Reducing The Pay Of Remote Workers – The Risks For Employers

The pandemic has had a significant impact on employment arrangements and practices. One of the most prevalent changes is that more workers are now spending at least part of their working time working remotely.

Before the pandemic, there was a slow trend towards remote working but once the first lockdown in March 2020 was announced by the Government, there was an instant shift to remote or home working for many UK workers. Figures published by the Office for National Statistics (ONS) in June 2021 reported that there was an average rise from 27% in 2019 to 37% in 2020 in employees working remotely.

This change to the way of working has proved to be popular with many workers. As a result, many employers across the UK have reconsidered their approaches to how and where their employees work.

Reports of employers reducing the wages of remote workers

However, there have been several reports, primarily from the US, recently which have suggested that some employers – Google, Twitter and Facebook – are looking to reduce the pay of workers who choose to work from home permanently.

In England, an anonymous senior Cabinet minister is reported to have said last year that civil servants who refuse to return to office work should have their wages reduced, as it isn’t fair that those who choose to work from home should receive the same salary as those who commute.

Can an employer legally reduce the wages of a remote working employee?

This will depend on the provisions in an employee’s contract of employment or relevant trade union agreement.

If an employer pays an enhanced rate that is specifically tied to working in a particular area or office (such as a “London weighting”) they may be able to withdraw this when an employee is no longer working in that area.

In other cases though, it is likely that any move to reduce pay would be a contractual variation and therefore the starting point for employers would be that they need to consult employees on this and seek their agreement to the proposed change, otherwise, they will risk breaching their employees’ contracts and claims for lost wages and/or constructive dismissal as a result.

Even if an employer can legally reduce an employees’ salary for remote working, it may well be detrimental to workforce culture and could affect staff turnover. It would also create a two-tiered workforce, meaning that home working staff members may well feel less valued than those working in the office, which will negatively affect staff morale and culture.

For staff members who feel forced to return to office working to avoid having their salaries cut, they may feel like they are being bullied by their employer into returning and harbour resentment about no longer being able to take advantage of the benefits that working from home affords. Again, this may affect staff turnover.

Adopting a hybrid working approach

Instead of having a fully in-office or working from home approach, it may well be advisable for employers to instead adopt a hybrid working model – a mixture of home and office working.

The benefits of introducing a hybrid working arrangement include greater flexibility and a work-life balance for employees. For employers, they can reduce their overheads and the size of their commercial premises, and are also likely to benefit from the improved mental well-being that hybrid working offers their employees.

We would recommend that any employer considering implementing hybrid working arrangements, has a suitable policy in place to govern expectations.