What are your rights if an employer threatens a WFH pay cut?

·Writer, Yahoo Finance UK
·4 min read
It’s possible you may have no choice but to change your job to remain on the same salary. However, you should still consult legal advice before taking any steps to leave. Photo: Getty
It’s possible you may have no choice but to change your job to remain on the same salary. However, you should still consult legal advice before taking any steps to leave. Photo: Getty

The pandemic has shown that working from home is a viable option for many employees, but some workers may find themselves losing out financially. Google (GOOGL) employees in the US who choose to work from home permanently may get a pay cut, according to a company pay calculator.

In an experiment taking place across Silicon Valley, including at Facebook (FB) and Twitter (TWTR), employers are cutting pay for those who move farther away to cheaper areas, Reuters reported. Remote employees, especially long-distance commuters, could see their wages docked without changing address.

Other tech firms such as Reddit are planning to pay US employees the same no matter where their employees are based. But if your employer is considering cutting your pay because you’re a home-worker, what are your legal rights — and is there anything you can do?

Read more: Should new hires be offered 'golden hello' joining bonuses?

“Employment law does not permit your employer to unilaterally change a fundamental term of your employment contract — such as pay — without your agreement,” explains Karen Jackson, managing director at the employment law firm Didlaw.

“This is the case even if your contract says your employer reserves the right to make changes. They need your agreement to change your pay unless it is to your advantage, for example, they can increase your pay with a pay rise without asking your consent.”

Ultimately, any employer who tries to do this risks a breach of contract. If you have been employed for more than two years it could lead to an unfair dismissal claim.

“Your employer might threaten to dismiss you and offer you new contract terms — this is known as fire and rehire — in order to get you to change your salary to lower. This is a high-risk option for them and will still potentially give you legal claims,” says Jackson.

Watch: Google staff working from home could see pay cut

Despite this, some employers may consider reducing the pay of remote workers. Recently, one unnamed cabinet minister told the Daily Mail that officials who would not return to the office should have their pay cut. So what are your options if you find yourself in this situation?

“If you are in this situation, always take early legal advice,” says Jackson. “There are plenty of really good online resources such as ACAS and the Citizens Advice Bureau which both have excellent online resources and free advice helplines. Most good solicitors will offer an initial free consultation.”

Although it might be tempting to hand in your resignation and find other work, it’s important not to make any decisions about your employment without getting advice.

Read more: Meet the remote CEO who has only met one of his employees in person

“For example, if you resign in haste, in response to your employer’s conduct, you are letting them off the hook and potentially making it easier for them to get the better of you,” she says. “Don’t resign. You can raise a complaint either informally or via your employer’s grievance procedure but if the employer is taking a policy decision on reducing salaries this may be futile.”

It’s possible you may have no choice but to change your job to remain on the same salary. However, you should still consult legal advice before taking any steps to leave.

“If you are in a group that is protected by the Equality Act — disabled, pregnant or new mother — you may have additional arguments to deploy to resist a change in salary. For example, if you are disabled you could argue that it is a reasonable adjustment for you to work from home but that may not get you very far either.”

You may be able to find a middle ground with your employer too. It may help to calmly explain how you are still doing the same job with the same responsibilities, even when working from home.

Read more: How to negotiate a higher salary in a job interview

“If your employer is not willing to bend but you want to keep your job and avoid employment tribunal litigation, you might see if there is a compromise around your employer paying you a reduced salary but with a contribution to your household bills for the power you use at home,” says Jackson.

“There is an HMRC tax concession around payments to employees who work from home. You could also seek to agree to a mid-way between your current salary and what the employer proposes to reduce your salary to but this may be an uphill battle.”

Watch: How to negotiate a pay rise

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