Alphabet Inc Class A (NASDAQ: GOOGL) may cut the pay of US employees who decide on permanently working from home. The company has made a payment calculator to show its employees the effects of changing addresses or working remotely. Remote employees with long commutes could receive pay cuts. However, employees working remotely from the same city will not receive a pay cut.

Google has made no plans to implement these changes in the UK. In the UK, employment law does not allow an employer to change the contract without getting consent from the employee or terminating their agreement and renegotiating them. A pay cut could result in employees claiming breach of contract.

Companies make plans on how employees will work after the pandemic 

As the pandemic dies down, companies must now decide how employees will work. Many have opted to change their pay structure. For example, Microsoft Corporation (NASDAQ: MSFT) is planning to pay less to employees who live in more affordable areas. Twitter Inc (NYSE: TWTR) and Facebook, Inc. (NASDAQ: FB) also plan on doing the same thing.

Zillow Group Inc Class A (NASDAQ: ZG) and Reddit plan to use the same pay structure for all their employees regardless of where they live. The two companies believe this move would improve diversity.

Cisco Systems Inc (NASDAQ: CSCO) has developed a hybrid plan that allows employees to work remotely and in their offices. On the other hand, Goldman Sachs Group Inc (NYSE: GS) wants employees back in the office. Some Silicon Valley firms have voiced the same opinion.

Expected consequences of a pay cut

According to Emma Bartlett, an employment lawyer, the move by Google could feel demoralizing to employees who are paid less to do the same amount of work as their counterparts. It could also widen the gender pay gap. Women, generally viewed as primary caregivers, would be affected by the pay cut if they choose to stay home and look after their children.

Additionally, workers who work remotely could be treated differently from those who work at the office. For example, it could affect them in matters such as accessing clients, promotion, and training.