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Financial Issues of Telecommuting FAQ

Should I be required to accept a pay cut in order to telecommute? I am a long-term employee of my company and considered to be a valuable asset. I am currently in negotiating with the company to telecommute from home. My company is on the West coast, and I currently work in a small leased office on the East coast. The financial savings for the company will be over $1,500 per month from the current rent that we are paying; all other costs and work responsibilities remaining about the same. In our negotiations, our CFO insists that all he has read indicates that it customary for telecommuters to take a 10-20% salary reduction because this new work arrangement is to their benefit. Is this really typical, and if not, how can I respond?

In a nutshell, your CFO is wrong. It is far from customary for telecommuters to give up 10-20% of their salary for any reason, whether it's because of the reduced commuting costs, reduced meals and clothing expense, etc. Your salary is provided for the work you produce, and of course also reflects the local labor market and cost of living - that's why an executive working in Chicago earns more than a similar executive working in a small town in Montana, for example.

If the company is going to be saving $1500 a month from the current rent AND wants to cut your salary by any amount, that sounds very greedy to me and is not justified. You can tell your CFO that his assumption is not correct. The only time I've seen telecommuters take a pay cut is if their work hours change, so their pay drops proportionately. While it's true that your ability to telecommute from your home will be to your benefit, your employer will benefit at least as much. And, as a long-time employee, your job knowledge has value to the company and thus they should be willing to work with you to come up with a fair solution.

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