Microsoft attracted some attention last week with its evolving response to the COVID-19 pandemic and how and where it will allow employees to do their jobs. Conservative radio personality Rush Limbaugh was among those weighing in, as he seized on the notion that some workers would be able to relocate elsewhere in the country as part of Microsoft’s “hybrid workplace” plan.
The Redmond, Wash.-based tech giant informed employees that new guidelines would allow more flexibility when it comes to working from home part of the time and that managers could approve relocation for employees who could do their job from a different city or state.
How much those relocated employees would be paid is part of a larger debate happening at companies such as Microsoft, Facebook and others. Facebook has previously said that location affects compensation — a software engineer who lives in San Francisco and opts to move away from that city’s high cost of living and real estate costs would take a pay cut to do the same work from a city such as Omaha, for example.
In the guidance it released last week, Microsoft also mentioned how employees who move across country for remote work could face a change in compensation and benefits depending on the company’s geography-based scale.
And the The Wall Street Journal further reported Sunday on the trend and the tensions it’s causing across the tech landscape between some of the most profitable companies in the world and skilled employees who enjoy high salaries — especially as the pandemic reshapes remote work into a larger scale, longer term practice.
“You’re hiring a person and the skills they bring,” one tech CEO told the Journal, calling super profitable tech giants “hypocritical.”
In a call from a listener on Friday, Limbaugh used Microsoft as part of his reply when responding to the question, “If these Democrats love their states and their cities so much, why are they leaving?” The listener from Connecticut added, “What are they gonna do? Come to my state and screw up my state now?”
Limbaugh said that’s exactly what the plan is, to bring their politics and “corrupt your state.” But he defended those who are moving against the practices of their large employers, calling out a “fascinating story” of how “a lot of liberal Democrats” who work at Microsoft are leaving “high-tax states where Microsoft has offices.”
Washington state, where Microsoft is headquartered and employs more than 50,000 people, has no state income tax but its sales tax rate is among the highest in the U.S.
“You know what Microsoft is doing? Cutting their pay. Microsoft is reducing their salaries commensurate with the tax savings they will find when they get to their new states. I’m not making it up. Not making it up. This is cruel, it is punishment, ‘Oh, you think you’re gonna leave us and do better financially? Well, watch this.’ And so their pay, their salary, is being cut so that the tax cut at their new state will not be seen as additional discretionary income or take-home pay, if you will. I mean, that’s the low of the low. You talk about get-even-with-’em-ism.”
The rub, as Limbaugh and others see it, is whether the pay cut would reduce any of the benefit of moving to a place with a lower cost of living.
In the Journal story, human resources researcher Brian Kopp of Gartner Inc. said that cost of living usually falls more than the paycheck, and a San Francisco software engineer who takes a 10% or 20% pay cut can still “live a far more lavish life” in a city such as Nashville.