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I've been with my non-profit organization, based in San Francisco, for three years. In October, I informed my supervisor that I am planning on moving to the Tahoe area in mid-December. The move is for personal reasons (my partner lives in Tahoe and we have been commuting back and forth to see each other for the last 2.5 years). I let my supervisor know that if possible, I would like to stay with the organization and continue in my role, working remotely, with semi-regular visits to the office (at least quarterly). This is not without precedent; we have a culture of remote- and flex-scheduling: folks who live in the Bay but outside of San Francisco are permitted to work from home 2-3 days per week, and we have one employee who is completely remote.
My supervisor responded positively to my request. She said she was glad that I wanted to stay with the organization because I am a valued team member, and that she has no concerns about the move because I've proven that I work really well remotely. However, she did state that because I was moving out of San Francisco, it would involve a pay cut, "for equity reasons" -- the implication being that since I would presumably have a lower cost of living than others living in San Francisco, it wouldn't be fair if I were to maintain my current salary. She didn't have a specific percentage for the pay cut just then, and said that because she'd never dealt with this situation before (i.e., someone moving from being an office-based employee in the Bay Area to a remote employee outside of the Bay), she would have to do some thinking about what would make sense.
We just revisited the conversation, and she let me know that a 10% pay cut is what seems "fair" to her. I have some strong reservations about such a significant cut and the entire concept of a cut in the first place, which I did communicate to her during our conversation. It's not clear to me what the organization's philosophy and policy is when it comes to compensating employees based on where they live or how much they work remotely. For example, how much of salary is based on the level of responsibility and/or the nature of the job, and how much is based on cost of living where the employee lives and the amount they work remotely?
When I posed these questions to my supervisor, she said that she did not have a precise formula that led her to the 10% pay cut. However, she pointed out that I am the highest paid manager at the organization and my move out of San Francisco would create too great of a discrepancy in pay between the other managers and me.
Additionally, for all of her insistence on fairness, I don't see this "policy" being consistently applied across the organization. We do have a location outside of the Bay Area, operational for six months out of the year, where employees are typically paid 10-20% less than their Bay Area-based counterparts. However, they are provided with free housing and meals while on contract. What seems more comparable of a situation are the folks who are partially remote and live outside of San Francisco. When folks arrange their schedules to come in to the office less often, or move to a less expensive part of the Bay Area, their pay has remained the same. (**I should note that I know this because I am responsible for processing payroll, and I therefore have access to the salary of everyone at the organization.)
Was I naive to ask to work remotely to live outside the Bay Area without expecting that there would be a downward adjustment to my salary? If this is indeed unfair or not a best practice for an employer, how do I present that to my supervisor? I've been doing some research, and I think because this is still a relatively new situation for employers, I haven't been able to find definitive answers. I did find a white paper by PayScale, How to Manage Pay for Virtual Workers, that states the following in its guidelines for pricing virtual job positions: "Is this a current employee who is relocating? If the answer is yes, then chances are high that you won’t take money away from that employee. In this case, you’re best to keep their salary in alignment with the ranges of your corporate or regional office." How can I best articulate to my supervisor the logic behind this recommendation from PayScale?