September 25, 2020: Should You Cut Pay When Workers Go Remote?

Gusto Editors

September 25, 2020

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Editor’s note: We can’t discuss the news without acknowledging that this has been another heartbreaking week for Americans. We know many in the Black community—as well as allies—are hurting right now, and we stand with you.

Should you adjust remote workers’ salaries?

If it wasn’t true before COVID-19, it’s certainly true now: Remote work is here to stay. Companies big and small have made plans to partially or completely distribute their work forces—and with that comes a couple considerations.

As workers move out of state, you should definitely be aware of the tax implications (brush up on those here)—but you might also be thinking about salary adjustments. Location often plays a role in determining salary, due to differences in cost-of-living, market competition, and so on. So it makes sense to make changes when employees move from high- to low-cost areas… right?

Maybe not. Before you adjust salaries, carefully consider how it can impact your bottom line:

  • Lowering salaries can have a negative impact on morale and productivity, especially during a financially stressful time. 
  • It can raise equity issues among employees doing the same work.
  • Employee turnover may rise.
  • And finally, it might not actually result in major payroll savings.

Or, with caution and care, it might be the right move for your business. It’s important to understand both sides, especially now, so read our full take here.

Headlines from the week

Top relief options for the week

  • James Beard Foundation’s Food and Beverage Investment Fund for Black and Indigenous Americans provides grants of $15,000 each equally across Black and Indigenous populations throughout the United States.
  • Artist Relief Fund distributes $5,000 grants to creative professionals affected by the coronavirus pandemic. Artists, writers, filmmakers, musicians, dancers and other creative professionals who are 18 and older can apply.
  • Legacy Foundation and Indiana Black Expo’s COVID-19 Small Business Relief Fund will provide one-time grants from $2,500 to $5,000 per business. Priority will be given to minority and women-owned businesses.
  • City of Reno’s Small Business Relief Fund for Minority and Women-Owned Businesses will administer awards up to $20,000 to businesses owned by community members from underrepresented groups.
  • See more relief options in our Small Business Relief Finder.

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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