Google could be cutting the pay of employees who decide to work from home permanently, according to reporting by Reuters. An internal pay calculator tool indicated that salaries could be reduced by as much as 25 per cent for employees whose offices are in cities with high costs of living but who will work remotely in areas with lower costs of living.
The change could be part of a trend of employers wanting to receive something in exchange for allowing employees to continue exercising a WFH option. Last year, Facebook told employees working remotely that their salaries could be cut.
In my experience as an employment lawyer, a 25 per cent reduction in pay could be considered a constructive dismissal, or termination, entitling employees to a severance package. The difference here is that Google seems happy to pay its employees what it used to, as long as they agree to come back to the office full-time.
Employers and staff can renegotiate their employment arrangement any time.
A constructive dismissal only happens when employers force a change on the employee, and the employee refuses. A significant change that would qualify as a dismissal includes a drop in pay, a reduction in hours, a new job title or duties or a detrimental change to someone’s commission structure.
Here are two examples of situations where employees face significant changes to their jobs and could claim constructive dismissals.
Being forced back to the office after moving away
In some cases we’ve seen, CEOs have told employees that the company’s pandemic WFH arrangement would be made available on a permanent basis. Employees have then relied on this information to sell their houses and move cities.
But now, many of those same companies are telling employees that the WFH arrangement can be permanent, but that they’ll have to accept a 15 per cent pay cut. Otherwise, they can commute to the office and receive the same pay as before.
Because affected employees relied on statements from management, and because they can’t realistically commute or move back, they can treat the reduction in pay as a termination of their jobs and leave with a full severance package — which could be as much as 24 months’ pay, depending on various factors.
Working from home to take care of young children
Many employees have been working from home to take care of young children while their classes are happening remotely. We’ve seen some companies not only allow this, but even offer to make the arrangement permanent — if the employees accept a 20 per cent pay cut. Most employees can’t afford the reduction in pay, but still have to stay home because school is remote.
Faced with an impossible situation, those employees may be able to claim that they’ve been constructively dismissed.
I’ve seen many employers asking for something in exchange for allowing employees to WFH permanently. Some are requiring pay cuts. Others are asking employees to accept a new termination clause in their employment contract limiting the amount of severance they will receive if they are let go from their job.
Considering the current job market, I tell my clients to think twice before accepting any unwanted changes to their job. At a minimum, I suggest employees immediately speak to an employment lawyer at Samfiru Tumarkin LLP to understand what they are agreeing to — or giving up.
Time is of the essence. If an employee works under new and unfavourable conditions for too long, the legal system may see them as having accepted the unwanted changes. In that case, a claim for constructive dismissal would no longer be a viable option.
Is your employer significantly altering aspects of your job without your approval?
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Lluc Cerda is an employment lawyer and associate at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in employment law and disability claims. The firm provides free advice through Canada’s only Employment Law Show on TV and radio.