Will employers pay students working remotely differently depending on where they live?

Posted July 09, 2020 by

In the early 1990s, I worked for Honeywell in its legal office that supported its human resources department. We addressed this same issue way back then.

The company decided, as corporate policy, that all employees nationwide would receive the same benefits regardless of where they lived. We implemented a blue skies policy, meaning that every employee received the most generous benefits package required by law, so if one state required employees to be paid in full for jury duty, then all employees would be paid in full for jury duty even if their state didn’t require any pay. On the other hand, wages were localized. We determined what the job would pay if performed in the city in which the headquarters was located and then adjusted for cost-of-living across the country. 

College Recruiter has taken a somewhat different approach. We also offer the same benefits nationwide but chose to offer the same wages also. If an employee chooses to live in a low- or high-cost area, that’s their choice and impacts the amount of money they have available for discretionary purposes. The wages that we pay may be excessive in some areas and insufficient in others and we’re fine with that. We understand that it makes it less likely that we’ll hire a software developer who chooses to live in the San Francisco Bay Area but very likely to hire a similarly skilled person who lives in a rural area in the middle of the country. Not only are we okay with that, we like it because we believe that the software developer in San Francisco is far more likely to jump ship far faster than the developer who lives in a more rural area and, therefore, has fewer employment options. 

Will some employers follow the Honeywell model and pay employees differently based on where in the U.S. those employees live? Yes, absolutely. And will other employers follow the College Recruiter model and pay employees based on the work they do instead of the zip code in which they reside? Yes, absolutely. I hope more follow the latter path, but I suspect many will follow the former.

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