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UK employers set to slash pay for staff working at home

By Hugh Fort in UK Business News, posted June 27, 2022

Employers across the UK are preparing to cut the pay of staff working at home - a move that could cause serious ructions with their staff.

The Daily Telegraph reports one in 10 companies are looking to reduce pay or benefits for home workers, after their plans to entice them back into the office failed.

The data is from a survey of 1,000 companies by the Chartered Institute of Personnel and Development (CIPD).

Four percent of companies surveyed have already made the move and another 13 percent are about to, the data shows.

In the US, Bank of America and Google have both revealed the difficulties they are having getting staff back.

Tesla CEO Elon Musk has also made his views on the matter very clear.

Likewise, bosses at major banks have stressed the difference between "jobs" and "careers" with regard to home-working.

Joseph Lappin, head of employment for law firm Stewarts, said unless an employment contract permits home working, then an employer can "normally reject requests to work full-time from home".

On the flip-side, some companies are considering permanent home-working - under the condition home workers are paid less.

They argue people who don't commute incur lower travel costs and could live in cheaper residential areas.

For example, City law firm Stephenson Harwood told staff they can work from home full time, if they agreed to a 20pc pay cut.

Junior lawyers at the firm are on starting salaries of £90,000, which means equates to an £18,000 loss.

Facebook's Mark Zuckerberg also told staff at the height of the pandemic that employees working remotely will have their compensation adjusted depending on where they live.

Those in cities where living and labour costs are higher would receive more.

Martin Luff, a lawyer for Vinson & Elkins, said he has been the move is now unexpected.

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He said: "When lockdowns eased and it became clearer that at least some degree of working from home was here to stay, I had anticipated that at least some employers would move quite quickly to differentiate pay and benefits between office and home workers, but I have not seen that happen."

“I think the main reason is that the competition for talent remains intense and employers are concerned about the dynamics of a two-tier workforce and potentially losing valuable staff."

Unsurprisingly, the move hasn't gone well.

Stephenson Harwood employees have already hit back at the firm after it unveiled its plans.

Ben Willmott, head of public policy for the Chartered Institute of Personnel and Development, said employers that are planning to reduce pay or benefits should "recognize there are potential ethical and legal risks in this approach.

"It could also make it harder to recruit or retain staff if people working remotely are valued and rewarded less than those who have to attend their organisation’s workplace.”

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