Why? Because if they are specifically trying to fill a spot in Menlo Park they are going to have to pay enough to attract people who live within commuting distance of Menlo Park. If they are trying to fill a Seattle spot they need to pay enough to attract Seattle workers. And so on.
If they are trying to fill a remote spot then they should be largely indifferent to where that person lives. For remote work they only need to set pay high enough to get the number of people they want from the entire country.
If they set remote pay at a level that makes them attractive to people in Georgia but not to people in Connecticut, and at that level they can find all the remote workers they want, why should they care that Connecticut engineers aren't applying for remote Facebook jobs?
Presumably because there are not enough people in Georgia alone who meet their hiring bar to fulfill their staffing needs. So they also need to hire people in HCOL areas with better competing offers and more leverage to demand more money from them.
I kind of doubt this. Many of the people I went to Georgia Tech with immediately moved to the Bay Area for CS jobs. I'm pretty sure that school alone can supply quite a bit.
Ie raising the offer raises the applicants, where those applicants are should not matter.
But what if you need to pay someone in topeka less to attract them than someone in NYC?
Specifically, if we think about the idea of a market, and assume some jobs won't be remote, the dev in NYC will have a larger market (remote jobs + onsite jobs in NYC) than the topeka dev (remote jobs + onsite jobs in topeka). This is actually the same way things are now.
What is so unethical about a company choosing to pay you (in the case of facebook, well above) market rate in the market you choose to reside in?
If the company wants to save money, then why were they willing to pay more just because I lived in a higher cost of living area, rather than looking for people in the lower cost of living areas to begin with?
I mean, sure, that sucks for people in the local labour market, but if you cannot find work that covers your cost of living, then you either have to change your work or lower your cost of living. This is the same in any type of work, in any location. For example, you might make enough money running a small town bakery, then big office opens up, local cost of living rises (like it has in San Francisco, for example) and suddenly you can’t sustain yourself anymore. You either have to do something else or move somewhere else.
My point isn’t that things don’t have an effect, just that companies want to embrace remote, that location shouldn’t be coupled to compensation, outside of implicitly due to locations effect on what an employee would accept. The employee can then make a decision on their own worth and values and choose whether they would rather do their location-non-specific work from a high cost place (that presumably has other benefits[1]) or if they would rather move to a low cost place. This shouldn’t matter to the company and shouldn’t have any impact on how they value the employee.
[1] If there is no benefit to living in a high cost location, for a given individual, then its not exactly smart ir prudent for them to stay there and keeping the prices high (due to higher demand) isn’t benefiting anyone. (Proximity to friends and family is, of course, part of the equation). I can’t expect my career of choice to pay me more just because of my personal choices or preferences, though. Why should one employee subsidize another employees lifestyle?
Your mistake is thinking that compensation is solely based on how much they value the employee. Companies only need to pay enough to outbid the competition, and the amount of competition for workers is a lot higher some places than others.
Think of it in basic supply and demand terms - the amount that a company "values" an employee only reflects the demand curve; the other half the equation is the supply curve, i.e. how much a company has to pay to beat out the competition and persuade employees to work for them because all the other options are worse. The supply curves are shifted right in LCOL areas, which drives the equilibrium prices down.
This is exactly what is happening. Facebook knows that people in certain markets are willing to accept less. So they offer less.
The rule of thumb I’ve heard is that workers cost about 2x their salaries, with the additional money going to HR, taxes, IT, morale budgets and facilities. Facilities is the biggest of those costs.
(This completely ignores stock based compensation.)
It's making me rethink a lot of things.
If there's a guy living in a black neighborhood that does the same job as a guy from a white neighborhood but for less, who would you hire? So will everyone, and the salaries will eventually match.
This is even more true in a world of mostly-remote workers where social interactions are reduced.
As long as the same policy would equally apply to all races, there is nothing wrong with making COL or salary adjustments based on where an employee moves.
No. They won't. This isn't anything new. GitLab as a company does this. My company does this. US Federal Government does this. It's not controversial. HN is the one making it controversial. YOU are making it controversial by bringing race into it.
If you have clear salary bands ("SWE III makes base 100k to 150k") and clear location bands ("NYC is 35%, Westchester County is 29%, Monroe County is 8%) then it's completely fair.
> And how does Facebook decide what the cost of living in your area is, anyway?
You could use the same scales the US Federal Government releases. You could base it on the average cost of living. Lots of data-points. Every state and local government collects this data for various reasons. Hell, Walmart and other large Grocery Stores most likely do this as well to localize prices properly.
US FedGov location pay is based on federally-dictated work site, not where the employee resides. Adjusting salaries based on employer location demands is non-controversial, and based on different job requirements in
Paying people less because they live where lots of black people live (and race and other protected classes in US employment law do correlate with cost of living), when the employer requirements do not differ on whit, is not the same thing.
If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.
It wouldn't be the same thing if it wasn't based on job-required worksite. They don't pay you based on where you live (which is quite often a different county than the work site), but where you are assigned to work. If you have no assigned worksite, as is the case with remote work, there'd be no basis for the adjustment.
> If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.
Super easy, yes.
Non-controversial, no.
Unless your employer assigns your residence, it's not a difference in job duty.you are being paid for, so is not analogous to being paid for employer-assogned job site when analyzing disparate impact.
"If you relocate from our San Jose office to our Austin office, there will be a compensation adjustment due to COL and prevailing market rate."
I don't think that's unreasonable.
I'm sure they make exceptions for those employees who they want to retain at all cost.
I knew I would before I moved (still worth it).
If they want to move away from the Bay Area and work 100% remote, they’re being offered that option - that’s a change in the contract itself, in their favor, which they don’t have to take if they don’t want to.
What's being forced upon me? If I continue to work as before, nothing changes. Working remote full time wasn't an option in my initial employment agreement either, so it does not seem like that agreement applies to this situation.
That said, I recognize the difference between ideal and practical reality of the situation. Employees at tech firms typically have little individual negotiation power, but an employment agreement typically can't be amended at the whim of one party. I'm not saying you see it that way, just an outside observer here.
And if you die, then your spouse should file a wrongful death lawsuit against Facebook.
Why? Because all that could have been avoided if Facebook allowed you to work remotely.
You can also claim that the patterns in the central air conditioning circulation, is what caused you to get sick with the virus.
It’s fascinating that the country is forcing people to go back to work, when the crisis is not yet over. In fact, it’s even more dangerous now, than it ever was, with the super high infection rate count.
If they decide to move elsewhere that's a substantial and meaningful change from the agreement they entered into for the job. Of course their compensation will change.
Facebook didn't hire engineers to work remotely.
I mean, I guess nomadic vs settled is probably a spectrum, with most of us not falling at anywhere near yhe extreme poles. Yet, yes, I feel you.
... I shuttered at that thought.
Those steps include, but are not limited to: buying/renting property as a primary residence, registering a car, registering to vote.
South Dakota lets you establish tax domicile with no state income tax instantly. You need to show a receipt from a hotel or campground that you spent a night in the state. You also get a new driver's license and open a bank account. That's it. What stops me from setting up a remote workstation in SD, logging into work through VPN from there, and living wherever I want? :)
Once the pandemic lessens, I am switching my domicile from California to SD and semi-retiring away from Bay Area. I will have a legal presence and a computer in that area, but I will not live there.
There could be a business opportunity in setting up remote workstations in high rent areas to comply with these requirements.
There is no constitutional protection that prevents you from having to pay multiple resident state taxes, though in practice, it doesn't happen often. NY is notorious for claiming people are still residents after they have left-one factor is spending any part of 183 days in state, but another is intent and emotional attachment.
Lying to your company about residency and tax evasion to receive more money is fraud.
So it sounds like you’re going to have an interesting time either committing fraud or flying back and forth constantly to pull this off?
I bet if you were hired by a company while living in a lower COL city for market rates in that city, and then moved to the Bay area you’d be advocating for getting a COL adjustment to afford Bay area rents.
Considering fraud and tax evasion schemes to avoid the exact same adjustment in the other direction is ridiculous and selfish. If everyone did what you did housing rates would skyrocket in those cities like the Bay area and create even more housing crisis and displacement.
lowering salaries because company must adjust your taxes is lame excuse
But you have to tell them what state you have residency so they can withhold income taxes for the right state and not be liable for tax evasion.
You’re conflating two separate things
>What's different here is presumably the scale the policy is being applied at
Suggesting that FB is somehow going to apply any policy to its employees that is at a larger scale than the US government is a bit ridiculous.
Yes, I agree that's what FB will do.
For National Guard - it is based on Home of Record zip code. Many National Guard members travel >100 miles to their assigned Armory.
I moved from Austin to Seattle and my salary was adjusted up. If I move back it would adjust down (which is weird, because Austin is almost as expensive as Seattle now).
Extending the principle to remote work removes the comfort of accepted practice. We don’t have preconceived notions of what’s “fair” when it comes to remote work. It also removes the insulation layer of market dynamics. Companies need to pay more for talent physically located in an expensive metro area, just as they need to pay more for rent, etc. But when you remove the rationale of having your workforce all in one place, that also undercuts your rationales for paying different amounts in different locations. By paying more to remote workers who want to live in Connecticut versus Georgia, Facebook is subsidizing the lifestyle choices of some developers. But those lifestyle choices are heavily affected by race. (58% of African Americans live in the south, versus 27% of white Americans. One of the major trends of demographics in the US right now is a reversal of the movement of African Americans from the south to northern cities.) And as a result, that subsidy will have a significant disparate impact based on race. Under Facebook’s policy, you’ll have otherwise similarly situated developers being penalized in racially disparate ways for their individual housing choices.
Moreover, so long as Facebook presumes that developers need o be co-located, Facebook has a legitimate economic reason to locate in San Francisco or Austin. It’s easier to recruit good developers there. Any incidental contribution to disparate impacts on groups that happen not to live in those places yields to the economics. But when you abandon that principle, you’re standing pretty naked. For remote work, what legitimate reason does Facebook have to subsidize certain developers’ consumptive habits? I prefer to live near the water—should Facebook pay me more money as a result?
> Additionally, the Court outlined the contours of an important defense to a plaintiff’s prima facie case, namely that “policies are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers.” Businesses must be given “leeway to state and explain the valid interest served by their policies,” and should be able “to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system.”
> Further, the Court cautioned, as it did in Wards Cove and Ricci, that when a defendant offers a legitimate business justification, a plaintiff cannot sustain a disparate-impact claim if it cannot prove “there is ‘an available alternative … practice that has less disparate impact and serves the [entity’s] legitimate needs.’” The Court’s decision appears to create a more lenient standard for defendants than the standard the federal government has proposed, in line with the Court’s holding in Wards Cove.
> In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations.
> The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.”
Paying more for people physical located in Palo Alto can be justified by a “sound business consideration.” The company isn’t discriminating based on location, per se. It is simply bidding in a labor market. It just so happens that those bids need to be higher to recruit workers for a physical office in San Francisco than elsewhere.
With remote work, that “sound business consideration” disappears. You no longer care whether the person is physical located in San Francisco. So why should the company pay more for such workers? Justifying the policy as “necessary” and “not artificial” becomes more complicated than with in-person work.
Where is this assumption that equalizing pay across regions is a race to the top, and not to the bottom, coming from anyways?
You seem to be overlooking why geographic discrimination in salaries exists in the first place. As tzs points out in a sibling comment, it’s because when Google has an office in Mountain View, it doesn’t just care about hiring the Nth-percentile employee. It has to pay enough to hire the Nth-percentile employee who wants to live in Mountain View for that salary. Where the worker is located matters because Google has decided that it’s office should be in Mountain View, and further that it wants to have its teams under one roof. That economic justification doesn’t exist for remote workers.
And how does Facebook decide what the cost of living in your area is, anyway? The more data-driven Facebook makes that calculation, the more delicious the law suit gets. For example, DC is a fairly high cost of living Metro area, but there are some nice suburbs in PG County 30-45 minutes east of the city that are quite affordable. They’re also predominantly African American. Does Facebook set your salary based on living in the DC metro area, or do they drill down further and cut your pay for living in PG County? I can’t wait to see what happens.