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I did not say all remote workers live in low cost areas. I merely said that remote workers who choose to live in low cost areas will eventually see their pay decrease vs peers who work in high cost areas, job for job. Yes, talent is talent and it costs what it costs, but employers are not going to add that "you live in downtown Manhattan" premium for a worker who lives in Joplin Missouri and spends nothing to commute.
This is interesting. So, does this imply, that people who have already left their large urban area for a small town to work remotely with their company will see their pay ratcheted down, because the COL in their new locale is lower? A moved-away penalty? Or maybe they's discover they're being passed over for raises, even though they do good work?
This is interesting. So, does this imply, that people who have already left their large urban area for a small town to work remotely with their company will see their pay ratcheted down, because the COL in their new locale is lower? A moved-away penalty? Or maybe they's discover they're being passed over for raises, even though they do good work?
I think the point being made was that fully remote positions will be paid at national (and perhaps global) pay scales rather than inflated local pay scales. That won't happen overnight, but I tend to agree.
I don't know about you, but my company has to have an actual legal address of residence (not a P.O. box) for tax purposes. I'd think trying to claim you lived in, say, New York State, but actually you lived in Kansas would catch up to you when it came time to file taxes (somebody's going to notice the disparity.) I don't think most folk would want to risk obvious tax fraud.
And that is an example of why you can't necessarily work for any company and live anywhere. The company has to pay taxes and follow employment laws of the state where you work, and that involves a certain level of legal organization. A big company with corporate offices around the country might do this easily, but others might only allow people to live in the home state or neighboring states of the HQ.
They are bilking the system. People are trying to maintain their laziness with LITTLE accountability as much as possible for long as possible. Thats the bottom line. We live in a society of someone taking advantage of every little thing possible. If they weren't, they wouldn't be fighting tooth and nail for it. Thats human nature. I have no problem with it per se, but what I DO have a problem with is those that had to go to work through this entire pandemic and bust their arse, should have been compensated a whole helluva alot more than the WFH bilking crew.
I saw this is my field first hand. The Pandemic hit, the at sight workers got their hours cut and at risk of a deadly disease for their troubles, the WFH lazies kept their same pay because they were on salary. Why wasn't the WFH salary cut? Excuse. me? Its sickening truthfully. And they're still working from home. What the hell. Its endemic now.. Its not pandemic. And there is vaccines. Im tired of lazy people being given a pass for everything in this backwards society we live in now. Its a big reason why we were in the shape we are in now. A trainwreck quite frankly
And that is an example of why you can't necessarily work for any company and live anywhere. The company has to pay taxes and follow employment laws of the state where you work, and that involves a certain level of legal organization. A big company with corporate offices around the country might do this easily, but others might only allow people to live in the home state or neighboring states of the HQ.
Yes. The company I work for only hires people living in four states. I don't know what would happen if someone moved to a different state after being employed. So far, it hasn't happened, but I guess they would be choosing to leave the job. I think the reason must have to do with taxes, I'm not really sure.
And that is an example of why you can't necessarily work for any company and live anywhere. The company has to pay taxes and follow employment laws of the state where you work, and that involves a certain level of legal organization. A big company with corporate offices around the country might do this easily, but others might only allow people to live in the home state or neighboring states of the HQ.
The worker simply fills out the W4 with their home address. Then the company files taxes for the state which the employee lives in, if that state has income taxes, plus unemployment taxes for that state. Many companies use ADP for payroll and ADP handles the submission of taxes to each state as needed. This is how it works for fully remote employees from their first day of work going forward. A physical corporate office isn't needed in that state.
The worker simply fills out the W4 with their home address. Then the company files taxes for the state which the employee lives in, if that state has income taxes, plus unemployment taxes for that state. Many companies use ADP for payroll and ADP handles the submission of taxes to each state as needed. This is how it works for fully remote employees from their first day of work going forward. A physical corporate office isn't needed in that state.
Even using an accounting/payroll service it adds a level of complexity and complexity adds expense.
This is interesting. So, does this imply, that people who have already left their large urban area for a small town to work remotely with their company will see their pay ratcheted down, because the COL in their new locale is lower? A moved-away penalty? Or maybe they's discover they're being passed over for raises, even though they do good work?
I dont know the mechanism. It may be that remote workers keep their current windfall but miss out on future raises until equilibrium is met for the job they are doing in their locale. I was an engineer in Sacramento and San Francisco for 35 years. I am well aware engineering pays more there than in Oklahoma City or Sioux Falls. Employers are well aware of this too.
I don't know how rebalancing will occur. I just know that businesses like to maximize profits and minimize losses. Top 5% talent may get the same pay wherever they live, but the bottom 80% are somewhat expendable and interchangeable. The bottom 50% are basically cannon fodder, and indistinguishable from each other and imminently replaceable.
If you move from California to Florida, employers will take into account that your net has leaped up now that you do not have to pay 9% California taxes before paying that lower mortgage bill.
Businesses are eventually going to rebalance and do so sooner than later.
A friend of mine and her husband work for a company that allows WFH, but the rule is the employees have to live within 75 miles of one of the offices. Now, it doesn't matter *which* office--so an employee could choose to live with 75 miles of say, their Kansas City office, or their Nashville office, or whichever. I actually like this idea--the employees aren't completely scattered to the four winds (which the company probably likes), but they still get a choice of where to go.
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