December 15, 2020

Can you Offer Reduced Pay to Homeworkers?

As a new year dawns and COVID-19 vaccines roll out across the country, we examine the possible impact on the UK’s increasingly ‘agile’ workforce.

It’s estimated that over 60% of the UK adult working population has worked from home at some stage during the pandemic. And 25% plan to work from home even when things return to normal. For many, homeworking has brought savings of up to £50 per week and, of course, reduced commute times. Lots of staff now want to retain provisions initially adopted as an expediency.

In fact, this has already led Twitter to suggest to their San Francisco staff that they’re happy for them to continue homeworking permanently. Interestingly, they also announced that their pay would reduce proportionally to reflect lower living costs in their home location.

Admittedly, property prices in the San Francisco area are some of the highest worldwide. But major UK cities – particularly London and Edinburgh – have pretty fierce property costs of their own.

Risks of Offering Reduced Pay to Homeworkers

Is there any legitimacy in an employer reducing someone’s pay because the individual saves time and money on their daily commute? And isn’t the employee likely to point to increased domestic costs they face? Their electricity, energy costs, water charges etc. are all bound to increase. And, unless the employer pays for daily travel, isn’t it opportunistic to try and reduce pay when it’s the employee’s costs and savings at stake?

This is to say nothing of potential legal implications. People are paid for the work they undertake – not where they live. If the majority of homeworking candidates are women, you could be sucked into potential indirect discrimination challenges. Dependent upon the make-up of your workforce, you may even face claims for equal pay for work of equal value.

If you reduce pay, you also risk losing good staff to organisations that still pay people for what they do – not their commuting pattern. However, with an anticipated surge in unemployment in the early months of 2021, could such pay reductions be a possible way of avoiding redundancies?

The Positives of Homeworking

The greatest impact, arguably, is on your property portfolio. Downsizing buildings, offices and associated costs can be significant. Overall office vacancy rates in London are expected to increase by 20% over the next two years. Many organisations are currently considering downsizing because of the number of people wanting to work from home.

The recruitment catchment area has significantly increased. We’ve all discovered business meetings can function pretty well remotely. You may no longer need to employ the local candidate. Now, geography is arguably less important than internet speed and connection.

At least one in four staff say they now want to work from home permanently. It’s well established that there is no loss of efficiency on the part of those who do. Often, they’re actually more efficient.

But homeworking isn’t for everyone. And the move to homeworking normally implies a change in contractual terms. If you are going to adopt homeworking, it’s important to get it right.

Important Considerations

  • You need a comprehensive, formal agreement signed with each individual.
  • You must risk assess the new work environment for suitability.
  • You’re still potentially responsible for their health and safety when working – even in their own home.
  • Always consider the legalities, employer liability insurance for instance.
  • What about the security of equipment you provide? Confidentiality in respect of other occupants of the property?
  • What about data transmitted – particularly personal data? Are there any data protection implications?
  • How will you line manage remote workers effectively? Will they still feel part of your team?
  • What about wellbeing? Not everyone takes to homeworking.
  • Do you understand the tax implications for someone working from home?
  • What if they make a legal request for homeworking? Do you have to agree? Do you know when you can say no?

Did You Know?

Moorepay offers a consultancy package to help you resolve these and many other homeworking issues. To find out more, download our free brochure.

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About the author

Mike Fitzsimmons

About the author

Mike Fitzsimmons

Mike is a Senior HR Consultant within the Moorepay Policy Team. He is responsible for the developing of employment documentation and is an Employment law advisor. With over 30 years of senior management and HR experience, Mike has managed teams of between 30 and 100 employees and is familiar with all the issues that employing people brings. He has also served as a non-executive director on the Boards of several social enterprises and undertook a five year tour of duty as Executive Chair of a £30+ million annual turnover Government agency.

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