Google. Microsoft. Facebook. The Civil Service. Along with 68% of UK employers surveyed by CIPHR, these are just some of the organisations seriously considering reducing the pay of employees who work either permanently from home or under a hybrid working pattern.
This is despite the fact that 97% of the same respondents indicated staff would be allowed to work from home at least part of the time moving forward.
The justification makes sense on the face of it. The ability to work from anywhere rather than out of large town or inner-city locations may well lead to a lower of cost of living.
Homeworking could be framed as a desirable benefit having a financial value and therefore mean a lower salary is justified in return.
Chris Dobbs discusses the legal implications of lowering the pay of employees working from home.
What legal implications does cutting salaries for homeworkers have?
However, employers should think carefully about the legal and morale implications of making these kind of decisions.
It is, of course, very easy to point out that those working from home benefit from lower travel costs, increased flexibility and more time at home among other things but do these actually add up to justifying lower salaries especially when the costs to the employer may have gone down?
Can an employer reduce your salary?
The rate of pay is generally considered a fundamental term of the employment contract. It is unlikely that an employer with have lawful grounds for reducing pay without consulting with the employee affected first.
There may be a contractual provision allowing it but these are incredibly rare and usually spotted by employees before the contract is signed.
Where more than 20 employees are affected by a proposed pay cut arising from the same circumstances, there is a legal obligation on the employer to consult much like a redundancy situation.
Can my employer reduce my salary without consultation?
Any change which is not agreed runs the risk of claims by the employee including for breach of contract, constructive dismissal and unlawful deductions claims. Failing to consult in mass situations also carries a protective award of 90 days’ pay.
A reduction which does not arise from an associated reduction in productivity or value to the business is always going to look arbitrary.
Is it illegal to pay two employees doing the same job differently?
There is, in principle, nothing wrong with paying two people different amounts to do the same job. This is a matter for negotiation and contract between the employee and the employer.
However, this can become a problem either when staff find out about the difference and begin to question it or when there is an apparent case for discrimination.
What potential issues might arise from paying homeworkers less?
Click here to read the full article.