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Two-thirds of employers consider cutting pay for working from home

TWO-thirds of businesses are considering slashing the pay of employees who decide to work from home permanently.

According to the latest research, as many as 68% of British firms are contemplating pay reductions.

Employees could see their salaries drop if they continue to work from home


Employees could see their salaries drop if they continue to work from homeCredit: Alamy

A survey of 150 businesses by HR software provider CIPHR found that 97% will let staff work from home at least some of the time now lockdown is over.

But the shift towards remote working could come at a cost for some employees.

Some major employers have already announced changes.

Google has said US employees who switch to permanent home working after coronavirus restrictions are lifted will face a pay cut.

Other tech giants including Microsoft, Facebook and Twitter have offered staff in the US less pay if they’re based in cheaper locations.

This month a senior minister reportedly said it’s unfair that civil servants still working at home should get the same benefits as those commuting in.

Location allowances, including extra money for London-based positions, have already been scrapped by many firms.

According to the research, 86% of employers have already suspended, reduced or removed geographical premiums.

Most of the changes have been temporary, but 14% of the businesses surveyed have made the changes permanent, the survey found.

Workers who want to be fully based at home are more likely to face a pay reduction than those who want to spend some time in the office.

In total, 39% of employers said they would cut the wages of permanent home workers, compared to 29% for “hybrid” staff.

Claire Williams, director of people and services at CIPHR, said: “Employers need to tread very carefully if they are going to look to remove location allowances or cut wages based on location, as a result of the shift to more home working.

“Not only because of the legal and ethical considerations and consequences but the long-term impact on employee loyalty and risk of increased turnover.”

What are your rights?

Your rights over a potential pay cut depends on what is in your contact.

It’s important to double check your contract to see what it says about changes to your salary.

If it says your boss can slash your pay it will be harder to fight the change.

But if it doesn’t, then you might be able to avoid a cut to your salary.

The first thing you should do is talk to your boss informally and see if you can come to a better arrangement.

If that doesn’t work, you could raise a grievance with your employer.

They should have a formal procedure for this, which will be outlined in your company handbook, on your HR intranet site or in your contract.

If your employer doesn’t have a formalised process, you can follow the one set out by Acas.

The next step could be to potentially bring a tribunal claim for unlawful deduction from wages.

It could be classed as an unlawful deduction in wages if the staff member is:

  • working the same number of hours
  • receiving the same amount of workload, and
  • held under the same obligations as when they were in the office

Employers will also risk being hit with sex discrimination claims if it is shown that more woman work from home than men.

Claims of constructive dismissal can be brought if an employer has reduced an employee’s pay with no justification for doing so and the employee is forced to resign.

But workers who have been with the company for less than two years could find themselves more at risk.

This is because various employment rights are not gained until the two year mark – including the right to claim unfair dismissal in most cases. 

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