
With remote work plan, Facebook dashes hopes of paycheck arbitrage - rdslw
https://mobile.reuters.com/article/idUSKBN22Y1IA
======
dang
Remote work threads have been the biggest cliché of HN since the pandemic (and
were one of the bigger ones already), and arguing about location-based
salaries has been the biggest cliché of remote-work threads lately. So
normally this follow-up post would get a moderation downweight
([https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...](https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20follow-
up&sort=byDate&type=comment)). But I'm lessening the downweight because it
seems to me this bit may count as SNI (Significant New Information):

 _Employees who attempt to wiggle around those compensation adjustments will
be subject to “severe ramifications,” [Zuckerberg] said, as the company needs
to account for employee locations to avoid violating tax laws. Zuckerberg said
Facebook will monitor adherence by checking where employees access its VPN.
Facebook also uses its own apps ' to track employee locations, according to
CNBC [...]_

(See
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20%22significant%20new%20information%22&sort=byDate&type=comment)
about SNI.)

------
lootsauce
This is a very subjective thought experiment and I'm sure you could make all
kinds of arguments against it but here goes...

Imagine person A lives in an area with a high cost of living and gets full
salary. Person A is able to purchase a house at a high valuation relative to
the national average. Person B in a rural area is able to buy perhaps as nice
a house on a smaller salary in a below average market.

Now look at the options available to these two people when they want to move.
Person A sells at market rate or perhaps a little below and can move to a
lower cost of living with a relatively large pile of cash. Person B has no
such option. The real estate market arbitrage is available to person A and not
to person B.

The salary of person A looks like it produces options and upward mobility. The
salary for person B seems to have more limitations.

~~~
opportune
Yep. With these "cost of living adjustments" it's almost always a better move
long term to live in the higher COL area, especially if you are living
inexpensively and saving the vast majority of your money. I save more per year
than I would gross working as an engineer near my hometown...

Although I will say, person B in your scenario has potentially more upside on
their housing equity, and they do potentially get a higher standard of living
short term. Of course, there are aspects of standard of living such as public
transportation, good public schools, people in your area you'd like to date/be
friends with that person B may not be able to buy.

~~~
cortesoft
Yeah, plus CoL differences don't affect ALL things you spend your money on;
amazon sells stuff for the same price no matter where you live.

~~~
jsjohnst
I’ve done the budget calculations based on my own personal spending and found
that outside rent, the majority of what I spend money on costs essentially the
same no matter where I live (if you normalize out taxes).

~~~
lotsofpulp
In the US, state and local taxes can cause a huge variance. Certain states are
in debt for multiple tens of thousands of dollars per taxpayer more than other
states, and those taxpayers will have to pay far more for debt service.

~~~
disgruntledphd2
This whole FB thing is actually more nuanced than people talk about:

1) It's only for senior engineers

2) US only right now.

Essentially, this is a play to increase senior retention. California is pretty
much unaffordable for most people who weren't pre-IPO or very good at saving.

Therefore, the trend is for more senior people to leave, and move to cheaper
places. By allowing remote for seniors, FB have a good shot at keeping people
for longer, which is _incredibly_ important for large engineering driven tech-
co's as the churn in tools/frameworks/approaches is really high, and keeping
people who remember Tool version -2 is super high leverage when they come to
consider tool version + 1.

~~~
humanrebar
I've always assumed these companies _liked_ the senior rotation in order to
keep seniority (and wages) lower. It also likely has the effect of keeping
average _age_ lower, which would make for an interesting disparate impact
lawsuit.

------
mtviewdave
Here's a thought experiment. Let's say an employer is based out of downtown
San Jose, and employs people on-site. Would it be reasonable for them to
adjust salaries depending on what city an employee lived in? The average rent
for a one-bedroom apartment is $3,291 in Mountain View, but $2,390 in Morgan
Hill. If an employee moved from Mountain View to Morgan Hill, would the
employer be justified in reducing the salary of the employee to adjust for the
fact that the (on-site!) employee now lives in a lower cost-of-living area?
(Let's assume that other CoL factors are not more expensive in Morgan Hill
than Mountain View, which I feel is a safe assumption).

Would it be justified if the company was fully remote?

What about if the employee moved to Sunnyvale? The average rent is $3,016; a
smaller difference, but still cheaper than Mountain View.

~~~
yongjik
I'm not sure that the example is similar to the current topic: rent is cheaper
than Morgan Hill largely _because_ it takes an hour to drive to lots of
workplaces. People are choosing between paying higher rent in Mountain View
and paying with their commute time in Morgan Hill.

It's arguably a different scenario from someone attending VC from their $400K,
5-bedroom mansion in Raleigh, NC.

~~~
IggleSniggle
But that's also sort of the point, isn't it? When you are dealing with a
remote worker, the commute time doesn't matter. You don't need to consider
paying geographical based salaries, because the location isn't relevant. There
is no "paying with commute time."

You just need to pay the amount that enables you to get the workers you need.
The "fair" thing to do is to pay people without regard to location and let
them decide for themselves whether it is worth it to live in a HCOL area or
not.

~~~
yongjik
Well, in an ideal, completely efficient market for remote workers, of course
the "fair" thing to do is to pay for enough salary to hire the best people in
Prague or Bangalore. People can decide whether they want to live in San
Francisco with that salary. Most people can't, so naturally there will be a
diaspora spreading out to low-cost areas, and rent in SF will drop until the
area can be "competitive" again.

But this dry description involves a ton of economic/social upheaval, which we
(the society) really wouldn't like to deal with, especially right now. (Not to
mention a "completely fair market" is an illusion: you can't just fire your
entire team on the bay area and hire replacements from Bangalore.) So a
compromise is reached, where companies try to keep people they have now at
roughly the same price they're paying now, with ugly, stop-gap measures to
dissuade people from getting ahead of the equation.

I'm not saying we should _thank_ Facebook - it's behaving completely in its
own interest - but people who complain that this isn't "fair" might want to
answer what's their position on the logical conclusion of a "fair market" for
remote workers.

~~~
IggleSniggle
You've given voice to exactly what I intended in my comment, but didn't quite
have the words to say. Thanks

------
rayiner
The lawsuits around this are going to be amazing. African American developer
has kids and moves to Georgia to be near family; receives steep pay cut
compared to white developers who move to Connecticut to do the same.

And how does Facebook decide what the cost of living in your area is, anyway?
The more data-driven Facebook makes that calculation, the more delicious the
law suit gets. For example, DC is a fairly high cost of living Metro area, but
there are some nice suburbs in PG County 30-45 minutes east of the city that
are quite affordable. They’re also predominantly African American. Does
Facebook set your salary based on living in the DC metro area, or do they
drill down further and cut your pay for living in PG County? I can’t wait to
see what happens.

~~~
lykr0n
> The lawsuits around this are going to be amazing.

No. They won't. This isn't anything new. GitLab as a company does this. My
company does this. US Federal Government does this. It's not controversial. HN
is the one making it controversial. YOU are making it controversial by
bringing race into it.

If you have clear salary bands ("SWE III makes base 100k to 150k") and clear
location bands ("NYC is 35%, Westchester County is 29%, Monroe County is 8%)
then it's completely fair.

> And how does Facebook decide what the cost of living in your area is,
> anyway?

You could use the same scales the US Federal Government releases. You could
base it on the average cost of living. Lots of data-points. Every state and
local government collects this data for various reasons. Hell, Walmart and
other large Grocery Stores most likely do this as well to localize prices
properly.

~~~
tomrod
Never heard of a company punitively adjusting COL downward without being
explicitly in contract, like with US Fedgov. Finance had people leave NY all
the time for Midwestern and Southern states with the same company keeping
their NYC paychecks.

~~~
TomVDB
I've not only heard it, I've been told.

"If you relocate from our San Jose office to our Austin office, there will be
a compensation adjustment due to COL and prevailing market rate."

I don't think that's unreasonable.

I'm sure they make exceptions for those employees who they want to retain at
all cost.

~~~
humanrebar
The employer deciding what "the market" is to set "market rate" to a
conveniently lower number isn't reasonable. If you're hiring remote-first,
you're not competing in a local market.

~~~
throwaway4715
The employer deciding what they're willing to pay employees is eminently
reasonable. Most of these companies are NOT going remote first, they're just
_allowing_ remote work.

~~~
humanrebar
No, a dialog or a negotiation is reasonable. Deciding things for both parties
is not reasonable.

------
tasty_freeze
When I moved from SF bay area to Austin, my employer didn't lower my salary,
but for a few years my yearly increases were small compared to my performance
review until my pay grade was right for my pay grade and location combination.

This was a nice way to do it because my salary has always been monotonically
increasing, and I wasn't offended that my increases were small for a few years
because I knew why it was happening.

~~~
VonGuard
This right here is the way to deal with the problem. Lowering a salary should
only happen if someone is a fuckup or reduces the amount of work they have to
do. Doing it over time like this is super classy.

~~~
esrauch
I don't know, if the same job gets paid less in Austin then it's not really
fair for someone who transfers from SF to Austin to make more than someone who
was just in Austin all long. If someone moved from Austin to SF you'd just pay
them less than a new hire in SF?

At Google they just openly adjust your salary if you move between cities; move
from NYC to Atlanta and you'll take a bit hit, move back for the reciprocal
instant raise.

------
sschueller
Well a Swiss court just ruled that companies need to compensate (including
part of the rent) employees if they are home officed. [1]

Companies taking advantage of this and thinking they can save money should
think again.

[1]
[https://www.google.com/amp/s/www.nzz.ch/amp/schweiz/arbeitge...](https://www.google.com/amp/s/www.nzz.ch/amp/schweiz/arbeitgeber-
muessen-einen-teil-der-wohnungsmiete-uebernehmen-wenn-sie-ihre-mitarbeiter-
ins-home-office-schicken-ld.1557921)

~~~
temporalparts
Disclaimer: FB employee.

The company claimed that they don't see this necessarily as a cost-saving
measure because they plan on providing for home office equipment for permanent
remote workers, kind of like how employees going to the office have monitors
and keyboards provided for them.

~~~
ericd
That’s pretty funny. I have an amazing home office setup, and even all that
high-end kit cost a very small fraction of an FB engineer yearly salary. Are
they planning on burning the delta by throwing in high-end telepresence
hardware, or something?

~~~
temporalparts
I don't know if it's high end, but every FTE I know got a Portal.

~~~
amgreg
Pardon my ignorance, but what is a Portal?

~~~
detaro
A video-call device they make:
[https://portal.facebook.com/](https://portal.facebook.com/)

------
supportlocal4h
It is generally-expected behavior for an automaker to shift production to the
cheapest labor market. Well, maybe not the absolute cheapest. Cost of goods
transport, e.t.c. also factor in. But it doesn't surprise anyone for
manufacturers to open factories in locations that lower their costs. It's an
obvious thing to do.

So it has always baffled me that tech companies do the exact opposite. They
motivate the most skilled people to leave low-cost areas and move to the most
expensive. They pile them in higher and higher and keep driving their own
labor costs through the roof. And VCs exacerbate the problem by refusing to
fund anything in less expensive locations.

It's easy to dismiss this as irrational. But is it really? Are there benefits
to this that are so huge they outweigh the costs?

If you could pay $10,000,000 to move 1000 devs to Kingman, AZ, then cut their
avg salary from $250,000 to $150,000, why wouldn't you do that? What is the
downside to saving $90,000,000 after moving expenses in the first year alone?

The obvious first argument is reduction in the standard of living would cause
the talented to refuse. I'm sensitive to this, but also skeptical. People
making 150 in Kingman would improve their SOL.

I could be wrong, but I think there are more important factors. I think there
is too much money at stake for these employers to have not thought it through.
When a common behavior looks insanely irrational, it is more likely that you
haven't seen all the variables.

~~~
8ytecoder
Companies that require skilled labour don’t move to places with cheap labour.
They move to places with abundant skilled labour that’s available at a
reasonable cost. Or, they spend money training and equipping the available
labour. There’s no way around it.

~~~
rodgerd
If you think building cars is unskilled labour I can only assume you've not
owned anything newer than a Leyland P76, and managed to miss the whole
"Japanese car makers eating the US and British industries" thing.

~~~
renewiltord
Auto workers have a skilled tradesman classification and other classifications
and most aren't skilled tradesmen. They still perform pretty complex tasks.
It's just a term, like how in insurance contracts you'll read "Act of God".
That doesn't mean that State Farm is a theistic organization that believes
that supernatural beings are imposing earthquakes upon us.

------
Tade0
Coming from a country(Poland) that may well be treated as one large
outsourcing company (with the notable exception of CDPR and its whopping 1200
employees) here's my prediction on how this is going to play out:

Salaries of remote employees will initially be made much lower according to
some woefully inaccurate estimate of cost of living, but from that point on
they will increase at a considerably faster rate than normal.

Within a decade they will stabilise at a visibly lower than SV, yet still high
level representing the true difference in cost of living - or actually - "cost
of deciding not to live in SV".

Eastern Europe experienced an amazing advance in IT compensations when the
west figured out that the software engineers there are no worse than their
local counterparts.

In the case of SV's surroundings it's obvious that the engineers are talented,
so I believe this process should be starting just now.

Overall it's not that bad, because with time any incentive to move back to the
high cost of living area fades.

You won't be driving Teslas to work(chiefly because you won't be driving), but
you'll enjoy a standard of living higher than a person employed in a local
company, and that is nothing to sneer at.

~~~
timwaagh
SV people are used to being able to afford a model S. Going to european level
salaries (not being able to afford even a model 3) is going to be somewhat of
a shock.

------
VonGuard
This makes sense in the hiring process, but once you've hired someone, it's a
super dick move to lower their salary in spite of their performance. Seems
like the sort of decision a robot would make.

~~~
harryh
You pretty much have to do this if you want to maintain different salaries in
different geographic reasons. Otherwise people would be highly incentivized to
move to SF/NYC for 6 months to get hired then move back to their cheap COL
permanent location.

~~~
Exmoor
Honestly, people working out of the main office for their first 6mo-1y would
probably a really advantageous scenario for all involved. The first year is
when learning tools and culture as well as developing relationships is most
crucial. I would say someone moving from in-office to remote has a big
advantage over someone getting hired remote.

~~~
harryh
True. But is there that much of a difference between "working from home in
Palo Alto vs working from home in Boise"?

Probably not.

------
gruez
>Zuckerberg said Facebook will monitor adherence by checking where employees
access its VPN. Facebook also uses its own apps' to track employee locations,
according to CNBC

So all I need to do paycheck arbitrage is to use a VPN with private
residential IP (yes, that's a thing), and a rooted/jailbroken phone that does
location spoofing?

~~~
dmurray
It's Facebook. You already know they use hundreds of sources of information to
track and categorise people. Zuckerberg and CNBC just mentioned two.

That said, I expect you can fool Facebook for a while with high probability.
You might need to commit fraud and/or tax evasion to do so, so that raises the
bar.

~~~
Nextgrid
Question: can you even work at Facebook without having an account and using
it?

The biggest risk of leak would be during usage of their services like their
app and/or website on personal devices. If you can work there while _only_
using their issued work laptop it would be pretty easy to contain by sticking
it behind a VPN router.

~~~
sdan
I've heard FB has their own version of FB for work, which is mandatory to have

------
habosa
Where did Facebook say that "cost of living" will impact salaries? At Google
(where I work) salaries vary a lot based on location but cost of living is not
part of the equation. It's based on the cost of hiring in the market.

I'm personally in the middle of an SF to London transfer. I'm taking a 25% pay
cut. That is not because it's cheap to live in London (it's not) but rather
because it's very very cheap to hire developers there.

I imagine Facebook will do something similar.

~~~
throwlaplace
>That is not because it's cheap to live in London (it's not) but rather
because it's very very cheap to hire developers there.

lol those are exactly the same thing

~~~
tricolon
You misunderstand. While salaries are relatively low in London, the cost of
living (i.e. rent) is relatively high.

------
gojomo
California might consider making this sort of practice illegal, in the same
way they've prohibited requiring a salary history, or enforcing certain non-
compete agreements.

Why? It's salary discrimination based on a tangential factor that arguably has
no effect on the quality-of-work delivered.

To the extent an employer has the power to demand such a disclosure, it's
suggestive of market-concentration & a lack of competition, that prevents an
employee's skills, and skills alone, from determining their compensation.

(And, a possible added bonus for California would be that requiring big
employers to pay California salaries, even to non-California employees, might
deter those employers from seeking such California-tax-base-eroding
arrangements.)

~~~
BurningFrog
California has no say over what FB pays its employees in Ohio.

~~~
krzyk
I assume California also has some low COL places. From a quick look, SF vs
Modoc is quite a big difference.

~~~
DoreenMichele
Fresno has housing prices roughly "average" for the nation. It's one of the
lower cost cities in California.

"Average" for the nation isn't exactly cheap. There's no place with a
genuinely low cost of living anywhere in California that I can tell. Fresno
and Victorville are some of the less insanely expensive places and they both
more or less serve as retirement communities for the more expensive coastal
cities.

Fresno is routinely listed as having some of the worst air quality in the
nation. You rarely hear anything good about it. In the movie "Monsters vs
Aliens" it is more or less the butt of the joke as a place no one would wish
to live.

------
noizejoy
I find it quite counter-intuitive that there would be different salary levels
for remote employees depending on the location they live in, since for remote
employees the location is now presumably their choice, and not the employer's
- analogous to the personal choice of how expensive the employee's choice of
dwelling is.

As others have mentioned, anything else runs the danger of creating
potentially perverse incentives to move (fake or real) to a more expensive
location, thus adding cost to the employer. And when salary costs for some go
up, the argument could be made it lowers the pot of total salary money
available for the remaining employees, since many large employers are managed
to hit overall percentage targets for various cost items (like R&D which for
web companies typically has a considerable salary component).

The whole thing sure sounds like a classic large company policy with
unintended consequences. -- Running large companies is hard.

~~~
herval
Companies like Buffer do this too: [https://buffer.com/salary/content-
marketer-3/average/](https://buffer.com/salary/content-marketer-3/average/)

------
Smoosh
> Facebook also uses its own apps' to track employee locations

Not unexpected, but another reason not to work there.

------
Consultant32452
I've worked remotely for 10+ years and I have one piece of advice. Ignore
these policies. Live wherever you want and demand whatever salary you think
you're producing at. If FB wants to leave high productivity labor on the
table, let them. If any company has any kind of policy that stops them from
hiring you, that's their problem. We've been in a seller's market for software
development labor for nearly 20 years. Stop pretending like these arbitrary
rules are your problem, it's theirs. They can't limit you. They can only limit
themselves.

~~~
bevacqua
So much this. There's companies out there that value output at what you're
worth, regardless of where you live at. I'm almost certain that Facebook is
one of those companies — when it comes to high output employees. Negotiate.

~~~
RHSeeger
The counter to that is that there's people that live in cheaper areas that are
willing to accept less _because_ their cost of living is lower. If a company
can hire them instead of someone )with the same productivity) basing their
expected salary on what people make in SV, then why wouldn't they? Following
that logic, people living SV should start making less while people living in
inexpensive areas should start making more; it should even out to some extent.

~~~
JMTQp8lwXL
The people living in LCOL areas don't hustle. They aren't the type to do 100
hours of leetcode. That doesn't make them bad engineers. But it precludes them
from passing the incredibly one-dimensional assessment FANGs apply to
engineers.

The hiring committees would throw fits if they had to consider hiring even the
upper-end of talent in non-competitive markets.

These committees could be in for a reckoning if businesses realized they could
be just as effective with mid market talent, because truthfully, not every
problem that needs to be solved at a FANG needs a top 1% best-of-breed, (for
example) 15+years-of-GPU experience engineer. Not every problem demands niche,
hard-to-find specialty.

~~~
war1025
> The people living in LCOL areas don't hustle. They aren't the type to do 100
> hours of leetcode

I think this hits on a very real signal that is sent by someone being willing
to relocate cross-country for work. I know people from college that moved out
to the coasts to work for big name tech companies. They were probably "above
average", but none of them were terribly noteworthy.

The thing they were willing to do that the rest of us weren't was uproot from
the midwest and go to the coast.

That's a signal that you're willing to tie your self worth to your job in a
way that is very valuable (exploitable) to a company.

~~~
bitcoinmoney
Pretty much described every H1b-er in HN. Except prolly the body shop
employees.

------
adammunich
If your method of motivating people is "severe ramifications" maybe it's time
to chill for a while and go fishing.

~~~
shagie
Consider the "severe ramifications" that Facebook would be facing if they are
reporting income for a worker in California when the worker has decided to
move to Montana.

~~~
burnte
Imagine paying an employee in a manner that you don't have to worry about them
lying about where they are. Rather than judging how much to pay them based on
where they live, you just pay them and not worry if you can screw them over or
not.

~~~
righteous
Cool. Lets change the laws to make that legal.

~~~
randallsquared
...to make it legal to pay someone on the value they bring, rather than where
they live? Pretty sure there no obvious laws against that. ETA: as long as the
value is high enough, at least.

Probably you meant "to not have to know where they live", but that wasn't what
the GP's post was saying.

------
ChuckMcM
I understand this, although I disagree with the notion that a job is worth
"more" in a high rent area than it is in a low rent area. But that is a
different thread.

That said, when my kids were in school there was a phenomena that "Cupertino
Schools are the best public schools" so parents wanted their kids to go to
those schools. Which you could do if you lived in Cupertino, but Cupertino has
higher costs than say living in South San Jose. So creative parents would make
their "home" one of the apartments run by a "friendly" landlord who would
"rent" them an apartment for $100/month, and give them a utility bill with
their name on it so that the student could claim Cupertino residency and go to
Cupertino schools. Other scams involved people offering to pay the utilities
for someone who lived in Cupertino so that they could get that precious
document which saved them $8,000 a year or more on private school tuition.

Depending on the difference in salary, I would not be surprised to see some of
that action going on with regards to people's "Facebook home"

~~~
harryh
Worth pointing out that if you lie to your employer and get caught probably
the worst that can happen is you get fired.

But if you like to the government and get caught you can go to jail.

~~~
ransom1538
"You are charged trying to get your kid into a good school through mail fraud"

Eh. Hard pitch for a DA to run with this case. I don't honestly see a poor
family being prosecuted for trying to get their kid into a rich school due to
their property line. The DA office wouldn't like these optics. Jury?? Not a
chance. If it were rich kids taking advantage of a poor school - the DA would
run with it.

~~~
harryh
That DA got elected by rich parents who paid high prices for their houses to
get in a good school district. Do you think they want their school "ruined" by
poor kids sneaking in illegally?

------
daenz
Here in Washington, a Seattle salary of $150k is worth around $315k in
Spokane. And that's in the same state.

[https://www.bestplaces.net/cost-of-living/spokane-
wa/seattle...](https://www.bestplaces.net/cost-of-living/spokane-wa/seattle-
wa/150000)

~~~
AmericanChopper
The cost of living scaling doesn’t cover the entire salary. Only about 30% of
my salary goes towards cost of living, more than half of it goes to savings.
If my salary was scaled from Seattle to Spokane levels, my savings at
retirement would be enormously impacted.

That sort of cost of living also doesn’t account for a huge amount of other
things too. Having a holiday in Bali costs the same whether you depart from
Spokane or Seattle (probably slightly more departing from Spokane actually,
when you account for transport from Spokane to SeaTac). Buying a new 4K big
screen costs the same in Spokane as it does in Seattle. Living in Spokane
doesn’t make your kids college cost less either.

~~~
scarmig
> Living in Spokane doesn’t make your kids college cost less either.

It would depend on how much of a pay cut you experience moving to Spokane, but
that can certainly make colleges with extensive need-based aid cheaper.

~~~
nrmitchi
When you're talking at the levels that most engineering positions are paid
pretty much anywhere in the US (even lower cost of living areas), you are
unlikely to qualify for need-based aid anyways. A pay cut from (lets say) 200
-> 150 is significant, but I don't believe likely to qualify a student as "low
income" by any means.

~~~
scarmig
Stanford covers all tuition for parents whose income is $125k or less, and
partial tuition for parents making more than that until some cutoff.
Regardless, $150k would be getting you a decent bit of financial aid.

~~~
AmericanChopper
I don’t think “your pay cut might be big enough to qualify you for financial
aid” is a typical part of the WFH sale pitch, in any case.

------
B-Con
> The biggest loser, he predicted, would be California.

California had been downtown hostile to the tech industry and grown complacent
work the status quo because the tech workers had to be there. If tech workers
don't have to be there, they will start trickling out.

CA worked hard to make the bed they're about to lie in.

~~~
jdhn
Eh, I've heard people predicting the end of tech in California for YEARS.
Hasn't panned out, and I don't see it changing anytime soon. Kind of reminds
me of the people who say that China's economy is a house of cards and is going
to implode any day now. They've been saying it for decades and nothing has
happened.

~~~
B-Con
CA won't implode soon. But momentum is hard to change and right now the
industry is _looking_ for a ways to not be in CA. It hasn't panned out yet,
but once they are unlocked and can leave the region there will be a river of
people leaving. Let that run for a decade and then there will be trouble.

 _If_ (and that's a big if) the current trend allows CA workers to work
remotely from non-CA, I think SV will be a very different place in 15 years. A
place not on the trajectory of the last 15.

------
BrandiATMuhkuh
GitLab seem to be very open about that. They have a salary calculator that
includes the location. [https://about.gitlab.com/handbook/total-
rewards/compensation...](https://about.gitlab.com/handbook/total-
rewards/compensation/compensation-calculator/calculator/)

~~~
TeMPOraL
Wonder how that pays off for them in terms of hiring. Last time I was looking
for a job, I put them near the bottom of my list because of the location-based
scaling.

~~~
guitarsteve
Same here. It’s interesting that they won’t know who never bothered to apply.
A more typical company which doesn’t make their salaries public would notice
if candidates repeatedly drop out of the hiring pipeline due to inadequate
pay.

On the other hand they seem to be doing well as a business so recruiting
evidently hasn’t been a big problem for them.

------
eanzenberg
Piggybacking. This should be no surprise. When your job becomes remote, you
now compete with people willing to earn half or less because they choose not
to live where you do. Basic econ. Don’t be entitled, it’s no surprise most of
the country hates tech workers.

~~~
aantix
>Don’t be entitled

Because you want to maximize your earnings based on the value you bring? LOL..

~~~
scarface74
You don’t get paid based on the value you bring. You get paid based on supply
and demand. Once they can hire from anywhere in the US, the supply increases.

~~~
aantix
The supply does increase.

But the time to properly screen senior engineers remains finite.

Who are the people that can properly vet senior-level talent? A few other
senior-level engineers that are on the team?

So you want them to ask questions that are beyond the superficial, phone
screen 50 candidates, all the while they're supposed to continue to do product
development, fix bugs, comments on PR? Something will suffer - either the
hiring process or product development.

For every potential hiree that rejects an offer, an engineer that gets into
the late stages of the interview process only to be hired away by a better
offer is time wasted by your engineering team.

Engineers in the late stages of hiring have the upper hand. Repeat it to your
self. "I have the leverage."

With an offer on the table, push back and counter offer. They don't want you
to walk away.

Living in Des Moines and they already have a senior team in SF? Awesome. Ask
for the SF salary or walk. They'll counter. And if they don't? You can salvage
the deal by approach them in two days with another counter. In two days, they
have _not_ lined up another qualified senior engineer.

They've already burned so many resources. The company knows this. Now you do
too.

~~~
scarface74
We are living in a post-Covid world. All of the money losing companies are
laying off people leaving the FAANGMs that have a real business model and
making money the only companies hiring at inflated salaries. Now you have both
increased supply because they are expanding outside of the west coast and more
“smart people” (tm) who spent years at the leetCode alter looking for jobs.
You also have reduced demand with VCs not willing to throw good money after
bad anymore.

------
rkochman
I’m waiting for this to be framed as a racial equity issue. Are they really
going to pay people in Detroit and Atlanta less than people in San Francisco
and Seattle for the same job in the same “virtual” location?

~~~
habosa
If they make more working for Facebook in Detroit than for a a Detroit-local
tech company, and they will, it's hard to say who's harmed here.

Of course there's gray area here but I think it will be fine. They won't be
the first company with localized salaries.

------
christiansakai
I can smell the next SaaS offering: pobox.me, rent a po box and real address
and take your salary to the next level!

~~~
memset
This is essentially what Delaware C-Corps do in order to avail themselves of
regional regulations.

~~~
vidanay
This is a excellent point. What state is FB incorporated in?

~~~
egypturnash
Looks like... Delaware! [https://www.delawareinc.com/blog/facebook-is-a-
delaware-corp...](https://www.delawareinc.com/blog/facebook-is-a-delaware-
corporation/)

------
nugget
If a developer is 100% wfh and productive, who cares where they live? FB's
stance would seem to alienate the technical talent that they spend a fortune
to recruit, train, and keep motivated. Not to mention make anyone who wants to
move an easy target for competitors to poach.

Edit: Of course the IRS should care, and employers should want to accurately
report domicile. His statement came across as the company being more worried
about the exploitation of a corporate compensation loophole than adherence
with tax law. Maybe they saw so much initial interest in relocating that they
felt they had to pour some cold water on it.

~~~
frakkingcylons
The IRS cares where you’re working. Facebook (or any employer) has to report
it accurately.

~~~
jupp0r
Do they have to adjust salaries too or is that just saving money on
compensation?

~~~
jkaplowitz
No government authority requires salaries to vary based on location.

~~~
nojito
Federal salaries have cost of living adjustments.

~~~
jkaplowitz
Absolutely, but that's them acting as an employer rather than as a regulation
of other employer's choices.

------
taurath
What a great way to make people rush to the cheapest and least convenient
parts of the highest income areas, further displacing poor people.

~~~
PunchTornado
I don't think high income individuals will try to save a few $ and live in a
high crime neighborhood with no hipster 10$ coffee in sight.

~~~
proverbialbunny
High crime? I live in suburb 2 blocks from a forested area with trails in a
nice area and I'm paying $700 a month in the SF/Bay Area.

The crime in the area I'm in is lower than most of the bay area because the
area gets overlooked.

The downside is there are less high end food options, but still some pretty
good options. Oh, and the allergies. I get allergies. Too much nature. But
it's nice.

~~~
MiroF
> I'm paying $700 a month in the SF/Bay Area.

What?? How far out are you considering the Bay Area? Is that for a room or a
place to yourself?

~~~
proverbialbunny
East Bay. West side of the mountains inbwtween 880 and 680.

------
Joof
I live in a van. Does that mean I'm working around compensation adjustments?

~~~
souterrain
What state(s _)|countr(y|ies)_ do you report as your location for tax
purposes?

Working for a New York State-based employer is interesting in this regard. NY
demands income tax when telework is not for the benefit of the employer.
Depending on where you are working and what the tax laws are, you may be
paying two states income tax.

[https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf](https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf)
(PDF)

~~~
a3n
> I live in a van.

>> What state(s)|countr(y|ies) do you report as your location for tax
purposes?

I live in my employer's semi truck. I report my "home terminal" as my tax
paying state, using my son's apartment in that state as a mailing address. I
pay taxes in that state.

Other truckers maintain an actual physical residence of their own. But there
are many like me. It's sort of like living in an RV, wrt taxes.

------
webkike
I’m currently living rent free at my parents place in Palo Alto. Can you
imagine how much more Facebook would pay me than someone renting in a poorer
neighborhood?

~~~
taurath
This is an extremely important point. Everyone will rush to the cheapest part
of the most expensive areas.

~~~
sershe
How is East Palo Alto doing? Serious question, when I was still in SFBA I
think the houses there were 2 times cheaper than across the highway and the
joke was the weather forecast goes "Palo Alto sunny, East Palo Alto sunny,
stray bullets". I was wondering if I should buy a rental house then (~2013)...

~~~
taurath
East Palo Alto is minimum $1mm homes now. Unaffordable to anyone not in tech.

------
toadi
I have have worked as freelance contractor for most of my career. In my
country 80% of decent IT people do this. We can demand higher income because
our contracts only last 3 months so it's easy to lay us off when we are not
needed (we have strong labor laws and employees are costly even on top of
their salary). Due to this we can demand more salary too. My price goes up for
short term prospect contracts, long distance of travel, I'm not particular
interested in the project, ... In good times that works great but you better
save some of that money for bad times.

I have build a good reputations so employers were ok with me working remote.
So I could discount a bit as I didn't have to do long distance travel and
because it was better for me. I also took the time to move to a lower cost of
living country. Was nice, but the timezone was not that interesting.

Currently I don't work for my home country anymore. I work locally, apparently
they pay well for my expertise here. Still I could edge out a few percentages
more in my home country. But with the lower cost of living I still have more
money in the bank at the end of the month.

If you can't do som form of paycheck arbitrage why would you move? Doesn't
mean you need to have same salaries like you had before, you can take a small
haircut. But just making the same as people locally? In my case that would be
the salary I had when I just came out of school 23 years ago.

------
jrs235
SV companies are evaluating their employee's BATNA. And if more tech companies
are going this route, everyone's BATNA is decreasing. They don't want to
overpay an "employee's market". It isn't just about the value an employee
brings to the company when working in SV or the middle of Nebraska. It's
turning into a buyer's market for tech jobs.

Many people would be/will be/are pissed when a company eliminates remote
positions and suddenly require employees to report to an office.

~~~
Aeolun
Possibly, but I suspect the pain would be less if they suddenly started making
200% more money.

------
bengale
Seems like a weird take on what a salary is to me. I don't know if this is an
American thing, and linked to the way your benefits work, like health cover.
But I don't see my employer as having any reason to know where I'm located
(beyond timezone issues for working hours), or what lifestyle I support with
the money they pay me. My salary is based on what price the market will bare
for the services I provide, what I do with that money isn't really any of
their business.

~~~
smm2000
Employers definitely need to know where you live to pay myriad of payroll
taxes. if you lie, you commit tax fraud. It’s true virtually anywhere in the
world - including all countries in Europe, not just US thing. You can often
skirt law if you are small enough though - nobody cares about random web
designer on upwork.

~~~
luckylion
That has nothing to do with the salary-question though. You could separate
that completely (and many do via contractors: nobody asks a contractor where
they live to set a price for their work): have one party in the company
negotiate the salary, and have another deal with employee locations as
required by law. Those two don't _need_ to have any contact.

~~~
humanrebar
So the taxes and accounting expenses show up on your salary statement as a
negative line item?

~~~
luckylion
Taxes would be one of the legal requirements, yes. They are required and have
a valid interest (as in "who are you, and how can we reach you?") to know
where you live. "So we can figure out how much we need to pay you" is not a
valid interest in my view. You're not getting paid to live in a certain area,
you're getting paid to provide X hours of your time each week.

------
vegetablepotpie
If the scaling is proportional to cost of living I don’t think much would
change. Why would an employee move away from a large city with amenities,
culture, and the career advancement opportunities that come from being in an
office for a drop in salary? The only advantage I can see to moving is if
you’re starting a family and you don’t want to live in the city.

Facebook is basically telling its employees that they want them to come into
the office.

~~~
falcolas
Given that the difference between cost of living between the most and least
expensive places in the US is in the $40,000 range, and salary drops are
occasionally upwards of double that, no, the scaling is not proportional.

For example, I live in Montana. Most COL adjustments say that I'd need about
$40,000 more a year to maintain my current standard of living, yet equivalent
positions get about $100k to $150k more a year. If one of those poor folks in
SF making $250k a year now wants to move to Montana, they can easily expect to
be making $150k or less after they move.

------
motohagiography
Paying a salary based on someone's location is utter horseshit, unless they
are an unskilled replaceable commodity. So at facebook, which is it?

It's as though people think that they are paid out of some kind of sense of
paternalistic fairness. It's leverage, and if a recruiter can tell you "well
the cost of living in your area is %30 lower, therefore your work is %30 less
valuable" and you believe them, then sure, you are worth %30 less. If an HR
person says, "our policy is we pay less in the area you live," you can respond
with, "that's really interesting, my policy is GFY, because I work where I
deliver value."

Employers do not pay for your time, they pay you for theirs, to shorten the
period between their investment and the maximum yield it can return to them.

Facebook is no longer mainly solving growth problems, it is solving
sustainability and optimization problems, and if you want do do that, you
might as well go work at a bank. They haven't dashed the hope of paycheck
arbitrage, they have just made a huge public commitment to inferior talent,
and they deserve what they get.

~~~
MauranKilom
> unskilled replaceable commodity

That's a weird way to look at "we pay you X because you'd work for someone
else otherwise". There's a middle ground between that and "we pay you X
because you create Y value for us".

Or in other words, if they have more people to choose from for a position (due
to location being less of a limiting factor), they will be able to find
someone accepting a lower wage. This is deeply unsurprising to me and has
nothing to do with how skilled the labor is.

~~~
motohagiography
To frame it as companies paying people mainly as a way to impose opportunity
cost on their competitors doesn't reflect the comment, normal economics, or
growth. While remote work will flatten the market, it will flatten both sides
of the market (employers v. staff).

When you invest in a business, you pay people to manage it and deliver a
yield. If you invest in a business to prevent another business from
succeeding, that doesn't make any sense unless you are a government or state
captured industry.

If your skills and potential value is undifferentiated, sure, someone could
undercut you, but if you have something of value to offer, price is much less
of a deciding factor.

------
baxtr
This will accrue many negative comments here. I have to say that I can
understand the reasoning behind this. I think it’s fair. I would expect that
they increase the salary if you move to a more expensive place.

~~~
losteric
Does the value you create for the company depend on location?

I don't think it's fair for businesses to extract more profit from me because
I live in a cheaper area than my coworkers

~~~
erik_seaberg
Facebook is paying what it takes not to be outbid on hiring you. Currently
that depends on supply and demand for the labor market you're in.

If everyone paid for value, Intel and AMD would be getting almost all of my
salary.

~~~
vkou
People working remotely from Palo Alto are in the same labour pool as people
working remotely from Eugene, Oregon... And the wierdo who lives in a goat
farm in the middle of nowhere, Idaho.

The labour pool argument only makes sense if you commute into the office.

With remote work, everyone in the same country + timezone belongs to the same
labour pool.

Companies that will treat the remote labour pool as uniform will trivially be
able to outbid companies that underpay people in low COL areas, and overpay
people in high COL areas. Why would I work for Gitlab, with its 0.66 COL
multiplier for my town, and a 1.2 COL multiplier for NYC, when I could work
for Foolab, which has an across-the-board 0.8 COL multiplier?

Given that situation, you'll quickly find that the only people working for
Gitlab are people based in high COL areas. Instead of a money-saving
technique, it becomes a money-spending technique, as they end up subsidizing
employees relocating to the highest-COL areas.

~~~
sytse
At GitLab our rates are not based on COL but a market rate
[https://about.gitlab.com/handbook/total-
rewards/compensation...](https://about.gitlab.com/handbook/total-
rewards/compensation/#competitive-rate)

So as people are able to earn more in remote locations our rates will go up
with them.

I think most companies will end up paying local rates
[https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-
ra...](https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-rates/) so as
more companies start hiring remotely the rates will go up gradually. I don't
think think that there will be many Foolabs that pay one rate.

~~~
vkou
Market rate is, in reality, a close enough proxy for COL. I'm happy to use the
two concepts interchangeably. My point still stands.

Any firm that will provide an equal across-the-board wage, that's
significantly below market rate in NYC/Bay Area, but significantly above
market rate in low COL areas will eat your lunch, in terms of wage
competitiveness among the latter group. They won't hire anyone from the former
group - but just being in the bay area does not make you a better engineer.

You'll be stuck paying expensive people in high COL areas, that are doing the
same work as cheap people in lower COL areas.

~~~
sytse
Sorry, I made a mistake. I edited my comment to add "don't" to "I don't think
think that there will be many Foolabs that pay one rate."

~~~
vkou
Why wouldn't there be, as more work goes remote?

Why compete on the high-billing end of the salary curve, when you can compete
on the low-billing end of the salary curve, for the _exact same quality of
talent_?

"We won't pay NYC wages, but we will pay the rest of you better wages than our
competitors" is a great pitch to employees[1]... While being a net benefit to
your payroll.

[1] Except for those living in NYC, of course. But you don't have to hire
them.

~~~
sytse
That would restrict all your hiring to the lowest wage markets.

For some considerations also see [https://about.gitlab.com/handbook/total-
rewards/compensation...](https://about.gitlab.com/handbook/total-
rewards/compensation/#why-we-pay-local-rates)

~~~
vkou
> That would restrict all your hiring to the lowest wage markets.

The talent quality is the same.

Some of those reasons in the link are directly contradictory, some are
nonsense, and others are inapplicable to other firms (But sure, they may well
make sense for Gitlab.)

> A concentration of team members in low-wage regions, since it is a better
> deal for them, while we want a geographically diverse team.

May be a priority for Gitlab, but that is not a priority for any firms that
required people to relocate their butts to Silicon Valley, or that never
supported remote work prior to Covid.

> Team members in high-wage regions having less discretionary income than ones
> in low-wage countries with the same role.

Seriously? Do team members with more obligations, like children enrolled in
private schools, ailing parents, or overleveraged mortgages also get the same
amount of discretionary spending as their less-burdened coworkers? Isn't
choosing which zip code to live in discretionary? And why does this even enter
the picture, when, as you claim, your wages are set by _market_ , rather than
by COL? The market doesn't care about employee discretionary income. There's
nothing _fair_ about market wages, just like there's nothing fair about the
weather. They just are.

> Team members in low-wage regions being in golden handcuffs and sticking
> around because of the compensation even when they are unhappy.

This is an incredibly employee-hostile reason. "We don't want to pay you too
much, because imagine if you ever become unhappy." Good lord.

> If we start paying everyone the highest wage our compensation costs would
> increase greatly, we can hire fewer people, and we would get less results.

This, however, is a fantastic reason. See my previous post on why it makes
sense for a remote firm to not pay _anyone_ NYC wages.

> If we start paying everyone the lowest wage we would not be able to attract
> and retain people in high-wage regions.

Why is this a goal of the firm? Scratch that - if that's a goal of the firm,
that's fine. It's a weird goal, though. Companies typically don't go into
business with the goal of attracting and retaining people in high-wage
regions. They typically go into business to make a lot of money by solving
problems for their customers. So, it's fine that this is a goal for Gitlab,
but it certainly does not seem to be a goal of any company I've ever worked
for, or am likely to work for.

You adjust wages up for employees hired in, say, non-NYC, who choose to move
to NYC. How would doing so meet that goal? Is someone from Oklohoma who moved
to NYC for a raise suddenly providing a diversity-of-skills-and-perspectives
need that was unmet, prior to their geographic relocation? Are they now
providing more value, that necessitates paying them more? If not, why was
hiring in high-wage areas a goal in the first place?

~~~
erik_seaberg
> The talent quality is the same.

Before I relocated to the Bay Area, I had never gone on call. Never diagnosed
a system by only looking at graphs of metrics it emitted. Never ran
experiments against tiny percentages of production traffic. Never had to
maintain consistency while failing over between regional datacenters. Being
here did make me a stronger engineer, because companies here are earlier
adopters with tougher problems, and the scale to make solving those problems
worthwhile, and people who have been studying them. Maybe someday these
experiences will be evenly distributed among remote workers everywhere, but
right now they're concentrated in the strongest labor markets.

------
ralmidani
While tying paychecks to cost of living may appear to be equitable at a
surface level, in reality you end up rewarding some workers who insist on
living in an expensive area and, in a sense, force those who are willing to
live in less expensive areas to subsidize their colleagues’ expensive
lifestyles.

~~~
Spivak
True but there’s a balancing dynamic in play.

Living in a high CoL area is an advantage to you because you win when paying
fixed expenses and world rates.

Living in a low CoL area gives you an advantage because you will cost the
company less and are more likely to get the job.

Big brain play is to find a company that has a policy like this and move up in
the world.

------
rkochman
Zuck can do whatever he thinks is “fair” but ultimately he has to deal with
the realities of the labor market, which will change if remote works really
catches on.

~~~
25mph
I'm sure Zuck doesn't know the concept of fairness and would laugh if someone
would explain it to him. Words that Zuck understands are "efficient",
"justifiable", "profitable".

------
d_burfoot
> company needs to account for employee locations to avoid violating tax laws

Serious question: can some tax-savvy individual explain what the relevant tax
laws are? How much could a worker's tax residence affect the corporation's tax
liability?

~~~
ProjectArcturis
If you live most of your days in Missouri, you are a Missouri resident and you
need to pay Missouri state income taxes, and maybe local income taxes as well.
If you/your company is paying California income tax instead, that's a problem
for both of you.

~~~
ArtDev
And, if you live in a country that does not tax resident foreigners whose
entire income is foreign, you pay no income tax at all. The only countries I
know that do this cheaply are Costa Rica and Uruguay (the Bahamas have
expensive requirements).

One technique is to not live anywhere more than six months but be a residency
in one of those countries.

I haven't done this because I have kids and pets.. but it seems pretty awesome
if you make a competitive salary (not Facebook!).

------
megaframe
> ...salaries will be adjusted to reflect the local cost of living.

So if the employee where to move to say Hong Kong where cost of living is
higher will they also in turn increase wages? I think not.

If they keep a local address in some random apartment they never stay at but
live elsewhere how would one check on that?

If you're willing to pay California taxes but live elsewhere I find it hard to
see how they'd plan to enforce this. You could always argue you were
temporarily traveling hence the local address you intended to return to and
pay taxes at. Friends of mine do this, returning to the US every 6 months or
so.

~~~
revicon
I read somewhere that they were talking about using the Facebook app itself to
track remote employees whereabouts. Having trouble finding the reference right
now though.

~~~
ngngngng
Employees who attempt to wiggle around those compensation adjustments will be
subject to “severe ramifications,” [Zuckerberg] said, as the company needs to
account for employee locations to avoid violating tax laws. Zuckerberg said
Facebook will monitor adherence by checking where employees access its VPN.
Facebook also uses its own apps' to track employee locations, according to
CNBC [...]

(See
[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu..).
about SNI.)

------
adrr
Is it required by law so the employer pays the appropriate payroll tax and
abides by local labor laws?

~~~
alistairSH
Yes, the location tracking (wether that be simply asking, or IP checks, etc)
is mostly for regulatory compliance.

Salaries adjusted by region is pretty common. My employer does it. My wife's
employer does it. Etc.

------
empath75
If we’re moving to a remote first world, long term it will flatten out
salaries regardless of location, but short term, companies will stop hiring in
expensive locations as much.

------
paganel
> Facebook also uses its own apps' to track employee locations, according to
> CNBC here one time using the data to find interns who failed to show up for
> work.

Is this legal?

~~~
Slartie
> Facebook also uses its own apps' to track employee locations

Is this irony?

------
thrill
Cost of living adjustments should only be allowed to be applied if the
location is directed by the company.

------
daenz
Are we going to see a exodus of high-income newly-remote workers to lower-
income locations? This seems devastating to cities that have become dependent
on the economic power these workers bring, but at the same time, it could
bring new life to poorer areas of the country.

~~~
taurath
Nah it just means more gentrification in rich areas.

------
KoftaBob
There's another half of this phenomenon that seems to get ignored. Yes,
allowing remote work greatly increases a company's supply of potential
employees.

However, if more and more companies offer remote work as an option, that means
employees now have a greatly increased supply of companies competing for them
as well.

The software engineer living in Ohio who doesn't have the option/ability to
move to a tech hub like SF or NYC would've typically had to make due with the
small pool of positions available to them locally, meaning less leverage for
salary.

If more companies allow remote however, they can now work at any of those, and
the local companies will suddenly be forced to compete for talent.

------
stared
Does it work both ways? If so, here is a cheat sheet:
[https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(nominal\)_per_capita)

Enjoy!

------
nmstoker
I'm pretty sure this would be illegal in the UK, the job pays what it pays and
where you live shouldn't be a concern of the employer (the exception being if
they base you abroad and you get relocation taken into account).

~~~
nmstoker
Anther exception being if you're a public sector employee, there are certain
accommodations made for living in London:
[https://en.m.wikipedia.org/wiki/London_weighting](https://en.m.wikipedia.org/wiki/London_weighting)

------
Traster
>Employees who attempt to wiggle around those compensation adjustments will be
subject to “severe ramifications,” he said, as the company needs to account
for employee locations to avoid violating tax laws.

>Zuckerberg said Facebook will monitor adherence by checking where employees
access its VPN.

Do you think facebook employees respond well to these sorts of threats? Do you
think I'll get a call from HR when I go visit my parents and log in from their
house for a couple of days? I've got an idea, we can fit each of the facebook
engineers with an ankle tracker like those guys on parole. Can't be too
careful.

~~~
lclarkmichalek
I work at FB, and yeah, I'm not too fussed by this. Lying about where you are
working from goes under the "don't be a fucking idiot" category, and I don't
have much sympathy for idiots making life harder for their colleagues. Re
"threats", location tracking of company equipment is pretty much a necessity
to handle regulatory issues w/ geographies under sanctions (want to be an even
bigger idiot? lie about where you're working from, and move to crimea!).
Beyond that, internal systems also react to your location to do things like
change the timezone displayed in UIs, adjust notification preferences, etc. HR
having access to that data would be entirely unsurprising - if you're trying
to defraud your employer, this is already in your threat model.

~~~
CydeWeys
I'm not a FB employee but this doesn't faze me either. I would expect to be
fired by any employer upon the discovery that I was committing significant tax
fraud on my employer's income.

------
bob33212
Companies: We are paying you as little as we can get away with. Sorry that is
just how capitalism works.

Employees: Sounds good. We will work as little as possible.

Companies: Wait a minute here. We are a family and a team. You need to support
the team and the mission, even if that means working extra hours without extra
pay.

~~~
25mph
Reminded me of one conversation long time ago:

\- We're offering you whopping 3.5%. How cool is that?

\- Do I hear it right that you want my contribution to your company be 3.5%?

\- Blank stare.

~~~
seattle_spring
3.5% of what?

------
maximente
it is absolutely precious to see software engineers wake up to the reality
that they are, at the end of the day, plain ol' labor and are thus treated
like labor when capital gets itself moving in a particular direction.

all of the attempts to rationalize this as fair or unfair are not useful - i'm
guessing most SWEs will accept big salary cuts to work from wherever they want
in the country. hell, a large portion of the SWE crowd is willing to
distribute their labor /for free/ in the form of FLOSS, so i have no doubt
that they will not hold the line in any sense if big tech starts implementing
this in earnest. add to that fears of another tech recession (e.g. VC money
drying up) and mean big tech SWE salary may drop a fair chunk.

anyway, on the plus side, there may be a large cadre of talent available on
the cheap - seniors willing to work remotely on a more mission-oriented
project from their bungalow in Ohio. so it's probably a great time to start a
software company, or might be shortly.

~~~
revicon
I doubt middle america is going to benefit much from this. Once a company has
bitten the remote workers bullet there are far cheaper alternatives that
hiring a SWE in Ohio. There are huge numbers of highly capable devs right
across the border in college towns in Mexico and farther south in multiple
South American countries. All on US time zones and working at a fraction of
the price of a US developer regardless of their location.

~~~
ajphdiv
True. Why hire an American dev for remote work?

~~~
chaosphere2112
Timezones. It’s hard enough scheduling meetings across multiple timezones (and
boy are there a lot of meetings in FAANG), but going more than +/\- 6 is a
huge pain (I meet with east asia and europe on a fairly regular basis).

~~~
square_usual
ggp is specifically talking about Latin/South American companies, which have
approximately the same time zones as the US.

------
yters
With so many jobs switching to remote work, what is to stop employees from
simultaneously working multiple jobs at once? Not that they probably don't
already, but it becomes even easier once many high paying jobs are remote.
Plus, they can outsource a lot of it, so employees become mini software dev
houses in their own right. Then one guy snaps up all the top positions because
he is a 1000x developer due to his keen outsourcing sense. Etc.

~~~
25mph
Some non-compete agreements with binding-arbitrage by a employer-chosen
arbiter. Employers will try to limit options for labor. Whether it's
enforceable is another story.

------
Markoff
Pretty insane, as if people were not doing same job regardless of where they
choose to live. I understand you must offer competitive salary based on
location when hiring for on site job, since workers and company is fighting
against local competition, but at WFH you are literally fighting with everyone
everywhere, so the salary should be fixed for everyone instead punishing more
frugal people who choose to live in cheaper location.

------
m0zg
Seems like there's still MASSIVE room for arbitrage, just maybe not as massive
as what people were hoping for. I.e. as long as you live in CA (which is not
uniformly unaffordable) it'll be difficult for Zuck to argue that you should
make a lot less. The price differential between "half an hour commute to the
office" and "two hours one way" can be pretty staggering.

------
jimkleiber
I wish instead of trying to force us to live in one place because of
geographic tax laws, we would talk about reforming geographic tax (and other)
laws.

~~~
kristofferR
How would that possibly work without a world government?

~~~
jimkleiber
My gut reaction was yes, world government.

But as someone else mentioned, these are problems amongst the US states even
with a superceding government.

I'm starting to wonder if we'll ever have a government that is not
geographically defined, and if so, what it might look like.

~~~
cortesoft
I really like having different states and cities be able to make different
decisions about the tax/service balance... some states and cities can have
higher taxes and provide more services, while others can have low taxes with
few services. People are then free to decide which type of system they prefer
to live in.

I would hate to have to have only one single balance decided for everyone in
the world.

~~~
jimkleiber
I strongly agree! I liie the variations and local differences. The local
decision making power. I don’t want it all to be the same.

I just think with the internet, while our bodies may be in one place, we
interact with people from so many other places. For example, in this thread, I
may be interacting with people from maybe 5 different US states and maybe 5
other countries. Which region’s law applies? The one where I am physically
present? The one where the HN owner is registered? The one where the HN server
is located?

If an employee lives in Florida but works for Facebook remotely, a company
based in California but maybe registered in Delaware, which state’s labor laws
apply to that employee?

Maybe these things are obvious to others and I’m just far behind on
understanding legal jurisdiction, but I just think things aren’t so clearly
defined as “local” anymore.

------
ken
> The company, one of Silicon Valley’s biggest employers, is giving U.S.
> staffers who are approved to work remotely until Jan. 1, 2021 to update the
> company on where they plan to base themselves, at which point their salaries
> will be adjusted to reflect the local cost of living.

So it’s about maintaining control over employees, not managing company
expenses. You may be this successful, no more.

------
microcolonel
But salaries aren't a living allowance for living near the office, they're
what you negotiate with your employer as compensation for your work.

It's your business whether that's a lot or just enough for where you live.

If your company cuts your pay because you moved, even though you already
worked remotely with the same working hours, you have some deficiencies in
your relationship to work out.

------
pipework
If facebook employees can't figure out some way to... I don't know, "Connect
with friends, family and other people you know. Share photos and videos, send
messages and get updates" they'd be able to organize and solve their problems.

There's an incredible power in "No", but most of us aren't French and know
very little about how to handle kings.

------
btbuildem
I wonder how that salary adjustment will actually play out. If they drop
salaries to location average, they'll still have to compete with other
companies (and not just local, many other remote jobs too).

You could work for Initech in your locale, or FANG remotely, and the salary
would be the same. Would Initech have to raise their pay, or would the FANG
jobs suddenly be too demanding for what they pay?

------
u801e
> Employees who attempt to wiggle around those compensation adjustments will
> be subject to “severe ramifications,” he said, as the company needs to
> account for employee locations to avoid violating tax laws.

I guess it depends on the state, but if you decide to not have any taxes
withheld from your paycheck and just make quarterly tax payments, then is
particular assertion true?

------
aremoteworker
Confused why remote location matters for pay (from a tax/legal standpoint, I
understand it from a cost of living standpoint).

I work for a company that has remote workers all in different states across
the US and they (developers) are all on one shared pay scale _without_
different pays per location and they just pay state taxes in whatever state
they choose to live in.

------
tjbiddle
Bit of a bummer - This is precisely what I was doing pretty much my whole tech
career:

First landed a job in California, turned it into a remote gig, and then all
jobs thereafter were remote with either NYC or SF pay while I bummed around in
very LCOL places like Bali.

Already moved on to other pastures, but a bit sad to know that fallback isn't
there any longer. Ah well.

------
seasoup
The warm, sunny states with affordable housing and zero taxes will see an
influx of educated, rich workers. States will need to cut taxes to keep up,”

Or maybe, just maybe, the zero tax states will need to raise taxes to support
all the infrastructure costs that come with a growing population? High tax
states aren’t high tax just because...

------
untilHellbanned
will be interesting to see the salary hacks employees come up with

~~~
samsonradu
How can/will the employer check whether the stated location of its emloyees is
correct?

This is indeed a complex categorisation. What really defines my location in
relation to remote work? Since I’m not bound to one physical location anymore
I can split my time between different places. I might move every 6 months,
what then?

~~~
harryh
State tax authorities have dealt with these questions for decades. There are
well understood answers.

~~~
samsonradu
Still, working remotely hasn't been around for decades, is it all so
straightforward? From an EU perspective I can assure you it's a deep mess.

People have a different, long-term relationship with the tax authorities
because 'you're not going anywhere' and this makes it possible to settle at a
later time. Also tax authorities take action in retrospect specially because
things are difficult to prove on-the-spot, but Facebook will need to pay you
next month and next year you might be working somewhere else. How will they be
able avoid over/underpaying you?

[https://www.bloomberg.com/news/articles/2020-05-12/stranded-...](https://www.bloomberg.com/news/articles/2020-05-12/stranded-
super-rich-confront-tax-chaos-after-pandemic-lockdowns)

------
timwaagh
And so it begins, the downsizing of sillicon valley level salaries. Soon
enough, they will be encouraging remote employees to move to inexpensive
locations. Then they will start evaluating whether employees who come to
office need to be there or can be encouraged to go remote.

------
paulryanrogers
One way I've heard the company thinking explained is replacement cost. When a
valuable employee gets a better offer a company suddenly may be willing to pay
more for the same person, regardless of location. Now if they can replace that
person without spending more then they will.

There is no loyalty.

------
willart4food
This is an issued that existed before COVID-19, more so now.

Here's the thing: what prevents someone from moving after taking a job that
allows for "remote work"? And - more importantly - what would be the
repercussions should someone be found out?

My guess is that the risk is worth the money.

------
j0hnml
As someone who is considering asking for the first time to move out of my high
CoL area to be fully remote, does anyone have any advice on what to expect and
how to navigate said conversation? It’s a bit nerve-wracking to think about
and I want to be best prepared.

------
slykar
To be fair, you should be getting a proper adjustment for working from home,
because the cost of the office is now on you. You use your own chair, desk,
computer, living space, etc. So a % of your rent monthly + few $k on start as
a care package.

------
whateveracct
I wonder what the granularity is? Can I move to a WA area with middling CoL
and benefit from that Seattle-derived salary bump? If they take issue you
could make the claim that you would normally commute to Seattle so you deserve
the Seattle remote rate.

~~~
trfhuhg
You can even rent a trailer in the Seattle area and hire lawyers to explain
you how to game these rules in the most legal way. When 500k/year are at
stake, employees will be very creative (and, afaik, they are hired precisely
for their creativity and outstanding intelligence).

------
xtat
So basically employees outside the valley subsidize the rents of those that
decide to stay. Who's gonna fall for this?

------
Donald
Using their own app to track their employees' location sounds very dystopian,
and potentially complicates the lives of employees without a clear location
but who have established a residence for tax purposes.

------
BurningFrog
Until FB publishes how they'll set wages in different locations, discussion
about the policy is pretty much useless. Since the actual policy is unknown.

Not that that has ever stopped an online debate before :)

------
holografix
I’m struggling to see how this will promote remote work arrangements. Perhaps
that’s the exact intention? “If you think you can stop coming into the office
to save time and money we’ll cut your pay”?

------
ArtDev
Location-based salaries is offensive and just plain wrong. Monitoring where
employees login from, so the company can cut costs, seems typical of a company
like Facebook.. but still makes me mad.

------
dba7dba
I'm thinking why not move to Hawaii or a beach town 1hr - 2hr north or south
of Santa Monica CA? Quality of life will improve vastly for those who can
afford to do so.

------
zrail
Ultimately if you’re working for salary your pay is at the whim of your
employer. If you want to make real money as a remote worker then switch to
consulting.

------
sys_64738
I'm surprised FB would need to ask workers to provide this information given
FB usually knows more about an individual than the individual does.

------
chris123
Locality Pay if standard. The federal government had been doing it for
decades. Base pay plus locality adjustment based on where you live.

------
russellbeattie
It says quite a lot about Facebook's culture and employees that they felt the
need to be so explicit and public about this issue. Normally, this would be
talked about on an individual basis, or an internal HR memo once it was
determined there was an actual issue.

At Facebook, they apparently are so worried about their employees lack of
ethics as a whole, they felt the need to just immediately threaten the entire
company. From what we all know of Zuckerberg and Facebook, this shouldn't be
surprising, but it's amazing to see it confirmed.

------
rmc
Facebook employees should talk to their union about this.

------
Simulacra
"...because at the end of the day, do not pay the employee any more than
absolutely necessary." \- Facebook Executive, probably.

------
mrfusion
What if I work in San Jose but life in a van? Why do I get a high salary but
someone in a house in Ohio gets a lower salary?

------
egypturnash
I bet this is a thing a union would help with!

------
xtat
Easy- don't work for facebook. I have worked inside and outside the valley and
never had a comp change

------
znpy
What's the problem? Leave Facebook and join another company that doesn't apply
such stupid rules.

------
aianus
Still win-win depending on how much they scale.

$50k/year in Thailand or Vietnam is way more luxurious than $200k in SF.

~~~
refurb
Agree with foreign destinations, but I assume any adjustment within the US
will be a net negative for the employee since its mostly housing that impact
COL.

A 1 bed in SF is $3,000 and say $1,500 in NC. That’s $18,000 post-tax or
$24,000 per-tax.

If FB lowers your salary from $200k to $175k (not a big jump), you’re down a
net $1,000 per-tax.

------
harrisonjackson
How will this work for digital nomads? Same as wherever they pay state taxes,
I guess.

------
Khelavaster
So, employees can move to rural, inexpensive parts of northeast California?

------
booleandilemma
So no working for Facebook and moving to Vietnam to live like a king then.

~~~
herval
A nocturnal king, that has to work midnight to 8am to keep up with the rest of
the team, if that’s your thing :)

I lived like that for a month (working on a fully remote company, but the
majority of the people were on US timezones). It’s not for everyone.

------
booleandilemma
Does this apply to both managers and engineers?

------
vidanay
So there are going to be 20,000 engineers with their home in Malibu through a
dead drop address and living almost anywhere else.

~~~
crorella
What bout the tracking of phones and laptops? You'd have to have your laptop
with a remote desktop software or something like that.. or to spoof the GPS
and make sure you connect to an anon wifi that is not sharing its position.

~~~
25mph
Someone who's paid 400k can afford to buy a bunch of phones and laptops,
install whatever survelliance software on them and leave them at a rented
trailer.

------
buboard
.

~~~
tenaciousDaniel
Some friends of mine who live in NYC are actually considering "renting" their
addresses for remote employees who get shafted like this.

From my perspective, it's the same as registering your business address in
Delaware to take advantage of their low tax rates.

~~~
dastx
Watch as companies start lobbying to make this illegal.

~~~
hn_throwaway_99
For tax purposes, that is already illegal. I.e. most (all?) states determine
your residency based on where you actually sleep a majority of the year. My
guess is that FB will base it on where you claim residency for tax purposes,
so if you lie about it you're committing tax fraud.

~~~
buboard
.

~~~
harryh
No.

So many people seem to think they've come up with clever workarounds to tax
laws. It's almost never true.

------
ikeboy
One of my pet peeves is misuse of the term arbitrage. It in no way applies
here.

------
fogetti
Sarcasm on _Offshoring is only allowed for corporations, not for employees.
What did those pesky peasants think?_ Sarcasm off

------
buboard
stage of grief: denial

------
cracker_jacks
Is there any transparency on how "a moderation downweight" works? It sounds
like a useful feature, but what does it exactly do, and is there a public log
for these types of things.

~~~
alexpetralia
Here is a prior discussion of this issue by dang:
[https://news.ycombinator.com/item?id=23286685](https://news.ycombinator.com/item?id=23286685)

~~~
mistermann
A rather interesting reply.

I'm surprised dang seems to believe communities don't self-enforce overton-
window-esque acceptable norms of speech and behavior.

~~~
cbdumas
I'm not an expert by any means, but I believe that at this point there is some
evidence that online communities actually do exactly the opposite.

[https://journals.sagepub.com/doi/full/10.1177/01925121176921...](https://journals.sagepub.com/doi/full/10.1177/0192512117692136)

[https://techcrunch.com/2017/09/11/study-finds-reddits-
contro...](https://techcrunch.com/2017/09/11/study-finds-reddits-
controversial-ban-of-its-most-toxic-subreddits-actually-worked/)

~~~
mistermann
Sometimes. As is often the case, there is evidence for both (banning/limiting,
Chilling Effect, power pressure & scolding, etc), depending on the community.

In your second link, the topics were literally banned from the platform,
rendering the question moot in that case.

------
lonelappde
That's SNI for the article, but not Significant New Discussion in the
comments.

I always wondered though, why not let these flamebait discussion topics stay
up as a Honeypot to keep the other threads cleaner?

~~~
dang
I don't think that's an accurate model of how flamewars work. The fire analogy
is better: if you let them burn they spread. Worse, they evoke worse from
others, and if allowed to persist, they lower the norms of the community. I'd
throw the broken windows theory into this metaphor soup also.

(I've detached this comment from
[https://news.ycombinator.com/item?id=23295278](https://news.ycombinator.com/item?id=23295278)
to minimize the off-topicness at the top of the page.)

Btw you're largely right about the discussion not being significantly
different, and (more importantly) about that being the key thing to look for.
This is not widely understood! However, my posting that and pinning it to the
top of the thread did lead to a wave of comments about the SNI, which was the
intent. Maybe the discussion will shift a bit in that direction.

I like that acronym, partly because it really is a specialized concept that
deserves a pseudotechnical name, but mostly because it's fun to say "snee".
SNI SNI SNI.

~~~
tptacek
It's also "Server Name Indication", the piece of TLS that allows a single IP
to serve multiple hosts by having the client signal the name they're
requesting, and also "Secure Networks, Incorporated", my first dev job. You
could just call it "snee!" (I advise the exclamation point as well),
whimsically, and let people just deal with the weird etymology.

It's a big site! You stand a decent chance at introducing a new word to the
lexicon!

~~~
pvg
There's something to be said for casual, no-explanation, no exclamation point
use of 'snee'. It suggests to readers they just happen to be unfamiliar with
this common internet term like the sort of people people who don't know
'scrome' is 'chat backscroll you don't intend to read'.

~~~
flummox
[https://www.urbandictionary.com/define.php?term=snee](https://www.urbandictionary.com/define.php?term=snee)

~~~
tptacek
That's so dumb; the funniest phoneme in the word "sneeze" is the one with the
"z" sound. It should obviously be "peeze".

Another reason to just use "snee" here, to reclaim the word.

------
aphextron
Who on earth actually wants to work for a company like this?

~~~
CydeWeys
A company that obeys tax law?

I'm not being facetious. Companies face significant legal liability for not
paying taxes correctly, and they have to ensure that all applicable federal,
state, and local taxes are correctly being withheld and reported for their
employees. They can't just look the other way and blindly allow employees to
evade tens of thousands in SALT taxes annually.

~~~
mrfusion
That’s a straw man. The real question is why do they have to lower your salary
if you move? Is your work less valuable?

~~~
PenguinCoder
I agree. This type of action is signalling the company doesn't actually pay
you for your knowledge or output. It pisses me off. Flip the argument around;
if FB hired you to work remotely from Montana, then you decided to move to San
Francisco, would they INCREASE your pay based on COL?

If the answer is "no, of course not", then why is it okay for them (or any
company) to pay you less, if you move to a lower COL area? It absolutely isn't
fair, and companies want to eat their cake and have it too.

~~~
klipt
> if FB hired you to work remotely from Montana, then you decided to move to
> San Francisco, would they INCREASE your pay based on COL?

If you actually transfer to an SF team then yes, most large, multi office
companies would adjust your pay to the SF bracket. If course that requires
that an SF team has headcount and wants you. You can't just move because you
feel like it.

------
iandanforth
This is wage discrimination. The problem is that it is, so far, legal
discrimination.

If an employee gets married, is that a legal reason to cut their salary? No.

If an employee has a child, is that a legal reason to cut their salary? No.

If an employee comes out as gay, or updates their gender identity, is that a
legal reason to cut their salary? No.

The first two could logically be tied to decreases in productivity, but even
if it _did_ decrease a workers productivity you can't cut their salary. It's
illegal.

So what's the real problem here? Taxes.

Let's say that we correctly argue that the product of ones output should be
compensated at the agreed upon rate and that if efficiencies of production are
found by the producer they are under no obligation to 1. Disclose that fact or
2. Pass on savings to their customer.

Despite the fact that this is logically and economically sound the _reality_
is that legislators will balk at legislation which would make their state less
economically attractive. Convincing them is not an impossible task, but it's a
hard one.

The principle of "equal pay for equal work" is not naturally embraced by
industry. Almost any distinguishing characteristic that could be used as an
excuse to reduce wages has been used to do so. Laws championed by labor
movements have been the only way to curb the natural tendencies of companies.

So is it normal and natural for a capitalist CEO to take this position? Yes.
The moral and logical ramifications have little power. It's only when those
ramifications are instantiated by law advocated for by impacted populations
that we should expect change.

~~~
Barrin92
If you think this is illegitimate wage discrimination I have a question for
you, if you order coffee in bumfuck idaho, do you pay the barrista, who does
the same work as one in Palo Alto, the same price for their coffee?

~~~
iandanforth
This is not a valid analogy. There are two decisions

1\. Do I pay the price asked?

If I'm in Idaho and I want coffee and they are asking for Bay Area Starbucks
prices the answer is "Yes." But that's because I'm used to it, and its not the
point. The question is:

2\. If the store buys a machine that decreases their costs by 20% am I
entitled to demand a lower price?

No.

~~~
Barrin92
Entitlement has nothing to do with it. If there is a machine that lowers the
costs of production by 20% the price _will drop_ , because there's now an
opportunity for competition to drive down the cost of coffee. That's how
things become more affordable in a market economy.

And this is the actual point of the analogy. When people can suddenly work
from locations that have lower costs of living, then the cost of labour drops,
that is to say more people are willing to do the same work for lower wages
than before. That means that firms can purchase that labour more cheaply.

Nobody is entitled to anything here, the price discrimination is simply the
result of the market correctly allocating resources, and that's a good thing,
because it really does not make much sense to hand surplus profits to
starbucks or to tech workers.

One very simple reason why the latter is really bad, if a lot of tech workers
suddenly sit in regions with lower costs of living their high salaries will
rise the costs of living, creating a huge problem for all the people in the
regional economy who don't work at Facebook.

------
one2know
Facebook is afraid of a Facebook Boise office , Facebook Salt Lake City
office, Facebook Houston office, etc. Their office locations are based on the
political preferences of their board members and management. With no offices,
they can't control the political makeup of the company.

~~~
seattle_spring
Salt Lake City and Boise are pretty liberal and both vote blue. Houston is
overall pretty split, but has voted for a Democrat mayor for more than 30
years.

What "political preferences" are you suggesting Facebook is afraid of from
that focuses on the 3 named regions?

~~~
one2know
Facebook managers, who a large portion of are foreign nationals, prefer
foreign nationals manage US offices. US citizens might not be as in favor of
that and probably prefer US nationals manage US offices.

~~~
seattle_spring
That seems like a pretty outrageous claim. Do you have any evidence to support
that? My friend works for FB Seattle and the "site manager" is definitely a
white US citizen. What benefit would FB have from having "foreign nationals"
run domestic offices?

I'm trying to interpret your comment as anything but xenophobic, but I'm
having a really tough time doing so.

~~~
one2know
Just go look at your Seattle org chart. I never said there was a "benefit,"
just that foreign national managers prefer that foreign national managers
manage US offices and that is why they fear offices in areas that don't adhere
to this globalist orthodoxy that is in the bay area and Seattle. That should
be self evident.

~~~
jauer
This is nonsense.

There is no "Seattle org chart." A given office may have a lead, but only
small percentage of people in the office will report to the lead. In some
cases the lead isn't even a manager.

Personally, across four teams and six managers, only one has been a non-
citizen and he was a permanent resident from an anglosphere country. Looking
around, pick a random manager and you'll probably find a white guy from the
US.

