The technology giant has developed a pay calculator that lets employees see the effects of working remotely or moving offices. Some remote employees, especially those with a long commute, could have their pay cut without changing address.
It says however it has no plans at this time to implement the policy in the UK.
Employees in many businesses across the world have proved that working from home permanently is viable during the Covid pandemic. But now many companies are looking ahead to how employees will work as the pandemic recedes. Silicon Valley firms, some of which are keen to get employees back to their desks, are experimenting with employee pay structures as a result.
Big tech including Microsoft, Facebook and Twitter have offered less pay for employees based in locations where it is less expensive to live.
A Google spokesperson said: "Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from. Our new Work Location Tool was developed to help employees make informed decisions about which city or state they work from and any impact on compensation if they choose to relocate or work remotely."
General dissatisfaction with new Work Location tool
One Google employee, who works in Seattle but has a two-hour commute, complained to Reuters of being faced with a 10% pay cut for choosing to work from home full-time, saying he ‘didn’t do all that hard work to get promoted and then take a cut’.
And Jake Rosenfeld, a sociology professor at Washington University in St. Louis, said Google's move raises alarms about who will feel the impact most acutely, including families.
He said: "Google doesn't have to do this. Google has paid these workers at 100% of their prior wage, by definition. 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."
An example of the location tool is a Google employee in Stamford, Connecticut, which is an hour away from New York by train, would be paid 15% less working remotely; while there were 5% and 10% differences in the Seattle, Boston and San Francisco areas.
Google will not change employees' pay if they work fully remotely from the same city.
Hybrid working practises
Some other tech giants, such as Cisco, have put in place a hybrid working plan that has no mandates about how often employees go into the office. It expects that less than a quarter of its workforce will want to be in an office for three or more days a week.
However others, such as Goldman Sachs, want workers to return to offices.
The investment bank's boss, David Solomon, said in February that working from home was "an aberration" rather than "the new normal".
The Chartered Institute of Personnel and Development (CIPD), which represents human resource professionals in the UK, said it was always "the safest option" for firms to seek express written agreement from employees before changing the level of their pay. In guidance to employers, it says that imposing a pay cut is a "high-risk" approach, since workers can bring claims for breach of contract or even constructive unfair dismissal.