#Employees who switch to remote work should make more money

Not long ago, a friend told me he’d bought a new house. 

“Congratulations!” I said. “Where will you be living?” 

“I can’t tell you,” was the somewhat puzzling answer. All I could guess was that he might not have closed on the new house yet and didn’t want to jinx the sale. 

But then, just a month later, the same thing happened again. Another friend, another new house, and a secret location. I really began wondering what was going on. 

I’d still be in the dark if not for a real-estate agent who filled me in on the latest trend among homebuyers. With more people working remotely due to COVID-19, quite a few companies are basing salary decisions on their employees’ home ZIP codes. 

For example, an employee at the Palo Alto, Calif., headquarters of VMware who decides to permanently move to Denver and work there remotely faces an 18 percent salary reduction, according to a Bloomberg report. Twitter and Facebook are also considering salary adjustments for remote-work employees who relocate to less expensive parts of the country, the report states. 

As a result, some homebuyers are going to great lengths to evade their employers’ “ZIP-code penalty.” They increasingly insist that real-estate agents keep the sales confidential, anonymized from the public register. They use “stealth addresses” to keep their actual addresses secret from their employers’ HR departments. Worried that people in their social circles will inadvertently spill the beans, they are hiding the location of their new homes from long-time friends. 

Back in the day, companies would offer a premium wage to attract the right talent to headquarters, usually based in an expensive urban area. But, in a world with no borders and HQ as close as the nearest Wi-Fi connection, any justification for where-you-live premiums seems dated. 

Analysts estimate that the work-from-home revolution has lifted productivity to unprecedented levels. Simultaneously, downsized office space, closed lunch rooms, halved electricity bills, and reduced cleaning and security have generated savings in the billions for corporations, big and small. At the same time, many firms have used the work-from-home revolution as a convenient excuse to demand that employees reconfigure home offices, upgrade bandwidth, and set up professional-quality television studios in their bedrooms. After employees have met all these demands, corporations can beam a brand-new pipeline of 24/7 bureaucracy straight into their workers’ private space. 

It’s all great for the corporate bottom line — and where their employees choose to live has become almost irrelevant. 

As a result, work-from-home employees should be given a stipend to cover their office expenses. (Google is already doing this.) Meanwhile, those tapping into the company’s shared (and quite expensive) facilities — the canteen, the gym, the technical hardware — on a daily basis might receive a slightly reduced salary. Of course, the company is still going to require essential physical catchups to maintain company culture, including corporate townhalls, vital workshops and staff parties. These remote employees who receive a stipend to support their regular remote work-life should be expected to shoulder the financial responsibility for transportation to these “must attend” events. That’s a sensible trade-off. 

The alternative, applying yesterday’s mindset to a post-coronavirus business reality, can only backfire. Employees will be tempted to cross ethical borders while employers apply increasing amounts of bureaucratic red tape. Rather than this uncomfortable, unproductive situation, companies should be focused on what matters: securing the best talent, building a thriving culture, and fueling the whole enterprise with common sense. 

New York Times bestselling author Martin Lindstrom’s latest book, “The Ministry of Common Sense: How to Eliminate Bureaucratic Red Tape, Bad Excuses, and Corporate BS” (Houghton Mifflin Harcourt), is out Tuesday. Visit MartinLindstrom.com/CommonSense