05/22/2020 10:27 EDT

Facebook's Remote Workers Face Pay Cuts If They Move To Cheaper Locations

The company will be watching closely where its employees log in from.

If you’re one of the many people hoping the new age of working from home will mean you can set up shop in a more affordable location, there’s a chance you will be disappointed.

Your employers may want to keep the savings for themselves.

That’s the case with Facebook, which laid out plans this week allowing many employees to work from home forever. This had some employees reportedly fantasizing on message boards about moving out of pricey Silicon Valley and working from beach homes or affordable cities in the U.S Midwest.

But Facebook CEO Mark Zuckerberg told workers this week there will be a catch: Once they’ve declared their official work-from-home location ― which they have to do by Jan. 1, 2021 ― their salary will be adjusted to reflect the cost of living in their new community.

Christophe Morin/IP3 via Getty Images
Facebook founder and CEO Mark Zuckerberg appears at the Viva Tech start-up and technology gathering in Paris on May 24, 2018. Facebook is planning to reduce pay for remote workers who move to more affordable cities.

“That means if you live in a location where the cost of living is dramatically lower, or the cost of labor is lower, then salaries do tend to be somewhat lower in those places,” Zuckerberg told employees, as quoted at MarketWatch.

And Facebook will be monitoring employees closely to make sure they are located where they claim, as it has to avoid violating tax laws, he added. Employees trying to get around the rules will face “severe ramifications.”

Silicon Valley and the nearby San Francisco Bay Area have some of the highest living costs in the world, in no small part due to the tech boom in recent decades. A household needed to earn US$343,000 (C$481,000) in 2019 to afford a median-priced house in the city of San Francisco, or US$198,000 (C$278,000) in the Bay Area as a whole.

Frustrated tech workers and others increasingly want out. A survey published last year from public relations firm Edelman suggested that half of Bay Area residents want to leave, with living and housing costs cited as the top reason. Among millennials, that rose to 66 per cent.

Zuckerberg argues the shift to remote work means Facebook won’t be as dependent on the labour pool strictly available in California, which will allow it to build a more diverse workforce.

“When you limit hiring to people who either live in a small number of big cities or are willing to move there, that cuts out a lot of people who live in different communities, different backgrounds or may have different perspectives,” he said. 

“Certainly being able to recruit more broadly, especially across the U.S. and Canada to start, is going to open up a lot of new talent that previously wouldn’t have considered moving to a big city.”

Zuckerberg said Facebook plans to “aggressively” ramp up hiring of remote workers, and he expects half of Facebook’s workforce to take him up on the work-from-home offer over the next five to 10 years.

With a file from Reuters