Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did pre-pandemic, while one-in-five say they will remain primarily at home, according to a June study from the Angus Reid Institute. CP photo

Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did pre-pandemic, while one-in-five say they will remain primarily at home, according to a June study from the Angus Reid Institute. CP photo

Canadians working from home permanently should expect salary changes: experts

If you plan to stay, expect a change to your pay

TORONTO — When Mark Zuckerberg hosted a townhall in late May with Facebook’s 48,000 employees, some were tuning in from new cities they had scrambled to move to as the pandemic hit.

Zuckerberg had a clear message for them: if you plan to stay, expect a change to your pay.

“That means if you live in a location where the cost of living is dramatically lower, or the cost of labour is lower, then salaries do tend to be somewhat lower in those places,” he said on the video conference, where he announced more employees would be allowed to work remotely permanently.

Zuckerberg gave Canadian and American workers until Jan. 1, 2021 to inform the company about their location, so it can properly complete taxes and accounting and use virtual private network checks to confirm staff are where they claim.

The demand is part of a new reality Canadian workers are being confronted with as employers try to quell the spread of COVID-19 and increasingly consider making remote work permanent.

The shift means many companies are having to rethink salaries and compensation, while grappling with the logistics of a new work model.

Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did pre-pandemic, while one-in-five say they will remain primarily at home, according to a June study from the Angus Reid Institute.

Like Facebook, Canadian technology companies Shopify Inc. and Open Text Corp. have already announced more employees will soon have the option to permanently work remotely.

Both declined interviews with The Canadian Press, but Richard Leblanc, a professor of governance, law and ethics at York University, said he wouldn’t be surprised if their staff that relocate will see their pay change.

“It’s inevitable because the cost and expense structure of work has changed,” he said.

“If you, for example decide, that you could do the majority of your work from well outside the Greater Toronto Area…and you want to buy a home in Guelph or in Hamilton, should we expect the base salary for those individuals might change? Yes, because your cost of living has changed and your expenses have changed.”

If companies calculate salaries properly, neither the business nor workers should feel their salary adjustments are unfair, Leblanc said.

However, figuring out what to pay staff transitioning to permanent remote work is tough, especially with a pandemic raging on and forcing some businesses to lay off workers or keep companies closed.

Owners have to consider what salaries will help them retain talent, but also how their costs will change if workers are at home.

Companies, for example, may be able to slash real estate costs because they don’t need as much — or any — office space, but may now have to cover higher taxes, pay for their workers to buy desks or supplies for their homes or offer a budget for them to use on renting spaces to meet clients.

“(Businesses) are looking at every line item on their on their income statement….because they want to make sure they can survive and thrive over the long-term,” said Jean McClellan, a partner at PricewaterhouseCoopers LLP’s Canadian consulting practice.

Companies like GitLab, an all-remote company in San Francisco focused on tools for software developers, may offer some clues about how Canadian companies opting for permanent remote work can tackle salaries.

When GitLab started offering permanent remote work years ago it built a compensation calculator combining a worker’s role and seniority with a rent index that correlates local market salaries with rent prices in the area.

Anyone can visit GitLab’s site and plug in a role, experience level and location to find a salary.

GitLab’s junior data engineers, for example, make between $50,936 and $68,913 if they live in Whitehorse, Yellowknife or Iqaluit, where the Canada Mortgage and Housing Corporation said the average rents for a two-bedroom home last October were $1,695, $1,100 and $2,678 respectively.

That salary shoots up to anywhere from $74,359 to $100,603 for those living in Toronto, Vancouver or Victoria, where CMHC reported the average rents for a two-bedroom home last October were $1,562, $1,748 and $1,448 respectively.

Leblanc warned that varying remote work salaries can create “a global competition for talent in an online world.”

People who apply for permanent remote jobs, he said, may find their fighting for the role against far more people than ever before because companies will be able to source talent living anywhere in the world.

The companies that don’t offer remote work at all could also find themselves at a disadvantage, if their industry starts to value flexibility and look less favourably at companies that don’t offer it.

GitLab settled on its model and calculator because the company said they offer transparency and eliminate biases around race, gender or disabilities.

Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed up because every time he hired someone, there was a conversation around reasonable compensation.

The negotiation would usually revolve around what the person made beforehand, which was dependent on what city they were in. Gitlab scrapped that model in favour of the calculator and also started letting workers know if they move their salary could change.

However, GitLab acknowledges that many people see paying someone less for the same work in the same role regardless of where they live as ”harsh.” The company disagrees.

“We can’t remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do),” it says.

“We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable.”

Coronavirus

Just Posted

Alberta Premier Jason Kenney arrives at the 2021 budget in Edmonton on Thursday, Feb. 25, 2021.THE CANADIAN PRESS/Jason Franson
Alberta launches COVID vaccine lottery with million-dollar prizes to encourage uptake

The premier says the lottery will offer three prizes worth $1 million a piece, as well as other prizes

The City of Red Deer sits at 249 active cases of the virus, after hitting a peak of 565 active cases on Feb. 22. (Black Press file image)
Red Deer down to 119 active COVID-19 cases

Province identifies 179 new cases Saturday

Member Terry Parsons’ custom built track vehicle.
Forestburg’s Area 53 Racetrack gears up for action-packed season

Site will also host a portion of the ‘Miles of Mayhem’ event in July

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Christian Eriksen in stable condition, Euro 2020 match resumes

Eriksen was given chest compressions after collapsing on the field during a European Championship

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Airport ground crew offload a plane carrying just under 300,000 doses of the single-shot Johnson & Johnson COVID-19 vaccine which is developed by the Janssen Pharmaceutical Companies at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. THE CANADIAN PRESS/Nathan Denette
1st batch of Johnson & Johnson vaccines won’t be released in Canada over quality concerns

The vaccines were quarantined in April before they were distributed to provinces

Most Read