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Should Employers Cut Your Salary If You Change Cities?

CNN reports:

Stripe is paying employees $20,000 if they relocate from expensive cities such as San Francisco, Seattle and New York, where the company has offices. But workers who make the move will have to take a 10% pay cut.

“Twitter Inc. and ServiceNow Inc. have all considered similar measures,” reports Bloomberg. And Forbes notes that other companies are also grappling with similar policies:

According to Bloomberg, “employees who worked at VMware’s Palo Alto, California, headquarters and go to Denver, for example, must accept an 18% salary reduction. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay.” Rich Lang, VMware’s senior vice president of human resources, offered a positive alternative. When a person relocates and works remotely, they “could get a raise if they chose to move to a larger or more expensive city…”

Facebook CEO Mark Zuckerberg forewarned his personnel, saying those who flee to lower-cost cities “may have their compensation adjusted based on their new locations.” The chief executive added, “We’ll adjust salary to your location at that point. There’ll be severe ramifications for people who are not honest about this.”

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