A top law firm, Stephenson Harwood, is allowing staff to work from home full time but only for a 20 percent pay cut.
Academics from Henley Business School have recently published a report on flexible working which reveals that 27 percent of employees surveyed would be willing to take a salary reduction to work from home full time.
The research suggests that the amount that workers are willing to give up was not trivial, with employees being willing to forgo over £3,300 per annum to be able so.
This is a sizeable figure, but to put it into context, the calculation of the average expenditure of commuting by car is £1,768 per annum, and overall, a family spends over £3,700 on transport each year according to the UK’s Office for National Statistics (ONS) (excluding air travel).
Is lower pay legitimate?
Whilst working from home certainly reduces expenditure costs for employees, there are numerous issues which nonetheless arise.
Group Legal Director at employment law and HR support firm WorkNest, Donald MacKinnon, says: “Taking this approach to home and flexible working could cause a number of issues for a business, some of which could also be classed as discrimination which can have severe consequences.
“For example, if homeworking is being used by a woman because they have caring responsibilities or by a disabled person then arguably paying them a lower wage for working from home may be indirectly discriminatory.
“The employer would need to justify that lower pay is a legitimate and proportionate measure which might depend on whether the employer could show that an employee saves 20 per cent of their wage by working from home.
“It could also raise equal pay issues if the same work is being carried out by a female home worker compared to a male office worker. It opens up questions around whether the two roles are comparable.
“Ultimately a move such as this could leave an employer vulnerable to potential claims as well as it possibly having an overall negative impact on employee engagement.”
Martin Williams, Head of Employment at Mayo Wynne Baxter said:
“Stephenson Harwood has said it was not expecting many people to take up the offer of working from home full time with a 20 per cent pay cut – which is not surprising as it is a big chunk of money. It makes you wonder why it was offered it in the first place.
“The question is, if working from home is going to have a detrimental effect on meeting customer demand or quality of the work produced, how does paying someone less overcome that problem?
“It is hard to see how taking money away solves any of the issues an employer thinks they might have with people working from home – especially when they are saving money on office space.
“If someone has been working from home all this time and it has not had a negative impact on the business, they can make a Flexible Working Request.
“An employer does not have to acquiesce to that request, but if the employee has proven that they can work remotely and effectively over the past two years, it’s going to be very difficult for the employer to decline their request.
“Having inflexible blanket policies on working from home is not a sensible approach. What employers need to do is to manage employee expectations and consult with staff on a case-by-case basis.”