.
- toiletfuneral 6y ago
  what's the downside of that?
- amiga_500 6y ago
  I feel someone is setting up a company that provides a virtual location in SV for a small fee, but you really live say in Vermont.
  - harryh 6y ago
    Lying to your employer definitely sounds like a good plan. I'm sure that will work out well for the people that try it!
    - amiga_500 6y ago
      Personally I'd rather be paid less and avoid the stress of getting found out, plus it's not ethical. However life has shown me many people who would not share this perspective.
- Exmoor 6y ago
  Honestly, people working out of the main office for their first 6mo-1y would probably a really advantageous scenario for all involved. The first year is when learning tools and culture as well as developing relationships is most crucial. I would say someone moving from in-office to remote has a big advantage over someone getting hired remote.
  - harryh 6y ago
    True. But is there that much of a difference between "working from home in Palo Alto vs working from home in Boise"? Probably not.
YorickPeterse 6y ago
In some countries (at least in The Netherlands), it's also plain illegal to lower one's salary based on just location. In fact, over here lowering salary in general is difficult to do. But this being the US, I suspect it won't be much of an issue for Facebook.
- benhurmarcel 6y ago
  In practice it's also applied in Europe. When an employee requests a relocation it's a new contract anyway, so the new salary is up for negotiation.
- brnt 6y ago
  Then again, nearly all tech jobs are in the randstad metropolitan area, so there is really only one locale anyway.
kccqzy 6y ago
It isn't a dick move. Your salary isn't just determined by your performance. It's also partly determined by your cost of living.
- deleted 6y ago
  [deleted]
- falcolas 6y ago
  Salary drops won't happen based solely off the cost of living. For example, based purely off the cost of living, you could move to a rural city in Iowa and only have a cost of living change in the $30 - $40k range (average SF rent being $3,700, high end Iowa rent being around $1k range). But your actual salary change will be in the $50-$100k range (based off stated numbers in similar articles).
- Markoff 6y ago
  yes, during hiring process for on site jobs based on local competition among employers and employees if you are not competing locally, but with everyone everywhere salaries based on location become meaningless and only thing which counts should be productivity, why should be anyone having same productivity punished for being frugal instead wasting money? by your logic they should go through your list of expenses, someone who prefer to buy Tesla over ford should get higher salary, someone who prefer to spend vacation in Europe instead of US should have higher salary, this is pretty insane discriminatory logic
bentlegen 6y ago
When you sign an employment agreement, location is part of that agreement. If you decide you want to work in a different location than was agreed upon, that’s you indicating you want to amend the agreement. Facebook isn’t saying: “you have to move and these are the terms”. Facebook is saying, “if you want to move here are the terms”. If you don’t like the terms you can always stay put or find a new job with terms you prefer.
- falcolas 6y ago
  Remote worker here: my home city was not part of the agreement. I don't know of anybody has "and I will only live out of X city" in their employment agreement. If they're changing from office-only to remote, perhaps it's worth revisiting their contract, but we can't pretend that their place of living is incorporated into it somehow.
  - MatmaRex 6y ago
    I work remotely and my employment agreement actually states that "The workplace is determined in <my address>" in the first paragraph. Might be worth checking yours.
  - csa 6y ago
    It may not have been. That said, your state and possibly your county/city probably need to be known due to nexus (state incorporation and tax issues) and personal taxes (potentially all locales). I believe this is why FB says they will crack down hard on people who fudge this info — getting in trouble with the tax man could open a Pandora’s box.
    - falcolas 6y ago
      Yes, but that's between me and payroll, not a condition of my salary. That's the line I'm trying to draw.
  - bentlegen 6y ago
    Remote worker for Facebook?
amiga_500 6y ago
This is how prices are set. If you think labour is "value added less some employer fair cut", think again. This also feeds directly into high land costs making industry less competitive or even infeasible, requiring for example offshoring. This entire thing is quite interesting. For example you might want to live in the middle of nowhere out of choice, however it might be more economically beneficial, after you subtract rent costs, to live in a suburb or near enough to a major city to qualify for the higher pay due to the higher median salary. Or it may be the inverse, getting too close is a problem. Part of this would depend on how FB choose to compute this.
morgante 6y ago
Nobody is having a salary cut forced on them. People are free to continue operating in the same capacity they were when first offered the salary (working in SV office). If they want to change that, then they are renegotiating the terms of employment and hence should expect salary adjustments.

This makes sense in the hiring process, but once you've hired someone, it's a super dick move to lower their salary in spite of their performance. Seems like the sort of decision a robot would make.

jbroman 6y ago

This is consistent with what major tech companies do today when an employee relocates (or are simply hired in a less pricey region). Whether or not you agree that employees should be paid differently depending on cost of living where they reside, it isn't new.

AmericanChopper 6y ago
This sort of scaling is simply a (rather flimsy) cover for the natural consequences of moving to remote work. If employees in the large metros have to start competing with workers from everywhere else, the salaries are going to start falling. A worker in rural Mississippi is going to expect a much lower salary than an equivalently skilled worker in Palo Alto, and a worker in Manila would expect even less again. Remote work puts significant downward pressure on salaries. This is simply an attempt to offset that. But if you think a hiring manager faced with having to choose between hiring somebody on a big metro salary vs a small rural one is going to be completely uninfluenced, then I’ve got news for you...
- meowtimemania 6y ago
  honestly as a front end dev, I don’t think what I do is that difficult and I’m overpaid. I feel a little nervous that with remote work I won’t be overpaid in the future
  - AmericanChopper 6y ago
    Jobs aren’t paid according to how difficult they are, they’re paid by supply and demand. Employers want to pay as little as possible, but they have to compete with other companies to hire staff from the finite labor pool. Employees want to be paid as much as possible, but have to compete with each other for the finite number of positions available with employers. Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, especially if they’re competing with candidates willing to take a much lower salary due to living in a much cheaper place.
    - dragonwriter 6y ago
      > Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, Remote works also means that for every desirable candidate, employers will have more competing employers to compete with, which will drive prices up. What it really means is that both sides of the market will be larger and less segmented, meaning (1) there will be less opportunity for localized shortages and surpluses driving radically high or depressed salaries, and (2) the law of one price will be more relevant to labor prices for the jobs where remote work is normalized.
      - AmericanChopper 6y ago
        But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. Especially where candidates in developed countries end up competing with candidates in developing countries. It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.
        dragonwriter 6y ago
        > But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. I'd expect it to provide a greater surplus to lower-expenses candidates, as any common price does. That's not really favoring lower CoL. > It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected. Yes, for work that the skills required can easily be sourced anywhere, remote work is going to lead to natural price level much lower than the prices in the highest price segment of geographical segregate markets. OTOH, where skills demanded are rare and not widely available, normalization of remote work just means its easier for more employers to join the bidding on that restricted set of employees with low transaction costs. So, for commodity labor it drives wages down to the lowest common denominator; for the most elite labor it drives wages up. Like neoliberals free trade itself, it exacerbates inequalities.
Traster 6y ago
What I'm interested in is that it's quite difficult today to find out how much you would be paid when you relocate. You need to jump through a lot of hoops to get the move approved in principle before you find out your new compensation. With this new system it should theoretically be fine to relocate anywhere, so if it is then you'd want to find out how much each area pays before you decide to move. Which means suddenly you know that guy who chose to go live in downtown SF is getting paid 1.4x more than you for the same job. The same is true today obviously, most big offices are in different areas and have different pay scales, but it's generally not as well known by the employees what those scales are.

tortasaur 6y ago

What's the alternative if you're going to scale salary based on location while hiring? If you only scale while hiring, you'll encourage people to "move" to Silicon Valley for a month or two, then "move" back to their original location. There would be an enormous financial incentive for that behavior.

VonGuard 6y ago
This happens where I work now, and only one person I know has done the Jump-ship thing and moved to a rural area. It's easy to say "move to the bay, get a job with Facebook, move out" but getting a job with Facebook isn't easy, and moving is a ton of work. It's kinda like a problem that I really don't think would exist on a large scale. If the employee is worth X in the big city, they're worth X in the small city too, unless they were a shitty employee to begin with. In the end, the right people make the company, and if you're going to quibble over 10k of their salary, they should probably go somewhere else.
godelski 6y ago
Then it seems the factor here is being close to the office. I can get this benefit. So why not base it on distance to the office? Within 2 hours? No pay change. 6-12 hrs and in the same timezone? Small pay decrease. Need a flight to get to work? Bigger decrease. And adjust your decrease on how important it is that you be physically present/in the same timezone. If you never need to be in the office, no change. If once a week, big change. While there's still issues with this, at least it is recognizing the aspect that there is benefit to being in the office (though it is not always needed).
- falafel 6y ago
  So the employer punishes people that cannot afford to live close to the office? And on top of that, if they need to travel to conduct business, their pay is decreased? If I understand this right, it seems like a horrible idea, and I would not want to work at a place like that at all. If the company needs to hire talent that lives far away, why should they be punished?

joshuamorton 6y ago

Is it also a dick move to raise someone's salary if they relocate to a more expensive location but stay in the same role? (This is super common with international transfers, for example)

VonGuard 6y ago
Fine by me. All I'm really saying here is that if Mark Zuckerberg moved to Topika, they wouldn't lower his salary.
- joshuamorton 6y ago
  Zuck pulls a salary $1. His "compensation" comes in the form of stock that he already owns increasing in value.
- maximente 6y ago
  executive compensation is not handled the same as rank and file vanilla labor compensation - which SWEs are, despite (seemingly, most of) their world views to the contrary.
- SpicyLemonZest 6y ago
  They would if he had a salary. Dorsey got in trouble with the Twitter board when he announced his plan to move to Africa, although he also doesn't have any direct compensation to cut.

ardit33 6y ago

but... you can see people gaming it though Claiming residence in SF or NYC during the hiring process, then starting working somewhere else... The best way about this is for FB to split the difference. Eg. if your average tc is 300k in SF, and it is 200k in North Carolina, if you decide to move there, you will be slotted down to something in between so it becomes a win win.

nojito 6y ago
It's rudimentary to see where employees log in from.
electricslpnsld 6y ago
> Claiming residence in SF or NYC during the hiring process, then starting working somewhere else... It would be a bit of a cat and mouse game. Companies can trace where you are working from VPN logins. I suppose you could VPN through San Francisco then VPN into your corporation’s network, but they probably monitor for use of common VPN providers. Plus during your meetings, etc, you coworkers would notice if you moved.
- mindslight 6y ago
  Whatever solution you use for your legal address could also provide a dedicated VPN and even mail scanning/forwarding. For example, renting a shared room in an apartment with 9 other roommates (one or two who live there full time), and use the premise Internet connection for a VPN server with a nice clean residential IP. Even more practical if there is an option to stay overnight occasionally, and your full-size residence is only several hours drive away. I can even see these type of arrangements arising naturally when roommates move out. Watch your MTU though!
amiga_500 6y ago
One would imagine they would want your regular dev to be in cheaper locations (same TZ perhaps) and only very good dev in higher cost locations. The land market cost moves on this could be huge if many companies do this. IMHO it could be bigger than any effect UBI might have had, as typically UBI would see lower earners flee high cost to new "marginal" areas with their UBI income. In this case it's mid to high earners who are suddenly able to flee the nest, which I feel could have a larger impact on land costs. Very interesting times.

harryh 6y ago

You pretty much have to do this if you want to maintain different salaries in different geographic reasons. Otherwise people would be highly incentivized to move to SF/NYC for 6 months to get hired then move back to their cheap COL permanent location.

toiletfuneral 6y ago
what's the downside of that?
amiga_500 6y ago
I feel someone is setting up a company that provides a virtual location in SV for a small fee, but you really live say in Vermont.
- harryh 6y ago
  Lying to your employer definitely sounds like a good plan. I'm sure that will work out well for the people that try it!
  - amiga_500 6y ago
    Personally I'd rather be paid less and avoid the stress of getting found out, plus it's not ethical. However life has shown me many people who would not share this perspective.
Exmoor 6y ago
Honestly, people working out of the main office for their first 6mo-1y would probably a really advantageous scenario for all involved. The first year is when learning tools and culture as well as developing relationships is most crucial. I would say someone moving from in-office to remote has a big advantage over someone getting hired remote.
- harryh 6y ago
  True. But is there that much of a difference between "working from home in Palo Alto vs working from home in Boise"? Probably not.

YorickPeterse 6y ago

In some countries (at least in The Netherlands), it's also plain illegal to lower one's salary based on just location. In fact, over here lowering salary in general is difficult to do. But this being the US, I suspect it won't be much of an issue for Facebook.

benhurmarcel 6y ago
In practice it's also applied in Europe. When an employee requests a relocation it's a new contract anyway, so the new salary is up for negotiation.
brnt 6y ago
Then again, nearly all tech jobs are in the randstad metropolitan area, so there is really only one locale anyway.

kccqzy 6y ago

It isn't a dick move. Your salary isn't just determined by your performance. It's also partly determined by your cost of living.

deleted 6y ago
[deleted]
falcolas 6y ago
Salary drops won't happen based solely off the cost of living. For example, based purely off the cost of living, you could move to a rural city in Iowa and only have a cost of living change in the $30 - $40k range (average SF rent being $3,700, high end Iowa rent being around $1k range). But your actual salary change will be in the $50-$100k range (based off stated numbers in similar articles).
Markoff 6y ago
yes, during hiring process for on site jobs based on local competition among employers and employees if you are not competing locally, but with everyone everywhere salaries based on location become meaningless and only thing which counts should be productivity, why should be anyone having same productivity punished for being frugal instead wasting money? by your logic they should go through your list of expenses, someone who prefer to buy Tesla over ford should get higher salary, someone who prefer to spend vacation in Europe instead of US should have higher salary, this is pretty insane discriminatory logic

bentlegen 6y ago

When you sign an employment agreement, location is part of that agreement. If you decide you want to work in a different location than was agreed upon, that’s you indicating you want to amend the agreement. Facebook isn’t saying: “you have to move and these are the terms”. Facebook is saying, “if you want to move here are the terms”. If you don’t like the terms you can always stay put or find a new job with terms you prefer.

falcolas 6y ago
Remote worker here: my home city was not part of the agreement. I don't know of anybody has "and I will only live out of X city" in their employment agreement. If they're changing from office-only to remote, perhaps it's worth revisiting their contract, but we can't pretend that their place of living is incorporated into it somehow.
- MatmaRex 6y ago
  I work remotely and my employment agreement actually states that "The workplace is determined in <my address>" in the first paragraph. Might be worth checking yours.
- csa 6y ago
  It may not have been. That said, your state and possibly your county/city probably need to be known due to nexus (state incorporation and tax issues) and personal taxes (potentially all locales). I believe this is why FB says they will crack down hard on people who fudge this info — getting in trouble with the tax man could open a Pandora’s box.
  - falcolas 6y ago
    Yes, but that's between me and payroll, not a condition of my salary. That's the line I'm trying to draw.
- bentlegen 6y ago
  Remote worker for Facebook?

amiga_500 6y ago

This is how prices are set. If you think labour is "value added less some employer fair cut", think again. This also feeds directly into high land costs making industry less competitive or even infeasible, requiring for example offshoring. This entire thing is quite interesting. For example you might want to live in the middle of nowhere out of choice, however it might be more economically beneficial, after you subtract rent costs, to live in a suburb or near enough to a major city to qualify for the higher pay due to the higher median salary. Or it may be the inverse, getting too close is a problem. Part of this would depend on how FB choose to compute this.

morgante 6y ago

Nobody is having a salary cut forced on them. People are free to continue operating in the same capacity they were when first offered the salary (working in SV office). If they want to change that, then they are renegotiating the terms of employment and hence should expect salary adjustments.