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Paycuts: Counting the cost of WFH

If you're currently working from home, it’s likely this is with the agreement of your employer. It is also likely to be because of the previous government guidance regarding coronavirus and the fact that many businesses haven’t yet had a full return to the workplace. In this context, any pay reduction is likely to seem unfair.

People who are now working from home haven’t necessarily had a “payrise” simply because they are doing less commuting – in some situations people have incurred financial costs in trying to make their home more compatible with home working moving forward. Some may even have moved to bigger homes to do so.

There might be some argument that being able to work from home is an employee benefit, but after what may be about 18 months of remote working, many employees are actually keen to attend their workplace in person.

Your pay and benefits are an important part of your working relationship with your employer. As an employee your entitlements to pay and benefits should be set out in your employment contract. If your employer is seeking to make changes to your employment contract they should have a business case for doing so, and I would expect them to inform you, explain why these changes are needed and get your agreement to any changes before they come into effect. They should also be able to explain to you what other alternatives to a pay cut have been considered.

Some occupations have jobs which have higher salaries based on workers living and working in cities, but not all. If there’s no suggestion in your contract that your salary depends on your work being done in a particular location then it may be difficult for your employer to argue that you should now be paid less for doing the same work from home, particularly if you can show that you have performed well or better than before and you have hit your targets during lockdown.

If you’re an employer seeking to reduce staff pay simply because your staff is now permanently working from home, then you should proceed with caution and seek legal advice immediately and before attempting to make any pay reductions. In some cases, employees may also be working from home for reasons connected to childcare or caring for disabled or elderly dependents. Where there are factors like this and pay is unfairly reduced, this could give rise to a potential discrimination claim.

If your employer attempts to unfairly reduce your pay without your prior agreement then you may potentially have a claim against them in respect of the pay reduction. If you’re an employee with over two years of service then you may have a potential constructive unfair dismissal claim if you are forced to resign in circumstances where your pay is reduced without your agreement. If you’re concerned about any issue concerning a potential pay cut then you should seek legal advice immediately and without delay.

Where a pay reduction is agreed between you and your employer then this should ideally be done in writing so that both sides are clear on what has been agreed and when, so that no future misunderstandings arise.

Ultimately even if an employer can reduce staff pay, that doesn’t mean that it should do so – this could badly damage working relationships and the reputation of a business.

If you are experiencing any problems at work, then it's never too soon to get help and support with your employment rights - please feel free to contact us in confidence for an initial discussion.

“What’s clear is that Google doesn’t have to do this. Google has paid these workers at 100 per cent of their prior wage, by definition. So it’s not like they can’t afford to pay their workers who choose to work remotely the same that they are used to receiving.””