With remote work plan, Facebook dashes hopes of paycheck arbitrage | Hacker News Reader

With remote work plan, Facebook dashes hopes of paycheck arbitrage

mobile.reuters.com

347 pointsrdslw775 comments

Remote work threads have been the biggest cliché of HN since the pandemic (and were one of the bigger ones already), and arguing about location-based salaries has been the biggest cliché of remote-work threads lately. So normally this follow-up post would get a moderation downweight (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...). But I'm lessening the downweight because it seems to me this bit may count as SNI (Significant New Information):

Employees who attempt to wiggle around those compensation adjustments will be subject to “severe ramifications,” [Zuckerberg] said, as the company needs to account for employee locations to avoid violating tax laws. Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN. Facebook also uses its own apps' to track employee locations, according to CNBC [...]

(See https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... about SNI.)

This is a very subjective thought experiment and I'm sure you could make all kinds of arguments against it but here goes...

Imagine person A lives in an area with a high cost of living and gets full salary. Person A is able to purchase a house at a high valuation relative to the national average. Person B in a rural area is able to buy perhaps as nice a house on a smaller salary in a below average market.

Now look at the options available to these two people when they want to move. Person A sells at market rate or perhaps a little below and can move to a lower cost of living with a relatively large pile of cash. Person B has no such option. The real estate market arbitrage is available to person A and not to person B.

The salary of person A looks like it produces options and upward mobility. The salary for person B seems to have more limitations.

This is absolutely 100% true. And people considering the pros/cons of high COL+high salaries vs low COL+a lower salary should very much consider this when making their choices.

And it's not just about the cost of housing. That $1000 phone you cary: it'll be a higher % if your salary if you go for the latter choice instead of the former. Same thing for many many other purchases you will want to make.

I find that people don't think about this enough. To their detriment.

Yep. With these "cost of living adjustments" it's almost always a better move long term to live in the higher COL area, especially if you are living inexpensively and saving the vast majority of your money. I save more per year than I would gross working as an engineer near my hometown...

Although I will say, person B in your scenario has potentially more upside on their housing equity, and they do potentially get a higher standard of living short term. Of course, there are aspects of standard of living such as public transportation, good public schools, people in your area you'd like to date/be friends with that person B may not be able to buy.

I foresee the bar being raised for those wanting to enter a high COL city in the future. I’m already noticing an emphasis on companies wanting to hire more outside of the Bay.

Yeah, plus CoL differences don't affect ALL things you spend your money on; amazon sells stuff for the same price no matter where you live.

I’ve done the budget calculations based on my own personal spending and found that outside rent, the majority of what I spend money on costs essentially the same no matter where I live (if you normalize out taxes).

In the US, state and local taxes can cause a huge variance. Certain states are in debt for multiple tens of thousands of dollars per taxpayer more than other states, and those taxpayers will have to pay far more for debt service.

This whole FB thing is actually more nuanced than people talk about:

1) It's only for senior engineers

2) US only right now.

Essentially, this is a play to increase senior retention. California is pretty much unaffordable for most people who weren't pre-IPO or very good at saving.

Therefore, the trend is for more senior people to leave, and move to cheaper places. By allowing remote for seniors, FB have a good shot at keeping people for longer, which is incredibly important for large engineering driven tech-co's as the churn in tools/frameworks/approaches is really high, and keeping people who remember Tool version -2 is super high leverage when they come to consider tool version + 1.

I've always assumed these companies liked the senior rotation in order to keep seniority (and wages) lower. It also likely has the effect of keeping average age lower, which would make for an interesting disparate impact lawsuit.

> In the US, state and local taxes can cause a huge variance.

Agree 100%, hence why I said assuming you normalize out taxes. Guess I could’ve lead with “rent and taxes” to make that more clear.

99% of the things I want to buy are dirt cheap. The other 1% are expensive to the point where they are unaffordable for almost everyone. Think about something like a $120k 3d metal printer. Those things are actually possible to buy if you move to SV.

You’re not taking home a pile of cash without paying a ton in taxes. That’s why you see more homeowners in the Bay Area renting rather than selling.

$250k/$500k (single/married) of gain on a home is tax exempt (federally). That should cover the VAST majority of home-owners.

It’s definitely not if you bought 5+ years ago.

Not in the bay area it won't.

Looking at average sales values from the low point in ~2010 and today's high, there's about a $700k difference (looking at SanFran city).

So, yeah, if you timed perfectly on an average house or higher, you'd have $200k+ of income to report. But, anybody who bought an average home within 5 years is going to be below the $500k threshold.

Either way, you still walk away with $500k tax-free. Which is still a massive pile of cash by any measure, contrary to the post to which I responded.

Rich people don’t get rich paying taxes.

Traditional economic theory should handle liquidity in pricing.

That is it would be a weird market where prices were artificially high for houses you couldn’t sell quickly. The price would just lower and the rent should follow.

I’m experienced enough to believe markets don’t follow traditional models, but in this thought experiment at least liquidity isn’t an interesting new unknown variable.

Bingo. In a high COL area, you have the option to retain a significant surplus of your exchanged labor if you trade off COL for inconvenience, which adds up to compounding gains over time. And as your thought experiment proves, the real move is to relocate after a substantial tranche of that money has been earned, at which point the lower earnings are no longer as much of an issue.

Another way I've been thinking about it over the past few days is that this also makes side project optionality significantly more attractive. If you can make a side project that makes XX% of your BigCo T1City pay, the point at which you're making top 50% percentile low COL MRR could become significantly lower than if you planned on remaining at that BigCo in BigCity forever.

I agree, but want to mention another variable that throws a wrench into things:

The longer it takes for one to accumulate that substantial tranche, the more entrenched they become in their home city (family, friends, community) and the more challenging it is to move.

Here's a thought experiment. Let's say an employer is based out of downtown San Jose, and employs people on-site. Would it be reasonable for them to adjust salaries depending on what city an employee lived in? The average rent for a one-bedroom apartment is $3,291 in Mountain View, but $2,390 in Morgan Hill. If an employee moved from Mountain View to Morgan Hill, would the employer be justified in reducing the salary of the employee to adjust for the fact that the (on-site!) employee now lives in a lower cost-of-living area? (Let's assume that other CoL factors are not more expensive in Morgan Hill than Mountain View, which I feel is a safe assumption).

Would it be justified if the company was fully remote?

What about if the employee moved to Sunnyvale? The average rent is $3,016; a smaller difference, but still cheaper than Mountain View.

Or better yet, what if they moved to Stockton? A 1-bedroom's $1200/month there, and it's still technically within commuting distance from the bay area.

I'm not sure that the example is similar to the current topic: rent is cheaper than Morgan Hill largely because it takes an hour to drive to lots of workplaces. People are choosing between paying higher rent in Mountain View and paying with their commute time in Morgan Hill.

It's arguably a different scenario from someone attending VC from their $400K, 5-bedroom mansion in Raleigh, NC.

But that's also sort of the point, isn't it? When you are dealing with a remote worker, the commute time doesn't matter. You don't need to consider paying geographical based salaries, because the location isn't relevant. There is no "paying with commute time."

You just need to pay the amount that enables you to get the workers you need. The "fair" thing to do is to pay people without regard to location and let them decide for themselves whether it is worth it to live in a HCOL area or not.

Well, in an ideal, completely efficient market for remote workers, of course the "fair" thing to do is to pay for enough salary to hire the best people in Prague or Bangalore. People can decide whether they want to live in San Francisco with that salary. Most people can't, so naturally there will be a diaspora spreading out to low-cost areas, and rent in SF will drop until the area can be "competitive" again.

But this dry description involves a ton of economic/social upheaval, which we (the society) really wouldn't like to deal with, especially right now. (Not to mention a "completely fair market" is an illusion: you can't just fire your entire team on the bay area and hire replacements from Bangalore.) So a compromise is reached, where companies try to keep people they have now at roughly the same price they're paying now, with ugly, stop-gap measures to dissuade people from getting ahead of the equation.

I'm not saying we should thank Facebook - it's behaving completely in its own interest - but people who complain that this isn't "fair" might want to answer what's their position on the logical conclusion of a "fair market" for remote workers.

You've given voice to exactly what I intended in my comment, but didn't quite have the words to say. Thanks

Right, but they know they don't have to pay that remote worker as much to keep them, because that remote worker doesn't have as many options with where to work... or at least, that was the case before EVERYONE became remote workers.

Companies always pay as little as they need to in order to retain the talent pool they feel is required to do the job they want. They aren't going to pay someone more than they HAVE to out of fairness.

If all companies are remote and competing for workers everywhere in the world, you will see geographic salary discrepancies disappear... slowly.

> You just need to pay the amount that enables you to get the workers you need.

That depends on where these workers already live or are willing to live. You can't get enough applicants from Silicon Valley if you pay too little, you get way more remote applicants than you need if you pay too much.

> The "fair" thing to do is to pay people without regard to location and let them decide for themselves whether it is worth it to live in a HCOL area or not.

That's just not how pricing works. If I can work from anywhere without even having to commute, I'll be willing to do that for far less money. I don't think that's unfair at all, after all my quality of life will be as good or better.

lol I grew up in Raleigh NC, and 5 bedroom mansions are not $400k, they're closer to $1mil even on the outskirts of town.

What I don't get about these ideas is that isn't the factor "how much do you need to be in the office?" If you don't need to be in the office, why not just keep salaries the same and then you select from a larger pool of candidates (this should give you a pretty good pick, but you're still limited by when waking hours overlap).

If you only need to be in the office once a month, dock a little as now you have to cover travel and lodging.

It really seems like the factor of pay should be based on how important physical presence is, not on where the person is. Because otherwise I don't see it as a rational thing for a headquarters to be in SF and an employee in Arizona to get paid less than an employee in NYC. There's more advantages for the company for having your employee(your average programmer, at least) be in AZ rather than NYC. You need them in the office? A whole lot easier/cheaper to get that AZ employee there.

> why not just keep salaries the same and then you select from a larger pool of candidates (this should give you a pretty good pick, but you're still limited by when waking hours overlap).

Because you make less profit if you pay the outrageously high SF salaries. Bay Area salaries are incredibly high because there is outrageous competition for the top engineers and there are a lot of rich companies local to the region who can afford high salaries. They aren't able to hire a bay area engineer at 2/3 pay because that hire can go somewhere else.

If you are one of the early ones to the remote-game then you aren't competing with other bay area companies for an engineer in Tulsa. You are competing with local Tulsa businesses, which don't tend to make the gazillions in profit or VC money needed to afford to pay engineers 300k+. So you don't lose as many candidates when you say now you are paying 150k. So you make more money.

Over time this difference could even out as more and more companies become remote-friendly or remote-first and there are no more local job markets. But this isn't going to end with bay area salaries for the whole world outside of a very very small number of companies and very top performers who can command high pay.

How does this address a office in SF and a remote worker in NYC making more than a remote worker in Phoenix? Both workers are remote. How does the NYC worker provide ~2x utility to the company compared to the AZ worker (remember, both are remote).

They don’t! Which is why in this new remote world the applicant in Phoenix has the advantage because they’re able to accept a lower salary because of CoL.

None of this makes any god damn sense in regards to adjusting the pay of people that move but it doesn’t matter in the long run because such practices are still governed by market forces. Facebook can try and predict what someone is willing to accept based on their location and renegotiate based on their available options but it’s not infinite leverage.

People aren't paid by their utility (if that were true, employees at highly profitable companies would be paid a lot more). They are paid the lowest amount that either the market (or other forces - like unions) will bear. A remote worker in Phoenix doesn't have as many options as a remote worker in NYC when it comes to switching jobs a getting a high salary. So the company pays the NYC dev more since they need to pay more in order to retain that person.

I'm absolutely certain that there are some 10x engineers in Bangalore that are getting paid peanuts because they can be exploited and don't have as many options. That's the nature of capitalism and why many see it as an extractive system.

> in Bangalore that are getting paid peanuts because they can be exploited

The thing about Cost of Living is that poor schmuck in Banagalore may well be living like a king off those wages compared to his other options.

I made a pittance in west coast tech terms, but here in Iowa that means I own my house outright, I have a wife that doesn't need to work, and I have three kids.

From what I read on here that is a pipe dream for many of the same west coast tech people.

I'll take Iowa.

People are paid by utility, but it isn't the only factor. You don't pay a line cook to be a surgeon. Utility is obviously the dominant factor.

> A remote worker in Phoenix doesn't have as many options as a remote worker in NYC when it comes to switching jobs a getting a high salary. So the company pays the NYC dev more since they need to pay more in order to retain that person.

So the premise of this is that these people are working remotely... why wouldn't the Phoenix person have the same opportunities to switch jobs as the NYC person if both are able to work remotely? That's kinda rejecting the premise of the scenario.

> Utility is obviously the dominant factor.

Supply and demand is the dominant factor in pricing. Utility is barely quantifiable in most cases. A personal computer has immense utility, a Rolex has very limited utility. The latter is in very short supply and in high demand, that's why its prices are high.

Now let's take a software engineer at Uber versus a nurse at a random hospital. The software engineer is part of a scheme that keeps destroying capital, his utility is negative. The nurse on the other hand may prevent decades of lives lost every day. It's not that hard to become a nurse though - more people are capable and willing to do it, so the supply is large. The cherrypicked software engineer on the other hand, is quite rare.

> why wouldn't the Phoenix person have the same opportunities to switch jobs as the NYC person if both are able to work remotely?

They have the same "fully remote" options, but not the same "onsite" opportunities. If you work remote, of course you're going to want to optimize your cost of living, because you'll be competing with people who will do the job for less money.

Utility will put a cap on whether the business can exist. Employers won't willingly pay above your utility. And if they could get you to work for free they sure would.

The Phoenix person and the NYC person don't have the same opportunities because the huge majority of tech jobs still don't support fully remote positions. So the Phoenix person has all the fully remote jobs (many of which adjust salaries down) and all the local Phoenix business. And the NYC person has all the fully remote jobs and the gazillions of local NYC jobs.

Your employer doesn't know that you'd never want to work for a local NYC company or whatever, so they operate under the assumption that they have tighter competition for your labor.

Some day, if lots and lots and lots of remote work is available, this effect will shrink and that will either pull remote salaries closer together or people in LCOL regions will still be willing to accept lower pay and the HCOL people are in trouble.

> Bangalore that are getting paid peanuts because they can be exploited

Um, that's not what is happening. I can't vouch specifically for Bangalore, but if you can work fully remotely, the savings in taxes and COL are ridiculous - so much, in fact, that it doesn't make /financial/ sense to move to a high COL for anything less than FAANG salaries (and even then, it depends on what you want out of life).

I'm talking about €300-500/day income.

If I were to be optimistic, I'd say that Facebook's employees won't even feel the reduced salary - but SF government and landlords certainly will.

Sure. But you'd be able to take home even more money if they were paying SF salaries. It is a fine arrangement as it stands but the big companies are extracting a greater percentage of your labor since they can afford to pay you less and you will accept less.

In principle, yes. But things are not always so clear cut. In certain European countries, there is a special tax regime that lets you pay very little tax as long as you stay under a specified limit (the highest is, AFAIK, €100k/year and 15% tax).

In such a scenario, you're better off trading a lower salary for more free time (if possible, of course) as a large portion of a higher salary would be eaten up by higher taxes and/or COL (if you had to be relocate).

In essence, you're making less in absolute values but you're /much/ better off in relative terms (say, per hour).

Why is it a surprise? The moment the employee is willing to hire remotely the employer is competing against people willing to make half or less, since they don’t care to live where you decide to live. Hilarious right? Same happens when minimum wage goes up. Imagine it goes up to a livable $40/hr. Now these high school kids are competing with people with college degrees for the same job.

I'm not sure this makes sense. Did I not include these people? Wage as a function of distance, right? I didn't say that everyone gets paid the same. And is it not more advantageous for the employer to be able to select from a larger pool of candidates?

> Imagine it goes up to a livable $40/hr. Now these high school kids are competing with people with college degrees for the same job.

Do they? This doesn't mean that every job that pays under $40/hr (which is pretty high! You must be living in the Bay) becomes $40/hr and jobs higher do not go up as well. But rather now those companies have to compete (you can compete in ways more than wage, especially if it is $40/hr!). High school kids may have to compete with people with college degrees for things like McDonalds, but now an engineering firm like Boeing (who pays less than $40/hr for starting salaries in most locations) has to compete with McDonalds. The competition doesn't work only in one direction.

Of course, I'm sure that there's a upperbound to how well this works though, and I wouldn't be surprised if it was under $80k/yr

> Imagine it goes up to a livable $40/hr.

$40/hr is a high salary for many parts of the US, so I assume your “livable” comment is relative to the Bay Area?

> Imagine it goes up to a livable $40/hr. Now these high school kids are competing with people with college degrees for the same job.

A lot of these predictions seem based on assuming nothing else changes when the minimum wage changes. Realistically you're not going to have college grads applying for highschool-kid jobs, you're going to see college grad jobs paying more.

Ok so it $40 an hour flipping burgers, or $40 an hour writing code. Which would you rather do?

TBH if those were the only available choices, burgers would win. A much easier job.

Is far rather write code for $40 than flip burgers for $100

How long did you flip burgers for? Depending upon the location/business, it means standing on your feet in a hot environment for hours. They've hopefully gotten better, but plastic gloves are also murder on the hands.

Maybe less challenging mentally, but physically way more demanding.

It sounds horrendous. In a reasonable world horrendous jobs like flipping burgers and scrubbing toilets would be far more rewarded than fulfilling jobs like writing code.

My own history of jobs involved delivering f pizzas for a small firm (great, very little pressure, just listen to radio all night), and stacking shelves in a corner shop (I lasted 3 hours)

You literally couldn’t pay me to stack shelves, and I in turn rarely go to shops, I won’t support such a terrible environment.

Flipping burgers and scrubbing toilets can be done by literally anyone. On the other hand, the demand for people who can code like you remains high.

This is the reason why investment bankers make bank. Granted, many of the "signals" are dubious, but the people who can _actually_ do the work of a MD are extremely low.

To answer your thought experiment: salaries aren't dictated by justifications or fairness.

Silicon Valley firms don't pay high salaries because employees have to pay a high cost of living, they pay the high salaries because if they don't, some other company will pay it and the employee will leave.

They pay the salary that they need to get people to come work. The cost of living is an OUTCOME of this calculation, not the input. The CoL is lower in Morgan Hill because people living there have to commute further to get to their jobs, so fewer people want to live there. You can figure out the price people put on commute distance by comparing housing prices based on distance from work sites.

The really interesting thing will be to see how CoLs in the country change when commute distance is no longer a factor in home prices.

I think a new wage fixing agreement between companies within SV is going to happen, just to avoid the situation you have mentioned in your reply.

I don't think they are going to need it, because the actual problem is going to be the opposite; this will drive down developer salaries. Having to be local to Silicon Valley really limited the supply of good developers; only so many people can physically live in the area, so increased demand can't be met with increased supply indefinitely. This drives prices up. If everyone is remote, suddenly the supply of available developers goes way up for these firms. The supply of developers available to them goes way up. Sure, they have to compete with firms everywhere in the world now, but that is fine for them; the global market is not nearly as strong a seller's market for developers as it is in Silicon Valley.

Companies already effectively do this, but frame it as a perk for those who live close. IIRC Facebook and Palantir paid 10k to people who lived within 1 mile of the office.

Companies pay as little as they can get away with. Fair enough. But when their workers are remote, those companies are competing with every other company that's willing to hire remote workers. On the other hand, SWEs are notorious for accepting low pay. So in summary.... who knows how it would shake out?

> SWEs are notorious for accepting low pay

I am simultaneously one of the highest paid people in my peer group, and according to the ranks on HN "low paid".

There is an extreme disconnect between what people in tech seem to think of as normal wages and what the country as a whole (even college educated sectors) considers normal wages.

My comparison is usually nurses who have an actually hard job where people's lives are on the line (and lately their own lives). If someone thinks that software developers are notorious for accepting low pay, I can't imagine what they think of nurses. The worst thing that happens in my day is that I might have to battle bombastic management or know it all whipper snappers in order to get my way :-) (Well, to be fair, as a contractor for a company in the travel industry, my biggest stress is making sure they don't get the impression that paying my invoice is optional...)

Low pay compared to hedge fund managers. Both can (in massive scale organisations) swing massive amounts of money to the company. Neither does it reliably.

I'm not trying to denigrate nurses (a job that would destroy me, emotionally), but there are more of them and they're in less demand (in general).

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

If we were decent negotiators we'd earn more, as a class.

Everything is factored in the real estate price: the weather, the school district, the night life, the ethnic grocery stores, crime rate etc. and last but not least, the opportunity to change to a new job with much higher comp.

Real estate, while not as liquid as stock market, is quite efficient in my opinion.

> Would it be reasonable for them to adjust salaries depending on what city an employee lived in?

Companies pay people less in LCOL areas because the local competing offers they receive are lower and they don't have to pay as much to outbid the competition. Not because they actually care about how much you're paying in rent. If two suburbs are in the same metro area, then they are part of the same local hiring pool so there is no reason to offer different compensation based on the average local rents.

The lawsuits around this are going to be amazing. African American developer has kids and moves to Georgia to be near family; receives steep pay cut compared to white developers who move to Connecticut to do the same.

And how does Facebook decide what the cost of living in your area is, anyway? The more data-driven Facebook makes that calculation, the more delicious the law suit gets. For example, DC is a fairly high cost of living Metro area, but there are some nice suburbs in PG County 30-45 minutes east of the city that are quite affordable. They’re also predominantly African American. Does Facebook set your salary based on living in the DC metro area, or do they drill down further and cut your pay for living in PG County? I can’t wait to see what happens.

And how exactly is that different than the current low salaries in Georgia compared to Connecticut?

Since we pretend there's no class divide in America we've got to use the tools we have to combat economic injustice.

> The lawsuits around this are going to be amazing.

No. They won't. This isn't anything new. GitLab as a company does this. My company does this. US Federal Government does this. It's not controversial. HN is the one making it controversial. YOU are making it controversial by bringing race into it.

If you have clear salary bands ("SWE III makes base 100k to 150k") and clear location bands ("NYC is 35%, Westchester County is 29%, Monroe County is 8%) then it's completely fair.

> And how does Facebook decide what the cost of living in your area is, anyway?

You could use the same scales the US Federal Government releases. You could base it on the average cost of living. Lots of data-points. Every state and local government collects this data for various reasons. Hell, Walmart and other large Grocery Stores most likely do this as well to localize prices properly.

What does your company do if the employee is entirely Nomadic? Officially I live somewhere, but I never go there.

Legal Address? It's a good question. Who knows, with modern technology it could be updated daily.

... I shuttered at that thought.

Your place of domicile (a tax and legal concept) cannot be updated daily.

How frequently can it be updated?

I moved from PA to NM last year. From PA's perspective, PA remains your domicile until you take steps to permanently establish a new residence somewhere else. Other states may or may not take the same position.

Those steps include, but are not limited to: buying/renting property as a primary residence, registering a car, registering to vote.

Should it be updated?

South Dakota lets you establish tax domicile with no state income tax instantly. You need to show a receipt from a hotel or campground that you spent a night in the state. You also get a new driver's license and open a bank account. That's it. What stops me from setting up a remote workstation in SD, logging into work through VPN from there, and living wherever I want? :)

Once the pandemic lessens, I am switching my domicile from California to SD and semi-retiring away from Bay Area. I will have a legal presence and a computer in that area, but I will not live there.

There could be a business opportunity in setting up remote workstations in high rent areas to comply with these requirements.

Multiple states can consider you to be domiciled there, and you are liable for state taxes in each.

There is no constitutional protection that prevents you from having to pay multiple resident state taxes, though in practice, it doesn't happen often. NY is notorious for claiming people are still residents after they have left-one factor is spending any part of 183 days in state, but another is intent and emotional attachment.

Typically when you live in another state for 3 or more months you “establish residency”. Not declaring this properly on your state income taxes is tax evasion.

Lying to your company about residency and tax evasion to receive more money is fraud.

So it sounds like you’re going to have an interesting time either committing fraud or flying back and forth constantly to pull this off?

I bet if you were hired by a company while living in a lower COL city for market rates in that city, and then moved to the Bay area you’d be advocating for getting a COL adjustment to afford Bay area rents.

Considering fraud and tax evasion schemes to avoid the exact same adjustment in the other direction is ridiculous and selfish. If everyone did what you did housing rates would skyrocket in those cities like the Bay area and create even more housing crisis and displacement.

Sounds like masochistic performance art waiting to happen.

Maybe pretend it's not happening, no idea. Societal rules don't seem to work well with people who are more nomadic—the settlers seem to have won

I feel this comment so deeply. I spent all of my late teens and early 20s doing music in the US. I lived in a van or on a bus and only went ‘home’ for a few weeks consecutively at the most, and that was maybe three times a year. The world is viewed in a fundamentally different nature by those who are nomadic, and the rest of society has a very tough time dealing with those nomads.

Yea, I lived in East Africa for a bit and learned a lot about the struggles between the nomadic pastoralists and settled farmers. Also in Europe with the Roma people and their struggles.

I mean, I guess nomadic vs settled is probably a spectrum, with most of us not falling at anywhere near yhe extreme poles. Yet, yes, I feel you.

they should hire you under different contract where you are responsible for your taxes, not the employer, something like freelance contractor, not familiar with US law

lowering salaries because company must adjust your taxes is lame excuse

They’re lowering salary for a different reason.

But you have to tell them what state you have residency so they can withhold income taxes for the right state and not be liable for tax evasion.

You’re conflating two separate things

There's a HUGE difference between paying in a locale based on COL and lowering an existing salary for a remote worker simply because they might have lower COL.

If you relocate at Google or Facebook, or any large company, they will adjust your salary for the new office you move to. If you move from SF to Upstate New York, you need to update your address with HR for tax purposes, and they would most likely adjust your salary under this plan.

I moved from Austin to Seattle and my salary was adjusted up. If I move back it would adjust down (which is weird, because Austin is almost as expensive as Seattle now).

What you’re talking about is different pay for different localities for physical jobs. This practice does have a disparate impact on African Americans. (Part of the large pay gap between African Americans and whites is due to the fact that they disproportionately reside in low cost southern states.) Nonetheless, we accept the practice, partly out of inertia, and partly because of market principles. Companies must pay more to recruit the same level of talent in a place with high cost of living. So long as companies insist on co-located staff, that market economics provides a legitimate justification for salary discrimination.

Extending the principle to remote work removes the comfort of accepted practice. We don’t have preconceived notions of what’s “fair” when it comes to remote work. It also removes the insulation layer of market dynamics. Companies need to pay more for talent physically located in an expensive metro area, just as they need to pay more for rent, etc. But when you remove the rationale of having your workforce all in one place, that also undercuts your rationales for paying different amounts in different locations. By paying more to remote workers who want to live in Connecticut versus Georgia, Facebook is subsidizing the lifestyle choices of some developers. But those lifestyle choices are heavily affected by race. (58% of African Americans live in the south, versus 27% of white Americans. One of the major trends of demographics in the US right now is a reversal of the movement of African Americans from the south to northern cities.) And as a result, that subsidy will have a significant disparate impact based on race. Under Facebook’s policy, you’ll have otherwise similarly situated developers being penalized in racially disparate ways for their individual housing choices.

Moreover, so long as Facebook presumes that developers need o be co-located, Facebook has a legitimate economic reason to locate in San Francisco or Austin. It’s easier to recruit good developers there. Any incidental contribution to disparate impacts on groups that happen not to live in those places yields to the economics. But when you abandon that principle, you’re standing pretty naked. For remote work, what legitimate reason does Facebook have to subsidize certain developers’ consumptive habits? I prefer to live near the water—should Facebook pay me more money as a result?

According to the Supreme Court, this type of "disparate impact" claim would probably not be accepted[1]:

> Additionally, the Court outlined the contours of an important defense to a plaintiff’s prima facie case, namely that “policies are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers.” Businesses must be given “leeway to state and explain the valid interest served by their policies,” and should be able “to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system.”

> Further, the Court cautioned, as it did in Wards Cove and Ricci, that when a defendant offers a legitimate business justification, a plaintiff cannot sustain a disparate-impact claim if it cannot prove “there is ‘an available alternative … practice that has less disparate impact and serves the [entity’s] legitimate needs.’” The Court’s decision appears to create a more lenient standard for defendants than the standard the federal government has proposed, in line with the Court’s holding in Wards Cove.

[1]https://www.scotusblog.com/2015/06/paul-hancock-fha/

This is the relevant point from that article:

> In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations.

> The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.”

Paying more for people physical located in Palo Alto can be justified by a “sound business consideration.” The company isn’t discriminating based on location, per se. It is simply bidding in a labor market. It just so happens that those bids need to be higher to recruit workers for a physical office in San Francisco than elsewhere.

With remote work, that “sound business consideration” disappears. You no longer care whether the person is physical located in San Francisco. So why should the company pay more for such workers? Justifying the policy as “necessary” and “not artificial” becomes more complicated than with in-person work.

Because companies cannot force people to live in cheap COL places so they can pay them less? If the best person for the job lives in SF then the best person for the job lives in SF.

Where is this assumption that equalizing pay across regions is a race to the top, and not to the bottom, coming from anyways?

But the new Facebook policy isn’t merit based (“best person for the job”). If the “best person for the job” happens to want to live in Atlanta, she will get paid less than the marginal candidate who happens to live in San Francisco.

You seem to be overlooking why geographic discrimination in salaries exists in the first place. As tzs points out in a sibling comment, it’s because when Google has an office in Mountain View, it doesn’t just care about hiring the Nth-percentile employee. It has to pay enough to hire the Nth-percentile employee who wants to live in Mountain View for that salary. Where the worker is located matters because Google has decided that it’s office should be in Mountain View, and further that it wants to have its teams under one roof. That economic justification doesn’t exist for remote workers.

You've convinced me that there will be lawsuits on this issue. But do you think there will be lawsuits where the plaintiffs win (and not just an isolated win here and there, but mass wins that force large policy changes by employers)? That still seems fairly far fetched to me.

Never heard of a company punitively adjusting COL downward without being explicitly in contract, like with US Fedgov. Finance had people leave NY all the time for Midwestern and Southern states with the same company keeping their NYC paychecks.

it's extremely common (I did some consulting and offices had salary multipliers based on high/mid/low-cost locations). I've been quite surprised at the reaction from HN on the topic

Common, but something in initial employment agreement. This sounds like it is being forced on employees. If so, thus my reticence to seeing this practice as acceptable. If not, my mistake.

It’s likely these employees’ initial employment agreement was to work on-site in the Bay Area office.

If they want to move away from the Bay Area and work 100% remote, they’re being offered that option - that’s a change in the contract itself, in their favor, which they don’t have to take if they don’t want to.

Maybe so. All depends on the agreements at this point.

Disclaimer: I'm a FB employee

What's being forced upon me? If I continue to work as before, nothing changes. Working remote full time wasn't an option in my initial employment agreement either, so it does not seem like that agreement applies to this situation.

That's my question ultimately. What the reporting sounds like is if you work from outside SV, even if fully remote, you are subject to an unagreed-upon wage reduction. Simply because a pandemic has forced employers to bend doesn't mean employees are forced to do so.

That said, I recognize the difference between ideal and practical reality of the situation. Employees at tech firms typically have little individual negotiation power, but an employment agreement typically can't be amended at the whim of one party. I'm not saying you see it that way, just an outside observer here.

There are no initial employee agreement terms being amended and I'm a bit confused on how it could be interpreted that way. The initial agreement still holds, but FB is extending an additional option that was not offered originally for the employee to change their location to work fully remote, at which point he/she would be subject to the wage multiplier based on market.

If you have to go into the office to work, and you get sick with the coronavirus, then you should sue Facebook.

And if you die, then your spouse should file a wrongful death lawsuit against Facebook.

Why? Because all that could have been avoided if Facebook allowed you to work remotely.

You can also claim that the patterns in the central air conditioning circulation, is what caused you to get sick with the virus.

It’s fascinating that the country is forcing people to go back to work, when the crisis is not yet over. In fact, it’s even more dangerous now, than it ever was, with the super high infection rate count.

It's not being forced on anyone. People are free to continue working in SV and presumably receive the same salary they were before.

If they decide to move elsewhere that's a substantial and meaningful change from the agreement they entered into for the job. Of course their compensation will change.

Facebook didn't hire engineers to work remotely.

Google adjust salary based on location. I moved from the Bay Area to the Seattle area, and took a small paycut. And it's not directly COL, they are paying 'market rate' (or, some multiplier based off that) for the area.

I knew I would before I moved (still worth it).

I've not only heard it, I've been told.

"If you relocate from our San Jose office to our Austin office, there will be a compensation adjustment due to COL and prevailing market rate."

I don't think that's unreasonable.

I'm sure they make exceptions for those employees who they want to retain at all cost.

The employer deciding what "the market" is to set "market rate" to a conveniently lower number isn't reasonable. If you're hiring remote-first, you're not competing in a local market.

The employer deciding what they're willing to pay employees is eminently reasonable. Most of these companies are NOT going remote first, they're just _allowing_ remote work.

No, a dialog or a negotiation is reasonable. Deciding things for both parties is not reasonable.

What's different here is presumably the scale the policy is being applied at, which creates the likelihood that significant groups of employees will be able to demonstrate disparate impact. For it to be a problem, there need to be enough remote employees in "favored" and "disfavored" {location,compensation} buckets to make a case. Gitlab is presumably not there yet.

You think the US government isn't "at the scale" of Facebook?

USG pays flat rate globally. They then plus up a COLA allowance based on high-cost areas, special circumstances, etc. But the base rate is a flat rate for a given position. You can pay 'less extra', but not 'less', generally. Which I'm sure is what FB and others will technically do.

Parent comment started:

>What's different here is presumably the scale the policy is being applied at

Suggesting that FB is somehow going to apply any policy to its employees that is at a larger scale than the US government is a bit ridiculous.

Yes, I agree that's what FB will do.

BAH is based on your duty location

For Active Duty - yes it is based on duty location zip code, because they assume you will move near the base that you work at.

For National Guard - it is based on Home of Record zip code. Many National Guard members travel >100 miles to their assigned Armory.

But that's an adjustment / extra, not a change to your pay as an O-3 or E-5 or GS-12 or whatever.

Does it really work on a company level like that? In the industry as a whole the scale should be enough.

> US Federal Government does this.

US FedGov location pay is based on federally-dictated work site, not where the employee resides. Adjusting salaries based on employer location demands is non-controversial, and based on different job requirements in

Paying people less because they live where lots of black people live (and race and other protected classes in US employment law do correlate with cost of living), when the employer requirements do not differ on whit, is not the same thing.

Yeah. It's based on work site, but they define down to the county what the location adjustment is. But the same thing could be used for remote workers. I strongly assume the remote work positions that exist would pay based on the county where the worker resides.

If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.

https://www.federalpay.org/gs/locality

> But the same thing could be used for remote workers.

It wouldn't be the same thing if it wasn't based on job-required worksite. They don't pay you based on where you live (which is quite often a different county than the work site), but where you are assigned to work. If you have no assigned worksite, as is the case with remote work, there'd be no basis for the adjustment.

> If these large tech companies just used the US GS Scale's locality adjustment, it would be super easy and non-controversial.

Super easy, yes.

Non-controversial, no.

Sure. If you're working from home your work site is where you live.

> Sure. If you're working from home your work site is where you live.

Unless your employer assigns your residence, it's not a difference in job duty.you are being paid for, so is not analogous to being paid for employer-assogned job site when analyzing disparate impact.

Exactly. It's a painful reality to accept for those who do not know it's an accepted practice.

So is this the salary and redlining counterpart of the BoJack episode where they finally decide how to fix the gun and drug problem in America?

It's not actually based on CoL... it is based on comparable salaries in the area (which of course is highly correlated with cost of living). The distinction is important, though; they pay the salary that gets a worker to stay and not go to another company that will hire them.

Companies, and many agencies in the federal government, already do this..

As long as the same policy would equally apply to all races, there is nothing wrong with making COL or salary adjustments based on where an employee moves.

It's not like these companies are dumb. They'll factor the diversity coordinate into their equation.

The rational way to do this would be for Facebook to take into account COL when setting salary for non-remote work, and to not take it into account when setting salary for remote work.

Why? Because if they are specifically trying to fill a spot in Menlo Park they are going to have to pay enough to attract people who live within commuting distance of Menlo Park. If they are trying to fill a Seattle spot they need to pay enough to attract Seattle workers. And so on.

If they are trying to fill a remote spot then they should be largely indifferent to where that person lives. For remote work they only need to set pay high enough to get the number of people they want from the entire country.

If they set remote pay at a level that makes them attractive to people in Georgia but not to people in Connecticut, and at that level they can find all the remote workers they want, why should they care that Connecticut engineers aren't applying for remote Facebook jobs?

Yes this makes total sense to me. The pay bump in SF is to get sufficient good people in SF, which the company cares about because it has an office there and needs local people. That rationale evaporates for remote work.

It would be interesting if they also figured in the cost of providing office space, food, etc when recomputing remote workers’ pay.

The rule of thumb I’ve heard is that workers cost about 2x their salaries, with the additional money going to HR, taxes, IT, morale budgets and facilities. Facilities is the biggest of those costs.

(This completely ignores stock based compensation.)

> If they set remote pay at a level that makes them attractive to people in Georgia but not to people in Connecticut, and at that level they can find all the remote workers they want, why should they care that Connecticut engineers aren't applying for remote Facebook jobs?

Presumably because there are not enough people in Georgia alone who meet their hiring bar to fulfill their staffing needs. So they also need to hire people in HCOL areas with better competing offers and more leverage to demand more money from them.

> Presumably because there are not enough people in Georgia alone who meet their hiring bar to fulfill their staffing needs

I kind of doubt this. Many of the people I went to Georgia Tech with immediately moved to the Bay Area for CS jobs. I'm pretty sure that school alone can supply quite a bit.

Quite a bit, yes. Maybe enough to supply facebok with junior engineers, but not that's one (and the smallest!) major tech company.

Then they need to raise the amount enough to attract more people. They can pay different people different amounts, but the amount should be based on what they need to attract them and not take location into account. Eg if the higher amount raises the number of applicants in the lower cost of living area too, then they shouldn’t go “oh, but you’re in the lower cost area so your offer is lower”

Ie raising the offer raises the applicants, where those applicants are should not matter.

> They can pay different people different amounts, but the amount should be based on what they need to attract them and not take location into account.

But what if you need to pay someone in topeka less to attract them than someone in NYC?

Specifically, if we think about the idea of a market, and assume some jobs won't be remote, the dev in NYC will have a larger market (remote jobs + onsite jobs in NYC) than the topeka dev (remote jobs + onsite jobs in topeka). This is actually the same way things are now.

What is so unethical about a company choosing to pay you (in the case of facebook, well above) market rate in the market you choose to reside in?

The only thing I’m arguing is that if my location doesn’t matter to the job, then the location I’m in shouldn’t matter to the salary equation: only what you’re willing to pay for my skills and what I’m willing to accept. Tax or other legal issues aside, once I’m employed remotely, it shouldn’t matter to you if I then decide to leave my expensive NYC apartment to live for a fraction of the cost in some rural town (assuming I have adequate internet etc). The employer shouldn’t then say well your cost of living is now lower, so we will pay lower. I’m still the same person providing the same value.

If the company wants to save money, then why were they willing to pay more just because I lived in a higher cost of living area, rather than looking for people in the lower cost of living areas to begin with?

Employers pay more when there are more competitors in the same labor market paying more. Right now that depends on where you live because most positions are not remote and candidates already relocated looking for valuable experience and better offers. If that changes, then Bay Area and New York offers might no longer be much higher (maybe they won't even cover the cost of living here).

Yes. And?

I mean, sure, that sucks for people in the local labour market, but if you cannot find work that covers your cost of living, then you either have to change your work or lower your cost of living. This is the same in any type of work, in any location. For example, you might make enough money running a small town bakery, then big office opens up, local cost of living rises (like it has in San Francisco, for example) and suddenly you can’t sustain yourself anymore. You either have to do something else or move somewhere else.

My point isn’t that things don’t have an effect, just that companies want to embrace remote, that location shouldn’t be coupled to compensation, outside of implicitly due to locations effect on what an employee would accept. The employee can then make a decision on their own worth and values and choose whether they would rather do their location-non-specific work from a high cost place (that presumably has other benefits[1]) or if they would rather move to a low cost place. This shouldn’t matter to the company and shouldn’t have any impact on how they value the employee.

[1] If there is no benefit to living in a high cost location, for a given individual, then its not exactly smart ir prudent for them to stay there and keeping the prices high (due to higher demand) isn’t benefiting anyone. (Proximity to friends and family is, of course, part of the equation). I can’t expect my career of choice to pay me more just because of my personal choices or preferences, though. Why should one employee subsidize another employees lifestyle?

> outside of implicitly due to locations effect on what an employee would accept.

This is exactly what is happening. Facebook knows that people in certain markets are willing to accept less. So they offer less.

> This shouldn’t matter to the company and shouldn’t have any impact on how they value the employee.

Your mistake is thinking that compensation is solely based on how much they value the employee. Companies only need to pay enough to outbid the competition, and the amount of competition for workers is a lot higher some places than others.

Think of it in basic supply and demand terms - the amount that a company "values" an employee only reflects the demand curve; the other half the equation is the supply curve, i.e. how much a company has to pay to beat out the competition and persuade employees to work for them because all the other options are worse. The supply curves are shifted right in LCOL areas, which drives the equilibrium prices down.

Honestly my whole life I have basically been rolling my eyes whenever people complain of discrimination. "Why would a company pay more for less? They'd be eaten alive by competitors that don't". But here we have the whole industry saying they are gonna pay people less based on nothing more than living in black neighbourhoods. And gloating about how people don't have negotiating leverage.

It's making me rethink a lot of things.

I do the same type of eye roll and I think it still applies here. Unless "the whole industry" create a salary cartel, the free market will adjust for this salary imbalance quickly.

If there's a guy living in a black neighborhood that does the same job as a guy from a white neighborhood but for less, who would you hire? So will everyone, and the salaries will eventually match.

This is even more true in a world of mostly-remote workers where social interactions are reduced.

Nah. Pay is, and will continue to be, based on market rate. If they offer you 150k in Georgia and that's near top of market for your skill level, even though if you were in SV you'd make 250k, then you're still being paid well. No discrimination. If they offered a black person 150k and a white person 250k for the same job in the same place, that's discrimination.

When I moved from SF bay area to Austin, my employer didn't lower my salary, but for a few years my yearly increases were small compared to my performance review until my pay grade was right for my pay grade and location combination.

This was a nice way to do it because my salary has always been monotonically increasing, and I wasn't offended that my increases were small for a few years because I knew why it was happening.

This right here is the way to deal with the problem. Lowering a salary should only happen if someone is a fuckup or reduces the amount of work they have to do. Doing it over time like this is super classy.

I don't know, if the same job gets paid less in Austin then it's not really fair for someone who transfers from SF to Austin to make more than someone who was just in Austin all long. If someone moved from Austin to SF you'd just pay them less than a new hire in SF?

At Google they just openly adjust your salary if you move between cities; move from NYC to Atlanta and you'll take a bit hit, move back for the reciprocal instant raise.

This sounds great but I wonder how much of that was employer's discretion? I imagine your work was that valuable but perhaps a less productive engineer might get a different "package".

Regardless of the rational and pragmatic reasons behind salary adjustments for cost of location adjustments, a double digit X% cut would be very demotivating for most people psychologically.

People seem to be missing that this is entirely voluntary. Facebook isn't forcing people to accept a pay cut, just saying that if you choose to move then your salary will be cut.

This has been SOP at big tech companies for years. If you choose to move to a cheaper location, your salary will be adjusted to the new market rate.

I know plenty of people who have gone through this and nobody felt demotivated. They all chose to move and were well aware of the salary cut when they made that choice.

Not just big tech companies,it's SOP at most companies in pretty much all industries.

Very very few people would not be expecting a location adjustment to their salary with a major relocation. Especially when that relocation is entirely for the benefit of the employee, not the employer.

This is what everyone I know does but that's because they're all smaller companies and each individual is pretty valuable. At Facebook, each individual is just a statistic at the margin. They cease to operate as individuals and more as a market for lots of labour.

That can't be helped. If I had a 100k size org, I wouldn't hesitate to set (overall) compensation targets at regional top prices with instant adjustment.

Well a Swiss court just ruled that companies need to compensate (including part of the rent) employees if they are home officed. [1]

Companies taking advantage of this and thinking they can save money should think again.

[1] https://www.google.com/amp/s/www.nzz.ch/amp/schweiz/arbeitge...

That is fair. If I'm using my personal car for work, I'm reimbursed. Same thing should be done for business use at home.

My increase in electricity and internet usage should be covered.

In practice this can't really be enforced. Say you were making $200k but then a law was passed that companies have to reimburse you for 20k of "home office expenses" per year. Guess what, now your salary is 180k + the reimbursement!

Oh, you're saying you could pass a law against that too? OK, then what happens to new hires. They're gonna get 180k. You can't really stop that.

At the end of the day, salaries will be set by the market. Companies are price takers just like employees.

Take care not to conflate the "market" which applies when it benefits me over everyone else, with "fairness" which applies whenever it benefits me over everyot else.

Take care not to conflate the "market" which applies when it benefits me over everyone else, with "fairness" which applies whenever it benefits me over everyone else.

DeÄMPed: https://www.nzz.ch/schweiz/arbeitgeber-muessen-einen-teil-de...

In French: https://www.tdg.ch/teletravail-les-employeurs-doivent-dedomm...

Not "just ruled", the decision is from April 2019!

Disclaimer: FB employee.

The company claimed that they don't see this necessarily as a cost-saving measure because they plan on providing for home office equipment for permanent remote workers, kind of like how employees going to the office have monitors and keyboards provided for them.

Isn't office rent far more expensive than equipment?

Home office equipment is only a fraction of the company's potential savings from office rent or other operational costs. Some of those costs get passed on to the employee, like electricity or heating costs.

Seems like the Uberization of white-collar workers, shifting costs to employees.

And if not shifting those costs, then seems like a windfall for accountants to deal with all the tax implications.

Or, an opportunity for a new wave of politicians to figure out how to implement tax and labor laws in such an environment.

WFH might be simpler for tax purposes since you don't have imputed income from free lunches and such.

Oh, interesting. Didn't think about that.

That’s pretty funny. I have an amazing home office setup, and even all that high-end kit cost a very small fraction of an FB engineer yearly salary. Are they planning on burning the delta by throwing in high-end telepresence hardware, or something?

I don't know if it's high end, but every FTE I know got a Portal.

Pardon my ignorance, but what is a Portal?

A video-call device they make: https://portal.facebook.com/

I was about to ask the same question. I didn't even know this product existed!

a whitelabled version of this https://en.wikipedia.org/wiki/Telescreen

The top end afaik is the Cisco telepresence gear used in eg the White House. There’s a spectrum in between, but $280 is definitely near the lower end. Maybe portal is really good, though?

But honestly, it could be the best teleconferencing gear, I’d never put a camera from FB in my home.

At $179 that's a cheap product.

The average dev at Facebook is paid like $150k. If they implement this then some engineers will lose $50k per year.

$179. Lol

If Facebook gave each dev a $15,000 computer setup then most will still be royally fucked by this policy.

To be honest: all of the office equipment is a mere fraction of a month's of an engineer salary, providing the basic tools for your workers that is less than a month's salary is nowhere a "cost-saving measure", even less when you are saving on real estate...

It is generally-expected behavior for an automaker to shift production to the cheapest labor market. Well, maybe not the absolute cheapest. Cost of goods transport, e.t.c. also factor in. But it doesn't surprise anyone for manufacturers to open factories in locations that lower their costs. It's an obvious thing to do.

So it has always baffled me that tech companies do the exact opposite. They motivate the most skilled people to leave low-cost areas and move to the most expensive. They pile them in higher and higher and keep driving their own labor costs through the roof. And VCs exacerbate the problem by refusing to fund anything in less expensive locations.

It's easy to dismiss this as irrational. But is it really? Are there benefits to this that are so huge they outweigh the costs?

If you could pay $10,000,000 to move 1000 devs to Kingman, AZ, then cut their avg salary from $250,000 to $150,000, why wouldn't you do that? What is the downside to saving $90,000,000 after moving expenses in the first year alone?

The obvious first argument is reduction in the standard of living would cause the talented to refuse. I'm sensitive to this, but also skeptical. People making 150 in Kingman would improve their SOL.

I could be wrong, but I think there are more important factors. I think there is too much money at stake for these employers to have not thought it through. When a common behavior looks insanely irrational, it is more likely that you haven't seen all the variables.

Perhaps the location is only a side effect, while the true reason is the low supply of qualified coders. Why do corp lawyers command $400-600/hour? Why not to just hire a lawyer in India for $40/hour? Why not to hire a cheap accountant in Phillipines? Ah, right, the cheap options cost more in the long run and those who are competent have migrated to the US and now command the same 600/hour.

Companies that require skilled labour don’t move to places with cheap labour. They move to places with abundant skilled labour that’s available at a reasonable cost. Or, they spend money training and equipping the available labour. There’s no way around it.

If you think building cars is unskilled labour I can only assume you've not owned anything newer than a Leyland P76, and managed to miss the whole "Japanese car makers eating the US and British industries" thing.

Auto workers have a skilled tradesman classification and other classifications and most aren't skilled tradesmen. They still perform pretty complex tasks. It's just a term, like how in insurance contracts you'll read "Act of God". That doesn't mean that State Farm is a theistic organization that believes that supernatural beings are imposing earthquakes upon us.

Automakers move manufacturing to cheap labor markets, pretty sure HQ and engineering are still in relatively prestigious cities.

> So it has always baffled me that tech companies do the exact opposite.

The primary inputs to the tech industry, especially but not exclusively consumer software industry, are culture, trends, and of course software engineering labor. All of these predominantly generated by cities, and among those, the big cities of the world.

The inputs to auto manufacture are materials, skilled manual labor, and schematics. The schematics like software, are a product of culture, and trends, and engineering research, all of which are cultural objects predominantly produced by major urban hubs. That is why auto manufacturers still design their cars in cities.

That doesn't mean that software can't be developed remotely or in cheaper COL places. But its most likely be to be designed in proximity to major cultural centers.

By that reasoning, the biggest tech centers should be...

1. Tokyo

2. Delhi

3. Shanghai

4. São Paulo

5. Mexico City

6. Cairo

11. New York City

17. Manila

23. Los Angeles

San Francisco would rank #16 in the USA, just behind Columbus, OH, and just ahead of Seattle.

So spend the $10,000,000 to relocate 1000 devs to #5 Phoenix (200 miles from Kingman).

Comparing the direct population of Columbus OH to SF is silly; it ignores the huge amount of the surrounding area, as SF proper is rather small. Some quick Googling says the Columbus MSA is ~2 M people, and the SF+San Jose MSAs are 5-7 M people.

Some quick Googling says that Phoenix metro is about 5M people.

Meanwhile, the bay area is the #1 highest COL in the continental U.S. Phoenix is ~#29.

If the argument is that tech requires a big city, I think Phoenix qualifies. If this is a hangup for you, consider Philadelphia: 5-7 M people, #21 COL.

It is obvious to me that population size is not why tech giants gravitate to SF or Seattle. (I'm confident that the high COL is also not the reason.)

Tucking 1000 employees into Houston and 1000 into Charlotte and 1000 into Toronto, then saving $200,000,000 per year seems very attractive to me. And if relocating 3000 makes sense, why not 10000?

There's obviously enough good reasons that they haven't done it. But from my seat in the balcony of the ignorant it seems awfully strange from an industry that prides itself on disrupting stale thinking.

Part of it has to do with capital, but a fair portion is due to network effects.

As an example; in Boston, if you are looking to setup a Biotech shop you need to throw a rock down the street and you'll hit someone involved in the industry. In Louisville, KY? Forget about it, yes there are some folks who are in the field but as a whole?

> Tucking 1000 employees into Houston and 1000 into Charlotte and 1000 into Toronto, then saving $200,000,000 per year seems very attractive to me. And if relocating 3000 makes sense, why not 10000?

There are plenty of companies in the tech industry who already have done this - how many times have you heard about someone told by their employer that they will have to relocate to X and take a pay cut, or lose their job?

These are, however, companies whose M.O. is cutting costs to the bare minimum to increase margins. You can probably think of many that fit this model. This nearly always means they are no longer focused on growth or product innovation.

Even growth-focused companies have already moved a most of their operational and support to lower cost-of-labor areas, well before COVID19. But very few tech companies have their creative functions in those areas.

It's not just a big city. Look where the San Jose and SF metro areas fall on this list: https://wallethub.com/edu/e/most-and-least-educated-cities/6...

It is not just quantity of population, but characteristics of the population.

No, because you're missing out on that the specific culture matters. Cities produce culture in a certain sense, but they don't all produce the same culture.

There's a reason that the major tech hubs in the US are liberal cities, and more conservative ones generally don't have a strong tech sector.

> There's a reason that the major tech hubs in the US are liberal cities...

Because the owners and operators of the companies in question are usually left of center (American spectrum)?

That's sort of a subset of the real answer: the in-demand talent that the companies need so much of are usually left of center, and relatedly appreciate some things that are more common/better in left-er areas: public transport, decent public universities, support for biking/walkability, friendliness to cultural/ethnic diversity, friendliness to LGBT people, stronger social safety net.

There are things that liberal areas are worse at, of course: housing costs are usually higher, they're not as accommodating to religion, taxes are higher, some regulations can be stifling. But most techies are less concerned with these latter things than the former.

Exactly, culture matters a great degree for creative work. If there were a big untapped reservoir of cultural input for tech firms being underutilized, it would be invested in. You see this a bit in secondary tech hubs like Boulder or Austin, which by dint of their history have some of whatever culture and skillsets the tech industry needs.

Big cities and metropolitan areas are generators of their flavor of culture, and that influences the kind of work objects that the local labor pool can produce.

Many of the cities on GP's list are actually major tech hubs (Tokyo, Sao Paulo, NYC, LA), and many of the other cities (Cairo, Mexico City, LA) are major creative centers for other industries especially media/entertainment industries for their respective spheres of orbit.

> The obvious first argument is reduction in the standard of living would cause the talented to refuse. I'm sensitive to this, but also skeptical. People making 150 in Kingman would improve their SOL.

There are two problems with your reasoning here:

1. What counts as standard of living or quality of life varies according to the individual.

For example, the bay area has excellent weather, a ton of ethnic/cultural diversity, very solid restaurant scene, lots of interesting nature nearby to explore, the area around SF has passable public transit, some bits have decent biking/walkability, and there's excellent options for international travel. Never heard of Kingman, but based on it being in Arizona and cheap, it's probably substantially worse on all those metrics.

Sure, you'll be much more easily able to afford a nice big house in a good school district, and for some people that's of paramount importance. But not everyone; some people value the things I listed above more, and don't mind living in an apartment.

2. You also have to think about it from a long-term perspective. If you settle down in the bay area, yeah the housing situation is awful, but you don't have to worry too much about your particular company going under or treating you like garbage one day, because there are a ton of other tech companies you could switch to.

If you move to a random non-techie city where your current employer is the only employer of note, then that means settling down there puts you in an awkward situation: you're now tied down to them. Switching companies may well mean moving again, which could be awkward if you've put down roots.

Coming from a country(Poland) that may well be treated as one large outsourcing company (with the notable exception of CDPR and its whopping 1200 employees) here's my prediction on how this is going to play out:

Salaries of remote employees will initially be made much lower according to some woefully inaccurate estimate of cost of living, but from that point on they will increase at a considerably faster rate than normal.

Within a decade they will stabilise at a visibly lower than SV, yet still high level representing the true difference in cost of living - or actually - "cost of deciding not to live in SV".

Eastern Europe experienced an amazing advance in IT compensations when the west figured out that the software engineers there are no worse than their local counterparts.

In the case of SV's surroundings it's obvious that the engineers are talented, so I believe this process should be starting just now.

Overall it's not that bad, because with time any incentive to move back to the high cost of living area fades.

You won't be driving Teslas to work(chiefly because you won't be driving), but you'll enjoy a standard of living higher than a person employed in a local company, and that is nothing to sneer at.

SV people are used to being able to afford a model S. Going to european level salaries (not being able to afford even a model 3) is going to be somewhat of a shock.

This makes sense in the hiring process, but once you've hired someone, it's a super dick move to lower their salary in spite of their performance. Seems like the sort of decision a robot would make.

This is consistent with what major tech companies do today when an employee relocates (or are simply hired in a less pricey region).

Whether or not you agree that employees should be paid differently depending on cost of living where they reside, it isn't new.

This sort of scaling is simply a (rather flimsy) cover for the natural consequences of moving to remote work. If employees in the large metros have to start competing with workers from everywhere else, the salaries are going to start falling. A worker in rural Mississippi is going to expect a much lower salary than an equivalently skilled worker in Palo Alto, and a worker in Manila would expect even less again. Remote work puts significant downward pressure on salaries. This is simply an attempt to offset that. But if you think a hiring manager faced with having to choose between hiring somebody on a big metro salary vs a small rural one is going to be completely uninfluenced, then I’ve got news for you...

honestly as a front end dev, I don’t think what I do is that difficult and I’m overpaid. I feel a little nervous that with remote work I won’t be overpaid in the future

Jobs aren’t paid according to how difficult they are, they’re paid by supply and demand. Employers want to pay as little as possible, but they have to compete with other companies to hire staff from the finite labor pool. Employees want to be paid as much as possible, but have to compete with each other for the finite number of positions available with employers. Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, especially if they’re competing with candidates willing to take a much lower salary due to living in a much cheaper place.

> Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down,

Remote works also means that for every desirable candidate, employers will have more competing employers to compete with, which will drive prices up.

What it really means is that both sides of the market will be larger and less segmented, meaning (1) there will be less opportunity for localized shortages and surpluses driving radically high or depressed salaries, and (2) the law of one price will be more relevant to labor prices for the jobs where remote work is normalized.

But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. Especially where candidates in developed countries end up competing with candidates in developing countries. It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.

> But you would expect the new one price to favor low cost of living candidates over high cost of living candidates.

I'd expect it to provide a greater surplus to lower-expenses candidates, as any common price does. That's not really favoring lower CoL.

> It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.

Yes, for work that the skills required can easily be sourced anywhere, remote work is going to lead to natural price level much lower than the prices in the highest price segment of geographical segregate markets.

OTOH, where skills demanded are rare and not widely available, normalization of remote work just means its easier for more employers to join the bidding on that restricted set of employees with low transaction costs. So, for commodity labor it drives wages down to the lowest common denominator; for the most elite labor it drives wages up.

Like neoliberals free trade itself, it exacerbates inequalities.

What I'm interested in is that it's quite difficult today to find out how much you would be paid when you relocate. You need to jump through a lot of hoops to get the move approved in principle before you find out your new compensation. With this new system it should theoretically be fine to relocate anywhere, so if it is then you'd want to find out how much each area pays before you decide to move. Which means suddenly you know that guy who chose to go live in downtown SF is getting paid 1.4x more than you for the same job. The same is true today obviously, most big offices are in different areas and have different pay scales, but it's generally not as well known by the employees what those scales are.

What's the alternative if you're going to scale salary based on location while hiring? If you only scale while hiring, you'll encourage people to "move" to Silicon Valley for a month or two, then "move" back to their original location. There would be an enormous financial incentive for that behavior.

This happens where I work now, and only one person I know has done the Jump-ship thing and moved to a rural area.

It's easy to say "move to the bay, get a job with Facebook, move out" but getting a job with Facebook isn't easy, and moving is a ton of work. It's kinda like a problem that I really don't think would exist on a large scale. If the employee is worth X in the big city, they're worth X in the small city too, unless they were a shitty employee to begin with. In the end, the right people make the company, and if you're going to quibble over 10k of their salary, they should probably go somewhere else.

Then it seems the factor here is being close to the office. I can get this benefit. So why not base it on distance to the office? Within 2 hours? No pay change. 6-12 hrs and in the same timezone? Small pay decrease. Need a flight to get to work? Bigger decrease. And adjust your decrease on how important it is that you be physically present/in the same timezone. If you never need to be in the office, no change. If once a week, big change. While there's still issues with this, at least it is recognizing the aspect that there is benefit to being in the office (though it is not always needed).

So the employer punishes people that cannot afford to live close to the office? And on top of that, if they need to travel to conduct business, their pay is decreased? If I understand this right, it seems like a horrible idea, and I would not want to work at a place like that at all. If the company needs to hire talent that lives far away, why should they be punished?

I don't think you're getting it right.

> So the employer punishes people that cannot afford to live close to the office?

This already happens. If you aren't local, you can't even get the job.

> if they need to travel to conduct business, their pay is decreased?

Yes and no. If you're talking "I need you to go to China to meet with investors" no, if you're talking "we're having an all hands meeting on the first Monday of each month" then yes, but the employer is paying for your airfare and lodging as well.

> If the company __needs__ to hire talent that lives far away, why should they be punished?

Needs? Who said that? They just need employees. I'm talking about how much they need them in the office. If you don't need them in the office at all, then no pay differentials. But if you do need them in the office, well obviously there's different utility for that employee and should pay not reflect utility, as opposed to locality?

I mentioned in another thread the following scenario. Office in SF, one remote worker in Phoenix, another in NYC. How does the one in NYC have more utility than the one in AZ? (which is how pay works under current remote schemes) I'd argue it is easier/cheaper to get the AZ employee to the office. The AZ employee also shares the same time zone half the year and is only an hour off the rest of the year. How is that fair? So why not make it a function of distance and how much you are needed in the office rather than where you live?

Is it also a dick move to raise someone's salary if they relocate to a more expensive location but stay in the same role? (This is super common with international transfers, for example)

Fine by me. All I'm really saying here is that if Mark Zuckerberg moved to Topika, they wouldn't lower his salary.

Zuck pulls a salary $1. His "compensation" comes in the form of stock that he already owns increasing in value.

executive compensation is not handled the same as rank and file vanilla labor compensation - which SWEs are, despite (seemingly, most of) their world views to the contrary.

They would if he had a salary. Dorsey got in trouble with the Twitter board when he announced his plan to move to Africa, although he also doesn't have any direct compensation to cut.

but... you can see people gaming it though

Claiming residence in SF or NYC during the hiring process, then starting working somewhere else...

The best way about this is for FB to split the difference. Eg. if your average tc is 300k in SF, and it is 200k in North Carolina, if you decide to move there, you will be slotted down to something in between so it becomes a win win.

It's rudimentary to see where employees log in from.

> Claiming residence in SF or NYC during the hiring process, then starting working somewhere else...

It would be a bit of a cat and mouse game. Companies can trace where you are working from VPN logins. I suppose you could VPN through San Francisco then VPN into your corporation’s network, but they probably monitor for use of common VPN providers. Plus during your meetings, etc, you coworkers would notice if you moved.

Whatever solution you use for your legal address could also provide a dedicated VPN and even mail scanning/forwarding. For example, renting a shared room in an apartment with 9 other roommates (one or two who live there full time), and use the premise Internet connection for a VPN server with a nice clean residential IP. Even more practical if there is an option to stay overnight occasionally, and your full-size residence is only several hours drive away. I can even see these type of arrangements arising naturally when roommates move out. Watch your MTU though!

One would imagine they would want your regular dev to be in cheaper locations (same TZ perhaps) and only very good dev in higher cost locations.

The land market cost moves on this could be huge if many companies do this. IMHO it could be bigger than any effect UBI might have had, as typically UBI would see lower earners flee high cost to new "marginal" areas with their UBI income. In this case it's mid to high earners who are suddenly able to flee the nest, which I feel could have a larger impact on land costs. Very interesting times.

You pretty much have to do this if you want to maintain different salaries in different geographic reasons. Otherwise people would be highly incentivized to move to SF/NYC for 6 months to get hired then move back to their cheap COL permanent location.

I feel someone is setting up a company that provides a virtual location in SV for a small fee, but you really live say in Vermont.

Lying to your employer definitely sounds like a good plan. I'm sure that will work out well for the people that try it!

Personally I'd rather be paid less and avoid the stress of getting found out, plus it's not ethical. However life has shown me many people who would not share this perspective.

Honestly, people working out of the main office for their first 6mo-1y would probably a really advantageous scenario for all involved. The first year is when learning tools and culture as well as developing relationships is most crucial. I would say someone moving from in-office to remote has a big advantage over someone getting hired remote.

True. But is there that much of a difference between "working from home in Palo Alto vs working from home in Boise"?

Probably not.

In some countries (at least in The Netherlands), it's also plain illegal to lower one's salary based on just location. In fact, over here lowering salary in general is difficult to do. But this being the US, I suspect it won't be much of an issue for Facebook.

In practice it's also applied in Europe. When an employee requests a relocation it's a new contract anyway, so the new salary is up for negotiation.

Then again, nearly all tech jobs are in the randstad metropolitan area, so there is really only one locale anyway.

It isn't a dick move. Your salary isn't just determined by your performance. It's also partly determined by your cost of living.

Salary drops won't happen based solely off the cost of living. For example, based purely off the cost of living, you could move to a rural city in Iowa and only have a cost of living change in the $30 - $40k range (average SF rent being $3,700, high end Iowa rent being around $1k range). But your actual salary change will be in the $50-$100k range (based off stated numbers in similar articles).

yes, during hiring process for on site jobs based on local competition among employers and employees

if you are not competing locally, but with everyone everywhere salaries based on location become meaningless and only thing which counts should be productivity, why should be anyone having same productivity punished for being frugal instead wasting money?

by your logic they should go through your list of expenses, someone who prefer to buy Tesla over ford should get higher salary, someone who prefer to spend vacation in Europe instead of US should have higher salary, this is pretty insane discriminatory logic

When you sign an employment agreement, location is part of that agreement. If you decide you want to work in a different location than was agreed upon, that’s you indicating you want to amend the agreement.

Facebook isn’t saying: “you have to move and these are the terms”. Facebook is saying, “if you want to move here are the terms”. If you don’t like the terms you can always stay put or find a new job with terms you prefer.

Remote worker here: my home city was not part of the agreement. I don't know of anybody has "and I will only live out of X city" in their employment agreement.

If they're changing from office-only to remote, perhaps it's worth revisiting their contract, but we can't pretend that their place of living is incorporated into it somehow.

It may not have been.

That said, your state and possibly your county/city probably need to be known due to nexus (state incorporation and tax issues) and personal taxes (potentially all locales).

I believe this is why FB says they will crack down hard on people who fudge this info — getting in trouble with the tax man could open a Pandora’s box.

Yes, but that's between me and payroll, not a condition of my salary. That's the line I'm trying to draw.

Remote worker for Facebook?

I work remotely and my employment agreement actually states that "The workplace is determined in <my address>" in the first paragraph. Might be worth checking yours.

This is how prices are set. If you think labour is "value added less some employer fair cut", think again.

This also feeds directly into high land costs making industry less competitive or even infeasible, requiring for example offshoring.

This entire thing is quite interesting. For example you might want to live in the middle of nowhere out of choice, however it might be more economically beneficial, after you subtract rent costs, to live in a suburb or near enough to a major city to qualify for the higher pay due to the higher median salary. Or it may be the inverse, getting too close is a problem. Part of this would depend on how FB choose to compute this.

Nobody is having a salary cut forced on them.

People are free to continue operating in the same capacity they were when first offered the salary (working in SV office). If they want to change that, then they are renegotiating the terms of employment and hence should expect salary adjustments.

>Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN. Facebook also uses its own apps' to track employee locations, according to CNBC

So all I need to do paycheck arbitrage is to use a VPN with private residential IP (yes, that's a thing), and a rooted/jailbroken phone that does location spoofing?

Almost. Apps check if a phone is jailbroken, so that needs to be dealt with too.

That's only an issue if the use of a non-jailbroken/rooted phone is a requirement for doing the job. "I like my phone rooted/jailbroken" is a plausible excuse already.

They provide a biz phone for on-call and jail-breaking it is probably out of scope of what is permitted.

If you try hard enough, there are mobile carriers that will hand over the SIM's data session to a tunnel endpoint of your choice (via L2TP or IPsec).

There is always a way.

Is it possible to nest VPNs, i.e. connect to a VPN in the location of the preferred fake home, then connect to Facebook's VPN through that? I genuinely know enough about VPNs to know if this is possible or not.

Yes. This kind of thing is generally called "tunneling", not "nesting". As applied here, "chaining" would make more sense.

Oops, I meant to say "genuinely don't know enough about VPNs". Too late to edit now...

You would also need to avoid any and every other way of revealing your location.

Less hard than you think.

I really just need a closet in SF with my own gear and off to the races.

It's a shame slavery doesn't exist any longer. I'd sell myself to a company owned by a shell company I control in a state where slavery is illegal and siphon all my income that way.

Just pray travel expenses never pop up I guess?

if you're a dev the chances of you incurring a travel expense is low.

Really? I'm a dev (although not at Facebook) and I travel for work several times a year. Also, all of the remote employees I've worked with have traveled to the office occasionally.

dunno i’ve been fully remote for 6 years now. Many reasons people get together. Several times a year is my experience. Would be a tough pill to swallow to have to secretly travel to town, get a hotel, all on my own dime. What a huge stress & pain in the ass.

edit: In fact, “get the team together quarterly” is, last I heard, pretty standard guidance for distributed teams. I think it’s a fair assumption if you have little experience working remote. There’s more travel involved than you think though.

If someone is claiming to be local they just say report to some location on campus and badge in.

It's Facebook. You already know they use hundreds of sources of information to track and categorise people. Zuckerberg and CNBC just mentioned two.

That said, I expect you can fool Facebook for a while with high probability. You might need to commit fraud and/or tax evasion to do so, so that raises the bar.

> It's Facebook. You already know they use hundreds of sources of information to track and categorise people. Zuckerberg and CNBC just mentioned two.

To be fair I once interviewed at Facebook and to my surprise the CV the recruiter pulled was one I’d applied with three years ago, so the system isn’t all that foolproof.

Yes but on the other hand this anecdote highlights their talent for maintaining a dossier of your personal information spanning not only many types of sources but also many years.. :) / :(

Question: can you even work at Facebook without having an account and using it?

The biggest risk of leak would be during usage of their services like their app and/or website on personal devices. If you can work there while only using their issued work laptop it would be pretty easy to contain by sticking it behind a VPN router.

I've heard FB has their own version of FB for work, which is mandatory to have

Sounds hard

It's also tax fraud unless you fix that part.

Where did Facebook say that "cost of living" will impact salaries? At Google (where I work) salaries vary a lot based on location but cost of living is not part of the equation. It's based on the cost of hiring in the market.

I'm personally in the middle of an SF to London transfer. I'm taking a 25% pay cut. That is not because it's cheap to live in London (it's not) but rather because it's very very cheap to hire developers there.

I imagine Facebook will do something similar.

>That is not because it's cheap to live in London (it's not) but rather because it's very very cheap to hire developers there.

lol those are exactly the same thing

You misunderstand. While salaries are relatively low in London, the cost of living (i.e. rent) is relatively high.

Unrelated to the topic, but you are making a good decision.

Cost of living in London is not too different from SF, but FAANG salaries are still ridiculously high here and quality of life is considerably better.

You'll have less savings, but you'll enjoy life more.

Exactly, it's based on the local market's cost of labor. I'm curious about this topic - are developers cheaper to hire because there is an oversupply of them or an undersupply of jobs?

California might consider making this sort of practice illegal, in the same way they've prohibited requiring a salary history, or enforcing certain non-compete agreements.

Why? It's salary discrimination based on a tangential factor that arguably has no effect on the quality-of-work delivered.

To the extent an employer has the power to demand such a disclosure, it's suggestive of market-concentration & a lack of competition, that prevents an employee's skills, and skills alone, from determining their compensation.

(And, a possible added bonus for California would be that requiring big employers to pay California salaries, even to non-California employees, might deter those employers from seeking such California-tax-base-eroding arrangements.)

Given Fb has offices in many states, couldn’t they simply “transfer” you to the state closer to your home, instead of keeping your base in California?

Then they risk talent leaving for a competitor.

100%

California has no say over what FB pays its employees in Ohio.

I assume California also has some low COL places. From a quick look, SF vs Modoc is quite a big difference.

Fresno has housing prices roughly "average" for the nation. It's one of the lower cost cities in California.

"Average" for the nation isn't exactly cheap. There's no place with a genuinely low cost of living anywhere in California that I can tell. Fresno and Victorville are some of the less insanely expensive places and they both more or less serve as retirement communities for the more expensive coastal cities.

Fresno is routinely listed as having some of the worst air quality in the nation. You rarely hear anything good about it. In the movie "Monsters vs Aliens" it is more or less the butt of the joke as a place no one would wish to live.

I wouldn't be so sure. Does the employee visit California? Report to a California manager? Is the HR department calculating and applying some new, formulaic regional discount based in California?

It's also possible California & Ohio would have a shared worker-protection outlook. Many states, and some cities – among them Toledo & Cincinnati in Ohio - have matched California's ban of asking for salary histories. As public policy, they want employees judged for their current competitive skills, not some other non-germane circumstances of their life which doesn't affect work product.

Choice of residency could easily be treated the same. Even if California simply said, "you can't apply a salary-adjustment to residents of Fresno", it'd have a big effect. Ohio could then also add: "you can't pay Ohioans less simply because they live in Ohio".

I find it quite counter-intuitive that there would be different salary levels for remote employees depending on the location they live in, since for remote employees the location is now presumably their choice, and not the employer's - analogous to the personal choice of how expensive the employee's choice of dwelling is.

As others have mentioned, anything else runs the danger of creating potentially perverse incentives to move (fake or real) to a more expensive location, thus adding cost to the employer. And when salary costs for some go up, the argument could be made it lowers the pot of total salary money available for the remaining employees, since many large employers are managed to hit overall percentage targets for various cost items (like R&D which for web companies typically has a considerable salary component).

The whole thing sure sounds like a classic large company policy with unintended consequences. -- Running large companies is hard.

Companies like Buffer do this too: https://buffer.com/salary/content-marketer-3/average/

> Facebook also uses its own apps' to track employee locations

Not unexpected, but another reason not to work there.

I've worked remotely for 10+ years and I have one piece of advice. Ignore these policies. Live wherever you want and demand whatever salary you think you're producing at. If FB wants to leave high productivity labor on the table, let them. If any company has any kind of policy that stops them from hiring you, that's their problem. We've been in a seller's market for software development labor for nearly 20 years. Stop pretending like these arbitrary rules are your problem, it's theirs. They can't limit you. They can only limit themselves.

Yep! FB can’t pull this shit once you have other offers.

So much this. There's companies out there that value output at what you're worth, regardless of where you live at. I'm almost certain that Facebook is one of those companies — when it comes to high output employees. Negotiate.

Think about it from the angle of consulting rates as a remote developer. Would you charge a different rate to companies that operate in the same markets based on where you are at? Why would you accept a different rate as a FTE, then? You charge what you're worth, not where

The counter to that is that there's people that live in cheaper areas that are willing to accept less _because_ their cost of living is lower. If a company can hire them instead of someone )with the same productivity) basing their expected salary on what people make in SV, then why wouldn't they? Following that logic, people living SV should start making less while people living in inexpensive areas should start making more; it should even out to some extent.

That ignores why SV has a cost premium in the first place. High cost of living is pushed up because of the workforce not the other way around.

SF, and much of the rest of the Bay Area to a lesser (or greater, on the case of Marin) extent had a notoriously high cost of living before “Silicon Valley” was more than a small part of the South Bay.

It's more than tech work that has drawn people to SF, and that combined with supply restrictions that also aren't driven by the tech workforce have kept prices high since before the tech workforce showed up.

Going back to say 1950’s and it was still the workforce pushing up cost of living. Who those people are and what they are doing is a function of the time period, but people want to live there in large part due to the weather etc.

I don't see that as a counter. Yes, this might be bad long term for people staying in SF, and good long term for people outside of SF/the US. But individually you can look for opportunities in your own local market and get local market rates, or break that paradigm and look at other markets, just like companies are waking up to hiring employees in cheaper markets (beyond hiring consulting firms). Like everything in markets, there's always opportunities for the wise to take advantage of, on both sides

If demand for labor goes down in SF, and wages go down in SF, so will the COL.

The people living in LCOL areas don't hustle. They aren't the type to do 100 hours of leetcode. That doesn't make them bad engineers. But it precludes them from passing the incredibly one-dimensional assessment FANGs apply to engineers.

The hiring committees would throw fits if they had to consider hiring even the upper-end of talent in non-competitive markets.

These committees could be in for a reckoning if businesses realized they could be just as effective with mid market talent, because truthfully, not every problem that needs to be solved at a FANG needs a top 1% best-of-breed, (for example) 15+years-of-GPU experience engineer. Not every problem demands niche, hard-to-find specialty.

> The people living in LCOL areas don't hustle. They aren't the type to do 100 hours of leetcode

I think this hits on a very real signal that is sent by someone being willing to relocate cross-country for work. I know people from college that moved out to the coasts to work for big name tech companies. They were probably "above average", but none of them were terribly noteworthy.

The thing they were willing to do that the rest of us weren't was uproot from the midwest and go to the coast.

That's a signal that you're willing to tie your self worth to your job in a way that is very valuable (exploitable) to a company.

Pretty much described every H1b-er in HN. Except prolly the body shop employees.

> The people living in LCOL areas don't hustle. They aren't the type to do 100 hours of leetcode.

> not every problem that needs to be solved at a FANG needs a top 1% best-of-breed, (for example

I honestly can't tell if you're joking or not. The wording in the first sentence is that of someone being sarcastic, mocking the people who would actually use such language and/or expect such things. But the second quote sounds like you're being serious.

The difference between people living in high COL areas and low COL isn't how much they hustle. Some of the best people I've worked with are living in low COL areas, including one I was praising just recently for being a role model for others.

As a side note, if you're doing 100 hours of work a week, you're almost certainly doing a bad job at all of it. With the exception of a small subset of people, it's been shown that work quality decreases drastically when working long hours (for all the work being done, not just the work past the normal hours). Expecting your workers to put in those hours means you're aiming for sub-optimal, low quality work.

Next sentence following the first quote: "That doesn't make them bad engineers." You stated "Some of the best people I've worked with are living in low COL areas". I think we agree here.

The broader point with the first quote: People living in LCOL areas don't pull out all the bells-and-whistles to signal how absolutely amazing of an employee they'd be. Why? Because it doesn't matter in LCOL areas. If you went to a town in the middle of nowhere, and held everyone to the Leetcode hard bar, a smaller proportion would pass than in Silicon Valley. However, the hiring bar is lower in these areas as well -- therefore, one doesn't need to practice leetcode to secure employment in LCOL areas.

Re side note: I didn't say people do 100 hours of leetcode in a specific timeframe (one week was mentioned, but the GP comment didn't suggested that). Typically, interviewees Leetcode in preparation for FANGs. This preparation is done typically over a period of months.

> There's companies out there that value output at what you're worth

In any auction the selling price is not the value of the item to the winning bidder, it's the second highest bid plus $1. If you move to a LCOL area the competing offers are all going to be garbage unless you can find a second high-paying company to extend you a remote offer (which may or may not happen, depending on how widespread remote work becomes). Facebook has no reason to unilaterally raise their bids unless you can secure good competing offers as leverage.

The trouble is there are people who are highly paid because they are legitimately good at what they do. And then there are people who are highly paid because they live in an area where high pay is the norm.

The former are going to be fine either way.

The latter are in for a rude awakening.

so how do you differentiate if you are good at what you do, or is just highly paid because of where you live and worked?

Easy! If you live in The Bay Area it probably applies!

Many companies have a hiring restriction that requires candidates to live near their offices so that they can physically appear for work. This of course constrains the labor pool which artificially inflates salaries. This is of course exacerbated by the fact that in The Bay Area housing itself is also constrained, which multiplies the cost increase on local talent.

Why not just live in SF?

> the company needs to account for employee locations to avoid violating tax laws.

And you're potentially causing yourself a nice future tax issue.

Plus possibly criminal fraud.

The company needs to account for which state(s) my income taxes are to be paid towards if I'm w2'ing their situation, as a citizen of the United States, I give as little information as possible because then I'm not able to be 'wrong' or somehow incorrect.

This leaves me with exactly two addresses for location, one for shipping things and one for "The state in which you reside". Residence is a legal thing, you can travel and be nomadic while maintaining your resident status within one or more particular states.

I've been working remotely for 10+ years like the parent comment, and it would make a very interesting impact on my tax history if what you both are saying holds any water.

I downvoted your suggestion because it's illegal (like, felony tax evasion and perjury illegal).

Why is it illegal?

It's illegal to live in SF?

Guy edited his comment after I posted. He was initially advocating lying about living in SF while not actually doing so. Poor form.

Ok, I've had that happen to me one time. I hate that.

Some people are competing with local labor. Others are competing with global labor. Which situation benefits you strongly depends on your ability to demonstrate value to the employer.

It isn't just supply that is global but also demand. If you demonstrate exceptional value relative to supply globally, then buyers of your skills must also compete globally.

>Some people are competing with local labor.

Proximity might have been valued so highly that it felt like you were only competing locally, but I think this was just an illusion. You've always been competing with global labor.

True that they cannot limit you. Except working at a FLiNG company what I have noticed is (sadly) they dont really think much of talent unless you are a brand name (creator of any obscure framework we are stuck with and cannot get out of). Reality is given the normalizing nature of our interviewing processes (leetcode puzzles) without a Brand, a dev (regardless of experience) in the bay area is qualitatively "same" as their counter parts outside - except BA ones are a fair bit costlier.

What is FLiNG as opposed to FAANG? This is the first I've seen this version.

There’s only FAANG

LinkedIn maybe? First time I've seen it too.

Ah, yeah, that seems like a good guess.

Foursquare, Lidl, Nike, Globe and mail

Hah sorry yes. Li=LinkedIn. Purely a compensation thing rather than any suggestion of any "elitism". I still can't get over how much in the bay area folks feel that "technical pride" at the Big Cos.

Ah, I see, thanks. Honestly I haven't thought too hard about who is included in the acronym / why. I know I've heard arguments about, e.g. whether AMZN should be in there based on size and influence vs pay, etc. I didn't know LinkedIn paid on that same level, that's interesting.

Their loss. That’s GP’s point right? If there was a fair market, they’d lose out on talent that brings their business forward vs competitors.

Great sentiment, but it's just not a workable position.

These guys have massive resources at their disposal, and they will crush a handful of 10x'ers if that's what it takes to get what they want.

For goodness sake, Facebook has a bolo list complete with real-time location tracking. Writing "F--- you, Mark" will land you on that list [1]. They view themselves as a quasi-government [2].

If we don't act through Congress to control powerful groups like Facebook, our personal and professional lives will be less free and less fulfilling.

[1] https://www.cnbc.com/2019/02/14/facebooks-security-team-trac...

[2] https://www.vox.com/the-big-idea/2018/4/9/17214752/zuckerber...

This is only a problem for you if you really want to work at Facebook for some reason.

I'm with you, but FAAMG sets the tone for the industry. There is a corporate Overton window, and Facebook is an important "thought leader".

I used to feel like I was limited by those "thought leaders" too. Except I lived in an low COL area, where the inertia is towards a lower salary. Once I started working remotely, I learned I wasn't bound by those ideas anymore.

Considering your name is "Consultant32452" - and not "RegularEmployee32452" - I presume you do consulting. How much are you earning? You said you're not bounded - so I am presuming you're at like $400k+/yr as many FAANG engineers are. Would you still get that if you turned into a regular IC instead of a consultant? I don't think everyone who goes remote wants to be a consultant (or can be).

$150 Oklahoma == $400 FAANG

no, that's not true. $150k is $150k, and even tho the CoL is high in the bay area, getting $400k can get you further in a shorter time.

If you were able to save a percentage of your income, then that percentage is going to result in a higher amount for the FAANG salary.

Quite.

An example, is buying a house.. and rent pricing reflects purchase price.

If you buy and pay off a house, you have "spent" that salary in both locations. However, when you retire, you have property worth a LOT more in SV.

So while the "take home" pay, after expenses is the same with 150/400, the equity is massively different.

This is why I evaluate my estimation of my savings rate with that position and location, not salary. Everyone does a minor version of this with taxes and rent. I just take that to its conclusion and only measure a YoY delta in savings.

In HCOL locations, after 10-15 years of high pay work, you end up with a massive equity in your property (assuming you weren't renting), often enough to just retire in 99% of the places in the world. You don't get that in Oklahoma.

In Oklahoma you also build a bunch of equity in your home. What's even better is you don't have to sell your home to retire and move out of California. You just retire. You already live in Oklahoma in your dream house that is paid off.

You also have a 10-15 year head start on creating realtionships/roots and don't have to leave all your friends behind.

Yes, I'm making about $400k this year. People are willing to go hundreds of thousands of dollars in debt to go to prestigious schools, move away from their friends and family clear to the other side of the planet for these kinds of work/income opportunities. Conversely, I have a high school diploma and remain close to friends and family. I think people are more adaptable than you give them credit for. Sure, not everyone is going to figure out how to make it work, but not everyone was going to get into MIT and then work at FB either.

I'm wondering if your experience is even remotely translatable for random FAANG employees. I don't know what kind of consulting you do or how these people would translate into such positions where they can really keep earning their large compensations.

Your points about moving and college have nothing really to do with the discussion at hand - do they? If staying in whatever place you are is what you wanted then good for you. Many people don't like where they grew up or the people they grew up with. I'd also hesitate to imply that your experience with a high school only education and the employment opportunities that came up is going to be anywhere near common.

I'm not doing anything particularly special. Most people might more accurately describe what I am as a "contractor" rather than a consultant.

The points about moving and college are about people shaping their entire lives in such a way to be successful and meet their goals. The landscape might change a bit, but people don't stop being willing to hustle and adapt to the changing landscape.

I think probably the best thing that happened to me is I didn't have all of these mythologies about what I was allowed or capable of accomplishing drilled into me by the standard path that most people take. I imagine if you've invested your whole life in the understanding that the way to "make it" is to graduate from a top tier university and take a very narrow set of employment opportunities, it would be hard to escape that mental prison. But that's all it is. The hiring committees at FANG might reinforce that mental prison, but you don't have to deal with them. If you went the conventional path and got those fancy credentials, it's not like it will be harder for you to make it out here in the non-FANG world than it was for me. It'll probably be easier.

FAAMG? When was N swapped for M?

If it hasn't already, it should. Microsoft is way more influential in tech than Netflix.

https://knowyourmeme.com/memes/cheems

ok fam

Don’t give up on the perpetual dance between employers and employees. The tension between companies wanting to commoditise their staff, and staff wanting the opposite and in some sense be a business of themselves.

I'd like for this to be the truth, but I fear with the power a company like Facebook has that they may start the trend and other companies will follow them soon.

And really don't want to work for any of the "next facebook" startups or companies that parrot every practice they read facebook may do.

Maybe not if you demand the optimum dollar.

Instead, consider the set of jobs offering at least half of a FB salary. Choose the one that seems most delightful and liveable. It probably won't be Facebook.

(How? Cut your spending to the bone. There's more to life than money.)

"Cut your spending to the bone. There's more to life than money." seems contradictory to me. Every time you cut spending deliberately, you add monetary constraints that make more of your life revolve around money.

Some changes require more of your attention than others. For example, eliminate cable TV. It's a one-shot effort, and then you never think about it again. A lot of saving are just not buying things: a second car, a motorcycle, a vacation, etc.

How do you handle promotions and negotiating raises? I'd be concerned about the long term effect if I went remote. The bay area is expensive, but a 50% or 100% increase in compensation seems possible. That only seems possible in areas like the bay, Seattle, or NYC.

Please don't take this as rude, but this comment seems incredibly naive. Bay area is easily twice as expensive as many other locations. A 50% or even 100% increase in compensation seems like a very bad deal.

You might more successfully argue the benefits of bay area weather. But those arguments are harder for Seattle or NYC.

If you double your salary but double your expenses, that's still a good deal because you've doubled your disposable income (ie. the gap between the two).

I'm not offended. I'll give you housing. I'm nowhere close to being able to afford a home. But I'm fine with an apartment. Doing a rough estimate of housing in places I might consider moving to, I might be able to save 5k-10k/yr. I could save more after actually looking, and maybe get a nicer place.

But I don't think saving that money would be worth the long term cost of moving to a place where I would be overpaid for my experience level. I might get lower raises, and I think I would have a hard time getting a competitive offer as a remote worker.

The calculations would change if I had a family. I'd be be able to afford a really nice house in the state where I went to school.

I don't really consider promotions or raises. If I take a job, after 1 year I take a hand full of interviews even if I love my job. Then I repeat every 6 months. This improves my ability to interview and keeps me aware of what skills are being required as well as what compensation is being offered. If I get an offer substantially better than my current one, I take it.

> Live wherever you want and demand whatever salary you think you're producing at. If FB wants to leave high productivity labor on the table, let them.

You need leverage to make demands and the best way to have leverage is to have competing offers with similar or higher numbers. If more higher paying companies are open to remote work, then you can play that game, but if your only competing offers are from local companies who pay crappy non-tech-hub salaries then Facebook is just going to call your bluff when you ask for more money. It's still an open question how the future is going to pan out.

Where I live, even $15 per hour is considered a decent salary for a mid-senior engineer. I know for a fact that I'm on the same level as engineers in the valley, both in hard and social skills, up to the accent and culture tropes – but I'm still here because I never wanted the H1B hassle (especially without a degree).

Every time I read comments like yours on HN, I become more and more hopeful about my future. I'm not in a bad place right now, that's for sure – but it looks like it's going to get a lot better.

Allow me to boost your hope a little more. I'm a college dropout, don't work for a FAANG, and will make about $400k this year. I hope you make it big.

You sound inspirational, but an outlier. I hope to become one as well, but rely more on trends.

Everyone who makes $400k/yr is an outlier to some degree, regardless of their pedigree or employer. The key to my success is a skill stack, rather than a skill. I'm a pretty good programmer but I am really good at taking really complicated things and explaining them to non-technical people without using jargon. That makes me valuable where I am. But the thing that opened doors for me is the third leg of my skill stack: teaching. Every opportunity I have to teach something, I do it. It can be teaching my entire team about unit testing and mocks, how to transition from one source control system to another, or taking a junior programmer and teaching them to think like a programmer. Especially the latter group, those people who you teach to improve their own careers really remember it. Because employers suck at giving major raises/promotions when people grow, those people usually leave. And then every opportunity of theirs suddenly becomes your opportunity too. As soon as there's another opening, they want you on their team. In a way, you increase your own luck by increasing the luck of others.

Of course it's not 100% guaranteed, and if you acted as if people you mentored owed you something they would just resent you anyways. To butcher a metaphor, when I changed from being a shooting star super-developer to a rising tide that raises all ships, that's when my income and opportunities really took off. When I stopped caring about getting credit for everything I touched. When I started doing everything I could to help others in their career, mine really took off.

If your method of motivating people is "severe ramifications" maybe it's time to chill for a while and go fishing.

Consider the "severe ramifications" that Facebook would be facing if they are reporting income for a worker in California when the worker has decided to move to Montana.

Imagine paying an employee in a manner that you don't have to worry about them lying about where they are. Rather than judging how much to pay them based on where they live, you just pay them and not worry if you can screw them over or not.

Cool. Lets change the laws to make that legal.

This comment was dead. I vouched for it which brought it back to life as I believe it makes a strong point the parent comment disregards.

...to make it legal to pay someone on the value they bring, rather than where they live? Pretty sure there no obvious laws against that. ETA: as long as the value is high enough, at least.

Probably you meant "to not have to know where they live", but that wasn't what the GP's post was saying.

That would require treating them as a contractor, then they are responsible for doing all of their own taxes (1090 vs w2 income).

No, it would not. There is nothing preventing Facebook from paying employees of certain levels the same salary range regardless of location. The only reason Zuckerberg even has to clarify that they will be checking to make sure employees are where they say they are is precisely because he announced that Facebook would be paying location-adjusted salaries. This creates the perverse incentive for employees to claim they are living in high CoL areas when they are not, which in turn has repercussions because it negatively impacts Facebook’s ability to fulfill its legal obligations to the governments of the countries in which it operates.

However, if Facebook simply detached compensation from location entirely, there would be no incentive for anyone to lie about where they were, which also makes it easier for Facebook to file correct information. This only “works” for the tech employees Facebook currently employs in high CoL areas of Facebook set universal compensation levels at or above current levels. Otherwise, those in the Bay Area would be negatively impacted when Facebook adjusted this new universal pay scale down.

The issue with doing this from Facebook’s perspective is that labor expenses would not be able to be cut, which seems one of the significant drivers of the policy. Fewer colocated employees in the bay would lead to much lower capital costs, but this way they save money in two ways.

The actually more significant issue with a universal pay scale (though if I were Facebook I would not care about this) is that it would likely create a massive exodus of tech employees from the bay to other areas of the United States as people sought the highest amount of bang for buck. The tech employees themselves would not likely suffer in this scenario, but the region—which has built up enormous social infrastructure assuming the tech industry’s semi-permanence—would be hit hard. A lot of service jobs would disappear, for instance.

Personally I don’t think the diffusion of talent across the continental US would be a bad thing, though. 31 counties in the US account for 33% of GDP and a sort of geographic would relieve a lot of social and political tension that has been building since the 1970s. We also leave a ton of GDP on the table due to geographic concentration of firms in the US (working on finding the NBER paper I read on this recently). Encouraging tech workers to spread out would then be a utilitarian social good. However, I’m not sure Facebook really cares about this given the stated policy, and this is sort of a third order concern from “how do we decrease capital and labor costs” anyway.

No, I didn't say don't pay taxes, I said don't pay them less because they live somewhere cheaper.

Why would the fraud be on the employer here and not the employee?

Exactly. This would be fraud on the side of the employee and Facebook shouldn't be playing the role of police.

The tax authorities won't see it that way.

How much due diligence are companies expected to do when it comes to these things so that if it happens anyway the employer can be considered off the hook?

Where are you going with this? It isn't really controversial at all that a business needs to pay state taxes associated with their employees resident in the state. We can speculate about some alternate tax regime that didn't have those complications but to speculate on how a business can skirt the existing requirements doesn't seem like a productive conversation

No legitimate business is going to play games trying to illegal avoid these basic state taxes. They may choose to not have employees in certain states due to particular laws though. California comes to mind...

We aren't talking about businesses not paying taxes. We are talking about employees lying about what state they are in. Which is the excuse Facebook is using to monitor employees' location via VPN and geotracking.

Because employers are required to pay payroll and income taxes based on where the employees are performing their work functions.

The fraud is on the employee but the tax issues fall on the employer.

Yeah but you don't need to break the tax code ... I mean, you could live in those small, more affordable yet decent places north of LA like Ventura or Simi Valley and report you are in SF... Not to mention living in a cabin in the Adirondacks or Brighton, NY for that matter but report you are living in NYC...

The CA examples don't raise issues because CA doesn't have local income taxes. NYC does, so your NY examples don't work... Unless you are okay with paying NYC income taxes while not living it working in NYC.

Hopefully they face some very severe ramifications for reporting their income in Ireland, yes :)

https://www.reuters.com/article/us-facebook-tax-idUSKBN20C2C...

I didn't read that statement as referring to ramifications from facebook, but federal and state tax agencies.

I understand this, although I disagree with the notion that a job is worth "more" in a high rent area than it is in a low rent area. But that is a different thread.

That said, when my kids were in school there was a phenomena that "Cupertino Schools are the best public schools" so parents wanted their kids to go to those schools. Which you could do if you lived in Cupertino, but Cupertino has higher costs than say living in South San Jose. So creative parents would make their "home" one of the apartments run by a "friendly" landlord who would "rent" them an apartment for $100/month, and give them a utility bill with their name on it so that the student could claim Cupertino residency and go to Cupertino schools. Other scams involved people offering to pay the utilities for someone who lived in Cupertino so that they could get that precious document which saved them $8,000 a year or more on private school tuition.

Depending on the difference in salary, I would not be surprised to see some of that action going on with regards to people's "Facebook home"

As someone who grew up near Cupertino, these "scams" have been going on at least since I was in middle school decades ago. One of my classmates rented a small trailer at the top of the hills that was just technically in the school district. It didn't even have running water.

Worth pointing out that if you lie to your employer and get caught probably the worst that can happen is you get fired.

But if you like to the government and get caught you can go to jail.

Although I think it's unlikely that you'd be prosecuted rather than just fired, it is most likely a criminal offence to obtain a higher salary by submitting false documents.

Ya, upon reflection, you're right. Agree it will be unlikely in most circumstances though especially since not only would the company have to press charges, the local DA would also have to decide to pursue the case.

I wouldn't risk it if I worked for Oracle though!

Or IBM. Or so I heard.

Already happened before. This woman tried that and got caught (though she's far more sympathetic than a tech employee doing it... https://thehill.com/blogs/blog-briefing-room/news/434051-sto...)

"You are charged trying to get your kid into a good school through mail fraud"

Eh. Hard pitch for a DA to run with this case. I don't honestly see a poor family being prosecuted for trying to get their kid into a rich school due to their property line. The DA office wouldn't like these optics. Jury?? Not a chance. If it were rich kids taking advantage of a poor school - the DA would run with it.

That DA got elected by rich parents who paid high prices for their houses to get in a good school district. Do you think they want their school "ruined" by poor kids sneaking in illegally?

I saw similar scheming in DC Metro for high school sports. Live in high school X's area, but their basketball team is terrible? Rent the cheapest apt possible in high school Y's area and send your kid there to play ball. For a select few kids, it was worth full-rides at Big State U, so I can't hold it against them.

Here in Washington, a Seattle salary of $150k is worth around $315k in Spokane. And that's in the same state.

https://www.bestplaces.net/cost-of-living/spokane-wa/seattle...

So this depends on how they compute this. If it's not that granular you might be able to live in a low cost location that is ranked as a higher cost location by the FB "salary grid".

Having that grid information would be very useful to an individual when negotiating.

The cost of living scaling doesn’t cover the entire salary. Only about 30% of my salary goes towards cost of living, more than half of it goes to savings. If my salary was scaled from Seattle to Spokane levels, my savings at retirement would be enormously impacted.

That sort of cost of living also doesn’t account for a huge amount of other things too. Having a holiday in Bali costs the same whether you depart from Spokane or Seattle (probably slightly more departing from Spokane actually, when you account for transport from Spokane to SeaTac). Buying a new 4K big screen costs the same in Spokane as it does in Seattle. Living in Spokane doesn’t make your kids college cost less either.

Agreed, that bestplaces COLA calculator is bizarre. On one hand I think it's great that it breaks down relative costs by area - like you say, it's clear the difference in cost between Spokane and Seattle is almost entirely due to housing.

But then it fails to take into account the percentage of income that actually goes towards housing. If you make 200k and move to a place where the primary difference is housing costs (say 2x housing costs), the adjustment should be up to about 250k (assuming housing ~25% of income), not 400k.

> Living in Spokane doesn’t make your kids college cost less either.

It would depend on how much of a pay cut you experience moving to Spokane, but that can certainly make colleges with extensive need-based aid cheaper.

When you're talking at the levels that most engineering positions are paid pretty much anywhere in the US (even lower cost of living areas), you are unlikely to qualify for need-based aid anyways. A pay cut from (lets say) 200 -> 150 is significant, but I don't believe likely to qualify a student as "low income" by any means.

Stanford covers all tuition for parents whose income is $125k or less, and partial tuition for parents making more than that until some cutoff. Regardless, $150k would be getting you a decent bit of financial aid.

I don’t think “your pay cut might be big enough to qualify you for financial aid” is a typical part of the WFH sale pitch, in any case.

> Here in Washington, a Seattle salary of $150k is worth around $315k in Spokane. And that's in the same state.

Spokane and Seattle are on opposite sides of the state - 280-300 miles apart. I don't get what you're trying to get at. The distance is large enough to go through multiple states on the east coast. I don't think it's really an apt comparison since the two are nothing like each other. You could make this same comparison in CA with a SF Bay Area salary and even less distance apart. Here's one for you: https://www.bestplaces.net/cost-of-living/redding-ca/palo-al...

> Spokane and Seattle are on opposite sides of the state

All that matters is that Facebook consider them within the same CoL-adjusted region. If their CoL weighting is applied at the state-level (for example if Washington residents are to be paid at 80% the effective SF salary), then this is the real arbitrage.

The cost of a new Tesla, toilet paper, or chicken is not twice as much in Seattle. This is basically true for housing only

Not just housing. Food, child care, services, bars, etc., are significantly cheaper. My kid’s private school an hour east of DC costs 1/3 less than the going right inside DC. Daycare is 30% cheaper. A cocktail is somewhat more than half the price.

As odd as it might sound, child care and private schools line up with housing prices in an area, so it can be ideal to think of them as the same category. Likewise utility bills can be inflated to.

Other costs are not much higher if at all. If you go to a bar in the financial district, that's usually a business expense so it's justifiably expensive. It's this way in all cities or towns with a large enough center though, so pricing come out somewhat equal. It's when you compare city center prices with outskirts of city prices where the difference starts to matter more.

Sounds about right. You'd have to pay me at least $150k extra before I'd consider living in the 8th circle of Hell, Spokane.

I haven't lived there. What has been your experience?

All the bad parts of San Francisco with none of the redeeming qualities.

> The biggest loser, he predicted, would be California.

California had been downtown hostile to the tech industry and grown complacent work the status quo because the tech workers had to be there. If tech workers don't have to be there, they will start trickling out.

CA worked hard to make the bed they're about to lie in.

Eh, I've heard people predicting the end of tech in California for YEARS. Hasn't panned out, and I don't see it changing anytime soon. Kind of reminds me of the people who say that China's economy is a house of cards and is going to implode any day now. They've been saying it for decades and nothing has happened.

When I was in college almost 20 years ago there was a lot of discussion about if commerical software would be produced anywhere in the US in the next decade. It was a legitimate concern of mine.

CA won't implode soon. But momentum is hard to change and right now the industry is looking for a ways to not be in CA. It hasn't panned out yet, but once they are unlocked and can leave the region there will be a river of people leaving. Let that run for a decade and then there will be trouble.

If (and that's a big if) the current trend allows CA workers to work remotely from non-CA, I think SV will be a very different place in 15 years. A place not on the trajectory of the last 15.

GitLab seem to be very open about that. They have a salary calculator that includes the location. https://about.gitlab.com/handbook/total-rewards/compensation...

this is very interesting.. backend engineers get paid more than front end at the same level.

some of the location multiplayers makes the roles completely insane, scotland for example.

> backend engineers get paid more than front end

I'm not surprised having setup a hosted GL instance. It's actually quite amazing how it mostly just works but when things go wrong between upgrades and migrations you quickly realize how complicated everything is under the hood.

https://docs.gitlab.com/ee/development/architecture.html#com...

digging into this, it doesn't seem to adjust for CoL but competitiveness of the market. Seattle and NYC have the same salary bracket, but NYC is by far more expensive. Nerd Wallet claims the city is between 37% to -6% more expensive depending on where you live (Manhattan vs Queens)

Wonder how that pays off for them in terms of hiring. Last time I was looking for a job, I put them near the bottom of my list because of the location-based scaling.

When we were still accepting applications we got 15,000 per month. I'm sure that this was so high because of all remote and that if we paid everyone SF rate that would have been even higher.

Same here. It’s interesting that they won’t know who never bothered to apply. A more typical company which doesn’t make their salaries public would notice if candidates repeatedly drop out of the hiring pipeline due to inadequate pay.

On the other hand they seem to be doing well as a business so recruiting evidently hasn’t been a big problem for them.

Yes, they're very open about how they descriminate and earn more off employees who live in cheaper areas... It's a very weird stance to take and always infuriated me. They adopt a policy of radical transparency in their descrimination. Quite shocking too in the amount of pride they take in it, truly the market leaders in virtue signaling and disonnance.

And for those who don't think there's a better way, take a look at Basecamp or Zapier's salary policies.

I wonder how you figure what counts as "Seattle," for instance. Does Tacoma count? It's a 40 min drive - people do commute to Seattle. Or is Tacoma under "everywhere else, WA"? It's a $50k/yr question despite the CoL difference not approaching that.

Right. I wouldn't mind moving back out to the redwood tree forest in Northern California, which can be as quick of a drive as 1 hour 30 minutes from SF, but realistically 2 or so hours.

All the other areas in CA it lists are super far away, but regardless I have a feeling it would count it as CA Everywhere Else, despite the prices out there not being far off from Silicon Valley.

Piggybacking. This should be no surprise. When your job becomes remote, you now compete with people willing to earn half or less because they choose not to live where you do. Basic econ. Don’t be entitled, it’s no surprise most of the country hates tech workers.

>Don’t be entitled

Because you want to maximize your earnings based on the value you bring? LOL..

No, because people are trying to “hack” the system by getting SV wages living in Des Moines IA. This will introduce upward pressure on cost of living everywhere else. No, you don’t deserve a 6000sq ft mansion that a doctor living in the same region cannot afford. Besides not making sense, since as I mentioned, there are people willing to make half as much who live in these areas.

>you don’t deserve a 6000sq ft mansion that a doctor living in the same region cannot afford.

Speak for yourself.

One life to live. Go for the home run - stand your grand, hold out for the big offer.

You don’t get paid based on the value you bring. You get paid based on supply and demand. Once they can hire from anywhere in the US, the supply increases.

The supply does increase.

But the time to properly screen senior engineers remains finite.

Who are the people that can properly vet senior-level talent? A few other senior-level engineers that are on the team?

So you want them to ask questions that are beyond the superficial, phone screen 50 candidates, all the while they're supposed to continue to do product development, fix bugs, comments on PR? Something will suffer - either the hiring process or product development.

For every potential hiree that rejects an offer, an engineer that gets into the late stages of the interview process only to be hired away by a better offer is time wasted by your engineering team.

Engineers in the late stages of hiring have the upper hand. Repeat it to your self. "I have the leverage."

With an offer on the table, push back and counter offer. They don't want you to walk away.

Living in Des Moines and they already have a senior team in SF? Awesome. Ask for the SF salary or walk. They'll counter. And if they don't? You can salvage the deal by approach them in two days with another counter. In two days, they have _not_ lined up another qualified senior engineer.

They've already burned so many resources. The company knows this. Now you do too.

We are living in a post-Covid world. All of the money losing companies are laying off people leaving the FAANGMs that have a real business model and making money the only companies hiring at inflated salaries. Now you have both increased supply because they are expanding outside of the west coast and more “smart people” (tm) who spent years at the leetCode alter looking for jobs. You also have reduced demand with VCs not willing to throw good money after bad anymore.

I’m waiting for this to be framed as a racial equity issue. Are they really going to pay people in Detroit and Atlanta less than people in San Francisco and Seattle for the same job in the same “virtual” location?

If they make more working for Facebook in Detroit than for a a Detroit-local tech company, and they will, it's hard to say who's harmed here.

Of course there's gray area here but I think it will be fine. They won't be the first company with localized salaries.

Probably. You can get a 2br apartment in Detroit and Ann Arbor for half the cost of a 1br in San Francisco.

I can smell the next SaaS offering: pobox.me, rent a po box and real address and take your salary to the next level!

> Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN.

bundle that with a VPN as well.

This is essentially what Delaware C-Corps do in order to avail themselves of regional regulations.

This is a excellent point. What state is FB incorporated in?

Looks like... Delaware! https://www.delawareinc.com/blog/facebook-is-a-delaware-corp...

Whoa!

From the article:

"Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN. Facebook also uses its own apps' to track employee locations"

Allegedly because:

"Employees who attempt to wiggle around those compensation adjustments will be subject to “severe ramifications,” he said, as the company needs to account for employee locations to avoid violating tax laws."

Couldn't I run a VPN on my laptop into SF Bay then run a second VPN session in a VM to show I'm connecting from SFO? Seems there are ways to play the system.

Eventually you commit tax fraud yourself.

Not really.

With all the spying^H^H^H^H^H^Hdata mining Facebook does, I think they can figure out where their employees are located.

This would be a spectacularly bad idea. Renting a PO box (or other front address) in a high cost location such as SF or NYC is going to open you up to tax liability there. At the same time, your actual legal state of residence is also going to want their share. You might get lucky, with your state of residence giving you credit for taxes paid in another state. But that’s not a given. Federal plus multiple states tax returns are a PITA.

But the biggest reason not to do it is that you’re presumed to be local: How many times are you going to “enjoy” paying walk up airfare from Raleigh Durham to SF because you need to give an in-person presentation the next day and you were assigned because you’re the only person on the team who isn’t remote?

I think the (perfectly sensible) idea is to keep "working" from SF to get a large bump in salary from Facebook (or others) that should more than offset the higher taxes.

It just happens that your living expenses dropped because you are now sharing space with a bunch of other developers in nano-flats (in a converted warehouse with a huge VPN relay pipe). In reality you are working from your second home (say, a vacation property at some cheaper place). I am sure it is somewhat irregular, but I am not sure it is illegal and while 100% against FB policy I do not think they can really act against you without FBI-style anti-employee snitching, which can easily backfire.

Renting a PO box (or other front address) in a high cost location such as SF or NYC is going to open you up to tax liability there.

Fact Check: false. Local taxes are owed based on the physical location the work is done.

Though there are many other reasons that this is a bad idea.

You should fact check your fact check. New York and California income taxes are based on residency. If you live in one of these states and work in a different state, then you will owe income tax to your home state. New York City also has its own income tax which is also based on residency in the city.

Renting a PO Box doesn't establish residency.

> Local taxes are owed based on the physical location the work is done.

Actually, state law varies; it's quite possible for taxes to be due in both the state in which work is done and the employee’s state of residence, or either one of those alone, or neither.

See, e.g., https://www.americanpayroll.org/compliance/compliance-overvi...

Ya, I glossed over some details there. However, the main point I was trying to get at is that a PO box doesn't mean bupkis for this question.

Generally speaking, trying to scam the taxman unless you wealthy enough to hire people to find loopholes for you is a really, really bad idea.

Or maybe virtual airbnb with onsite vpn ip per unit in the residential area split across different employers?

If a developer is 100% wfh and productive, who cares where they live? FB's stance would seem to alienate the technical talent that they spend a fortune to recruit, train, and keep motivated. Not to mention make anyone who wants to move an easy target for competitors to poach.

Edit: Of course the IRS should care, and employers should want to accurately report domicile. His statement came across as the company being more worried about the exploitation of a corporate compensation loophole than adherence with tax law. Maybe they saw so much initial interest in relocating that they felt they had to pour some cold water on it.

The IRS cares where you’re working. Facebook (or any employer) has to report it accurately.

Do they have to adjust salaries too or is that just saving money on compensation?

No government authority requires salaries to vary based on location.

Federal salaries have cost of living adjustments.

Absolutely, but that's them acting as an employer rather than as a regulation of other employer's choices.

The IRS isn't telling Facebook how much to pay me.

Also, the IRS rarely cares what state you're in. States may, though.

Also, it's all arbitrary anyway because plenty of people do cross-state travel for work on a regular basis and don't have to declare it.

I would also like very much to pretend to be working from Washington and pay no state tax, while living in California.

What a great way to make people rush to the cheapest and least convenient parts of the highest income areas, further displacing poor people.

I can only be in one place at a time, so my displacement power is constant.

some people just complain. if you're living in a rich neighborhood, they complain, if you live in a poor neighborrhod, they complain. wfh? complain. working in the office, not good either. because poor people and climate change and discrimination.

You're right, that there are plenty of people who will complain no matter what. I think its reasonable from the perspective of someone who's say, a schoolteacher in San Mateo of 30 years that has to live and commute from Richmond or Tracy?

Building lots more housing would be the best way to make things equitable at least.

I don't think high income individuals will try to save a few $ and live in a high crime neighborhood with no hipster 10$ coffee in sight.

Why not? I am, and most worrying about "high crime" neighborhoods is pearl-grabbing by people who are afraid of visible poverty anyways.

High crime? I live in suburb 2 blocks from a forested area with trails in a nice area and I'm paying $700 a month in the SF/Bay Area.

The crime in the area I'm in is lower than most of the bay area because the area gets overlooked.

The downside is there are less high end food options, but still some pretty good options. Oh, and the allergies. I get allergies. Too much nature. But it's nice.

> I'm paying $700 a month in the SF/Bay Area.

What?? How far out are you considering the Bay Area? Is that for a room or a place to yourself?

East Bay. West side of the mountains inbwtween 880 and 680.

They will if they want to own property

Actually I hadn’t thought of this.

How far do you have to move to get a salary adjustment? There are very cheap places a 2hr drive from SF. If you move to Vacaville, does that lower your salary?

I live in a van. Does that mean I'm working around compensation adjustments?

Knowing FB, probably. You only get to keep your high salary if you're spending most of it.

What state(s)|countr(y|ies) do you report as your location for tax purposes?

Working for a New York State-based employer is interesting in this regard. NY demands income tax when telework is not for the benefit of the employer. Depending on where you are working and what the tax laws are, you may be paying two states income tax.

https://www.tax.ny.gov/pdf/memos/income/m06_5i.pdf (PDF)

Really, if you’re a contractor and if the local and state governments have f*cked up the housing market as badly as they have in much of California, badly enough that you have to live in a van, I don’t believe that they are morally entitled to capture even a dime of the value of your labour in income taxes.

Screw ‘em.

> I live in a van.

>> What state(s)|countr(y|ies) do you report as your location for tax purposes?

I live in my employer's semi truck. I report my "home terminal" as my tax paying state, using my son's apartment in that state as a mailing address. I pay taxes in that state.

Other truckers maintain an actual physical residence of their own. But there are many like me. It's sort of like living in an RV, wrt taxes.

You have to pay taxes in whatever state your van is located. If you work in multiple states, you have to pay taxes in multiple states. Athletes have to pay taxes in every state they play. If they played in one game per state in 25 states. They have to file 25 different state tax returns.

There's a thing called being a tax resident.

For example, at the country level, I'm currently working remotely from Spain. If I stay here longer than around 6 months, I'm considered a tax resident and then I should pay taxes.

If you're planning to start working remotely from another country, you should know that the USA requires US Citizens to pay taxes anywhere they live. You should also know that some states require you to pay taxes wherever you live. For example, California has the highest state income tax in the USA, and it (tries) to tax CA residents even when they are not in the state. If you leave your nice Palo Alto apartment to work remotely for Facebook from Da Nang in Vietnam, you'll be paying USA taxes, and possibly California taxes.

If you don't know what terms like bona fide resident & physical presence test are, it is (in my opinion) very much worth talking to a talk professional to understand what your tax liabilities are if you intend to change your physical location to work remotely.

If you wanna go down the rabbit hole, start by looking up the foreign earned income exclusion.

I’m currently living rent free at my parents place in Palo Alto. Can you imagine how much more Facebook would pay me than someone renting in a poorer neighborhood?

This is an extremely important point. Everyone will rush to the cheapest part of the most expensive areas.

This is literally how gentrification starts.

While the cost of rent is certainly one aspect of where people choose to live, it certainly isn't the only aspect. Tons of people choose to pay more to live in more expensive areas because they find them nicer to live in.

And people who want to retire early or buy rather than rent but still live in a nice area will flock to low income areas now that they don’t have to commute into the office.

Isn't that already the case regardless of remote work? You get paid more in expensive areas, and want to minimize your costs.

How is East Palo Alto doing? Serious question, when I was still in SFBA I think the houses there were 2 times cheaper than across the highway and the joke was the weather forecast goes "Palo Alto sunny, East Palo Alto sunny, stray bullets". I was wondering if I should buy a rental house then (~2013)...

East Palo Alto is minimum $1mm homes now. Unaffordable to anyone not in tech.

Yep, adjusted for local taxes.

Best strategy is to find a high CoL area with a low taxes and low CoL subregions.

I presume there won't be an adjustment based on which specific city you're living in but more based on the general region. The Bay Area will likely have the same salary band all around regardless if you're in Oakland or Palo Alto. After all - once you do that then where is the line drawn? For instance, some areas of Palo Alto are much more expensive than others.

Maybe they should start scaling based on how much rent you have to pay. ;)

Maybe they should, actually - I am surprised they’re not.

It's probably too complicated to verify. Zipcode and residence address are just easier.

Well - if they did then I'd start renting a much bigger/nicer place instead of the hellish in-law unit I have. (Cheapest thing I can find in San Carlos) After all - they're gonna pay me more then, right?

Here I come - $15000/month Woodside villa!

maybe they should pay your rent? or why not construct barracks for their employees?

Well, living with your parents is, of course, going to save you a lot of money. But you're living with your parents. I do wonder about the opportunity for fraud, though. I bet a lot of young developers will, all of a sudden, start living in their parents houses.

I have have worked as freelance contractor for most of my career. In my country 80% of decent IT people do this. We can demand higher income because our contracts only last 3 months so it's easy to lay us off when we are not needed (we have strong labor laws and employees are costly even on top of their salary). Due to this we can demand more salary too. My price goes up for short term prospect contracts, long distance of travel, I'm not particular interested in the project, ... In good times that works great but you better save some of that money for bad times.

I have build a good reputations so employers were ok with me working remote. So I could discount a bit as I didn't have to do long distance travel and because it was better for me. I also took the time to move to a lower cost of living country. Was nice, but the timezone was not that interesting.

Currently I don't work for my home country anymore. I work locally, apparently they pay well for my expertise here. Still I could edge out a few percentages more in my home country. But with the lower cost of living I still have more money in the bank at the end of the month.

If you can't do som form of paycheck arbitrage why would you move? Doesn't mean you need to have same salaries like you had before, you can take a small haircut. But just making the same as people locally? In my case that would be the salary I had when I just came out of school 23 years ago.

SV companies are evaluating their employee's BATNA. And if more tech companies are going this route, everyone's BATNA is decreasing. They don't want to overpay an "employee's market". It isn't just about the value an employee brings to the company when working in SV or the middle of Nebraska. It's turning into a buyer's market for tech jobs.

Many people would be/will be/are pissed when a company eliminates remote positions and suddenly require employees to report to an office.

Possibly, but I suspect the pain would be less if they suddenly started making 200% more money.

BATNA -- "best alternative to a negotiated agreement"

Seems like a weird take on what a salary is to me. I don't know if this is an American thing, and linked to the way your benefits work, like health cover. But I don't see my employer as having any reason to know where I'm located (beyond timezone issues for working hours), or what lifestyle I support with the money they pay me. My salary is based on what price the market will bare for the services I provide, what I do with that money isn't really any of their business.

Employers definitely need to know where you live to pay myriad of payroll taxes. if you lie, you commit tax fraud. It’s true virtually anywhere in the world - including all countries in Europe, not just US thing. You can often skirt law if you are small enough though - nobody cares about random web designer on upwork.

That has nothing to do with the salary-question though. You could separate that completely (and many do via contractors: nobody asks a contractor where they live to set a price for their work): have one party in the company negotiate the salary, and have another deal with employee locations as required by law. Those two don't need to have any contact.

So the taxes and accounting expenses show up on your salary statement as a negative line item?

Taxes would be one of the legal requirements, yes. They are required and have a valid interest (as in "who are you, and how can we reach you?") to know where you live. "So we can figure out how much we need to pay you" is not a valid interest in my view. You're not getting paid to live in a certain area, you're getting paid to provide X hours of your time each week.

I don't mean as like a privacy thing, I have no issue actually telling them where I live. I guess what I'm getting at is it feels weirdly paternal, like they feel like they're paying me to live in a certain level of comfort and they'll adjust the compensation to meet that level. Whereas I'd rather they pay me the value of the service I provide, no matter where I'm providing that service from. If there is no need to be physically in their office, then 40 hours of my time should be worth the same if I'm sat somewhere with high cost of living or somewhere with low cost of living.

If the scaling is proportional to cost of living I don’t think much would change. Why would an employee move away from a large city with amenities, culture, and the career advancement opportunities that come from being in an office for a drop in salary? The only advantage I can see to moving is if you’re starting a family and you don’t want to live in the city.

Facebook is basically telling its employees that they want them to come into the office.

Exactly. A more serious move would be "I'll cut everyone's pay by 20%, now go to live where you want instead of spending insane amounts in rent here".

Given that the difference between cost of living between the most and least expensive places in the US is in the $40,000 range, and salary drops are occasionally upwards of double that, no, the scaling is not proportional.

For example, I live in Montana. Most COL adjustments say that I'd need about $40,000 more a year to maintain my current standard of living, yet equivalent positions get about $100k to $150k more a year. If one of those poor folks in SF making $250k a year now wants to move to Montana, they can easily expect to be making $150k or less after they move.

Paying a salary based on someone's location is utter horseshit, unless they are an unskilled replaceable commodity. So at facebook, which is it?

It's as though people think that they are paid out of some kind of sense of paternalistic fairness. It's leverage, and if a recruiter can tell you "well the cost of living in your area is %30 lower, therefore your work is %30 less valuable" and you believe them, then sure, you are worth %30 less. If an HR person says, "our policy is we pay less in the area you live," you can respond with, "that's really interesting, my policy is GFY, because I work where I deliver value."

Employers do not pay for your time, they pay you for theirs, to shorten the period between their investment and the maximum yield it can return to them.

Facebook is no longer mainly solving growth problems, it is solving sustainability and optimization problems, and if you want do do that, you might as well go work at a bank. They haven't dashed the hope of paycheck arbitrage, they have just made a huge public commitment to inferior talent, and they deserve what they get.

> unskilled replaceable commodity

That's a weird way to look at "we pay you X because you'd work for someone else otherwise". There's a middle ground between that and "we pay you X because you create Y value for us".

Or in other words, if they have more people to choose from for a position (due to location being less of a limiting factor), they will be able to find someone accepting a lower wage. This is deeply unsurprising to me and has nothing to do with how skilled the labor is.

To frame it as companies paying people mainly as a way to impose opportunity cost on their competitors doesn't reflect the comment, normal economics, or growth. While remote work will flatten the market, it will flatten both sides of the market (employers v. staff).

When you invest in a business, you pay people to manage it and deliver a yield. If you invest in a business to prevent another business from succeeding, that doesn't make any sense unless you are a government or state captured industry.

If your skills and potential value is undifferentiated, sure, someone could undercut you, but if you have something of value to offer, price is much less of a deciding factor.

This will accrue many negative comments here. I have to say that I can understand the reasoning behind this. I think it’s fair. I would expect that they increase the salary if you move to a more expensive place.

> I would expect that they increase the salary if you move to a more expensive place.

lol

my last company was a fairly global fortune 100. Our intranet had a hard list of salary adjustments they pertained globally for internal transfers per site. if I moved from a low COL area to SF, I got a 15% raise. SF to my office took a 15% hit. the transfer ratios were all (internally) public knowledge.

>they increase the salary if you move to a more expensive place.

At the moment, they increase the salary if they require you to move to a more expensive place.

Why will they continue to pay you more if it's no longer required?

Does the value you create for the company depend on location?

I don't think it's fair for businesses to extract more profit from me because I live in a cheaper area than my coworkers

Cost of living and taxes are very real. CA income taxes are > 10%. Some states have 0% income tax. On that basis alone, CA employees should make 10% more than those places without income tax. Then there's cost of living, rent, etc.

You can legitimately earn more while being paid less by moving to a lower cost location.

Your salary isn't proportional to the value you create. It only has to be less than that value, but otherwise it's just determined by offer and demand.

Facebook is paying what it takes not to be outbid on hiring you. Currently that depends on supply and demand for the labor market you're in.

If everyone paid for value, Intel and AMD would be getting almost all of my salary.

People working remotely from Palo Alto are in the same labour pool as people working remotely from Eugene, Oregon... And the wierdo who lives in a goat farm in the middle of nowhere, Idaho.

The labour pool argument only makes sense if you commute into the office.

With remote work, everyone in the same country + timezone belongs to the same labour pool.

Companies that will treat the remote labour pool as uniform will trivially be able to outbid companies that underpay people in low COL areas, and overpay people in high COL areas. Why would I work for Gitlab, with its 0.66 COL multiplier for my town, and a 1.2 COL multiplier for NYC, when I could work for Foolab, which has an across-the-board 0.8 COL multiplier?

Given that situation, you'll quickly find that the only people working for Gitlab are people based in high COL areas. Instead of a money-saving technique, it becomes a money-spending technique, as they end up subsidizing employees relocating to the highest-COL areas.

At GitLab our rates are not based on COL but a market rate https://about.gitlab.com/handbook/total-rewards/compensation...

So as people are able to earn more in remote locations our rates will go up with them.

I think most companies will end up paying local rates https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-ra... so as more companies start hiring remotely the rates will go up gradually. I don't think think that there will be many Foolabs that pay one rate.

Market rate is, in reality, a close enough proxy for COL. I'm happy to use the two concepts interchangeably. My point still stands.

Any firm that will provide an equal across-the-board wage, that's significantly below market rate in NYC/Bay Area, but significantly above market rate in low COL areas will eat your lunch, in terms of wage competitiveness among the latter group. They won't hire anyone from the former group - but just being in the bay area does not make you a better engineer.

You'll be stuck paying expensive people in high COL areas, that are doing the same work as cheap people in lower COL areas.

Sorry, I made a mistake. I edited my comment to add "don't" to "I don't think think that there will be many Foolabs that pay one rate."

Why wouldn't there be, as more work goes remote?

Why compete on the high-billing end of the salary curve, when you can compete on the low-billing end of the salary curve, for the exact same quality of talent?

"We won't pay NYC wages, but we will pay the rest of you better wages than our competitors" is a great pitch to employees[1]... While being a net benefit to your payroll.

[1] Except for those living in NYC, of course. But you don't have to hire them.

That would restrict all your hiring to the lowest wage markets.

For some considerations also see https://about.gitlab.com/handbook/total-rewards/compensation...

> That would restrict all your hiring to the lowest wage markets.

The talent quality is the same.

Some of those reasons in the link are directly contradictory, some are nonsense, and others are inapplicable to other firms (But sure, they may well make sense for Gitlab.)

> A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team.

May be a priority for Gitlab, but that is not a priority for any firms that required people to relocate their butts to Silicon Valley, or that never supported remote work prior to Covid.

> Team members in high-wage regions having less discretionary income than ones in low-wage countries with the same role.

Seriously? Do team members with more obligations, like children enrolled in private schools, ailing parents, or overleveraged mortgages also get the same amount of discretionary spending as their less-burdened coworkers? Isn't choosing which zip code to live in discretionary? And why does this even enter the picture, when, as you claim, your wages are set by market, rather than by COL? The market doesn't care about employee discretionary income. There's nothing fair about market wages, just like there's nothing fair about the weather. They just are.

> Team members in low-wage regions being in golden handcuffs and sticking around because of the compensation even when they are unhappy.

This is an incredibly employee-hostile reason. "We don't want to pay you too much, because imagine if you ever become unhappy." Good lord.

> If we start paying everyone the highest wage our compensation costs would increase greatly, we can hire fewer people, and we would get less results.

This, however, is a fantastic reason. See my previous post on why it makes sense for a remote firm to not pay anyone NYC wages.

> If we start paying everyone the lowest wage we would not be able to attract and retain people in high-wage regions.

Why is this a goal of the firm? Scratch that - if that's a goal of the firm, that's fine. It's a weird goal, though. Companies typically don't go into business with the goal of attracting and retaining people in high-wage regions. They typically go into business to make a lot of money by solving problems for their customers. So, it's fine that this is a goal for Gitlab, but it certainly does not seem to be a goal of any company I've ever worked for, or am likely to work for.

You adjust wages up for employees hired in, say, non-NYC, who choose to move to NYC. How would doing so meet that goal? Is someone from Oklohoma who moved to NYC for a raise suddenly providing a diversity-of-skills-and-perspectives need that was unmet, prior to their geographic relocation? Are they now providing more value, that necessitates paying them more? If not, why was hiring in high-wage areas a goal in the first place?

> The talent quality is the same.

Before I relocated to the Bay Area, I had never gone on call. Never diagnosed a system by only looking at graphs of metrics it emitted. Never ran experiments against tiny percentages of production traffic. Never had to maintain consistency while failing over between regional datacenters. Being here did make me a stronger engineer, because companies here are earlier adopters with tougher problems, and the scale to make solving those problems worthwhile, and people who have been studying them. Maybe someday these experiences will be evenly distributed among remote workers everywhere, but right now they're concentrated in the strongest labor markets.

Thanks, I've made some small changes based on your feedback https://gitlab.com/gitlab-com/www-gitlab-com/-/merge_request...

People who relocate to hot labor markets are more invested in our careers than people who don't. Employers who pay extra to draw from hot labor markets have different problems leading to different skillsets. For better or worse, we're earlier adopters.

I think were you live will become a lifestyle choice. Today, you would not subscribe to your question if it was asked on different topics, like:

"Does the value you create for the company depend on the type of car I drive?"

That might sound provocative. But where is the real difference?

The change in salary is not in proportion to the change in an employees cost of living.

FB (and other companies, in all fairness) is saying "If the COL is half that of SF, your salary will be cut in half". Whereas the employee is looking at "I only spend 50% of my salary on living, the rest goes to paying off loans and investments", which results in a net loss in their after-COL loan payments and investment opportunities.

what difference does it make to work you provide for them?

by your logic they should have full access to your bank account to accurately adjust salaries based on your expenses, you ride Tesla? here is bonus for you. you ride ford? bad for you...

it's none of the company business where I live if I work from home and provide same results like anyone else

salaries based on location make sense only with on site jobs where employer has to compete with other employers in area and potential employees with other employees in area. with no such thing at work from home, the offered salary should be fixed strictly based on productivity/results regardless if you are frugal or wasteful and to be able to attract the talent compared to other employers

While tying paychecks to cost of living may appear to be equitable at a surface level, in reality you end up rewarding some workers who insist on living in an expensive area and, in a sense, force those who are willing to live in less expensive areas to subsidize their colleagues’ expensive lifestyles.

True but there’s a balancing dynamic in play.

Living in a high CoL area is an advantage to you because you win when paying fixed expenses and world rates.

Living in a low CoL area gives you an advantage because you will cost the company less and are more likely to get the job.

Big brain play is to find a company that has a policy like this and move up in the world.

Zuck can do whatever he thinks is “fair” but ultimately he has to deal with the realities of the labor market, which will change if remote works really catches on.

I'm sure Zuck doesn't know the concept of fairness and would laugh if someone would explain it to him. Words that Zuck understands are "efficient", "justifiable", "profitable".

> company needs to account for employee locations to avoid violating tax laws

Serious question: can some tax-savvy individual explain what the relevant tax laws are? How much could a worker's tax residence affect the corporation's tax liability?

Many (most?) taxes are state and local, as most services are operated at the state and local level. The most obvious example that comes to my mind is unemployment. Each state has a different unemployment program, and every employer must pay in a certain amount for each employee in the state.

If you live most of your days in Missouri, you are a Missouri resident and you need to pay Missouri state income taxes, and maybe local income taxes as well. If you/your company is paying California income tax instead, that's a problem for both of you.

There are no bright lines in residency law in the USA. You can potentially reside in one state for five months and the other for seven but be domiciled in the former. This is an area where you really ought to rely on professional advice.

And, if you live in a country that does not tax resident foreigners whose entire income is foreign, you pay no income tax at all. The only countries I know that do this cheaply are Costa Rica and Uruguay (the Bahamas have expensive requirements).

One technique is to not live anywhere more than six months but be a residency in one of those countries.

I haven't done this because I have kids and pets.. but it seems pretty awesome if you make a competitive salary (not Facebook!).

A lot of states have payroll taxes, which the employer has to pay for each employee working in that state.

It doesn't. The employer is responsible for paying taxes on behalf of the employee, i.e. income and payroll taxes.

This is the case in most of the modern world...

Only for w2 income. Or if they aren’t an employee, rather a contractor and earn 1090 income, then the onus is on the contractor.

We are taking about employees, not independent contractors...

But if you want to get technical, withholding does apply to contractors in international cross border situations.

In addition to the domestic state payroll/income tax issues mentioned by others, it's almost certain FB is also talking about the risk of creating foreign permanent establishments of the FB US entity from an international tax perspective.

> ...salaries will be adjusted to reflect the local cost of living.

So if the employee where to move to say Hong Kong where cost of living is higher will they also in turn increase wages? I think not.

If they keep a local address in some random apartment they never stay at but live elsewhere how would one check on that?

If you're willing to pay California taxes but live elsewhere I find it hard to see how they'd plan to enforce this. You could always argue you were temporarily traveling hence the local address you intended to return to and pay taxes at. Friends of mine do this, returning to the US every 6 months or so.

I read somewhere that they were talking about using the Facebook app itself to track remote employees whereabouts. Having trouble finding the reference right now though.

(See https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu.... about SNI.)

Is it required by law so the employer pays the appropriate payroll tax and abides by local labor laws?

I don't know how the US works, but in Canada I've had jobs where the employer took no taxes off and I had to pay them myself at the end of the year. I loved it, I can understand why many can't handle it though but the increase in cash flow actually increases your investment opportunities short term.

If this is true for the US too then Facebook is full of shit and using this as a weak argument for why they have to know if you snuck out of the city to go live in a cheaper area.

Yes, the location tracking (wether that be simply asking, or IP checks, etc) is mostly for regulatory compliance.

Salaries adjusted by region is pretty common. My employer does it. My wife's employer does it. Etc.

If we’re moving to a remote first world, long term it will flatten out salaries regardless of location, but short term, companies will stop hiring in expensive locations as much.

> Facebook also uses its own apps' to track employee locations, according to CNBC here one time using the data to find interns who failed to show up for work.

Is this legal?

> Facebook also uses its own apps' to track employee locations

Is this irony?

Cost of living adjustments should only be allowed to be applied if the location is directed by the company.

Are we going to see a exodus of high-income newly-remote workers to lower-income locations? This seems devastating to cities that have become dependent on the economic power these workers bring, but at the same time, it could bring new life to poorer areas of the country.

Nah it just means more gentrification in rich areas.

There's another half of this phenomenon that seems to get ignored. Yes, allowing remote work greatly increases a company's supply of potential employees.

However, if more and more companies offer remote work as an option, that means employees now have a greatly increased supply of companies competing for them as well.

The software engineer living in Ohio who doesn't have the option/ability to move to a tech hub like SF or NYC would've typically had to make due with the small pool of positions available to them locally, meaning less leverage for salary.

If more companies allow remote however, they can now work at any of those, and the local companies will suddenly be forced to compete for talent.

Does it work both ways? If so, here is a cheat sheet: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

Enjoy!

I'm pretty sure this would be illegal in the UK, the job pays what it pays and where you live shouldn't be a concern of the employer (the exception being if they base you abroad and you get relocation taken into account).

Anther exception being if you're a public sector employee, there are certain accommodations made for living in London: https://en.m.wikipedia.org/wiki/London_weighting

>Employees who attempt to wiggle around those compensation adjustments will be subject to “severe ramifications,” he said, as the company needs to account for employee locations to avoid violating tax laws.

>Zuckerberg said Facebook will monitor adherence by checking where employees access its VPN.

Do you think facebook employees respond well to these sorts of threats? Do you think I'll get a call from HR when I go visit my parents and log in from their house for a couple of days? I've got an idea, we can fit each of the facebook engineers with an ankle tracker like those guys on parole. Can't be too careful.

"You've been detected using NordVPN. You've been fired. Have a nice day!" - Push Notification from Facebook @ Home

A few days won't matter. However some states like New York have laws that if you're physically in state and working (remotely or otherwise) for more than 14 days in a year; you owe taxes on that income regardless of 'where' it's earned. And pretty much all companies that have people who travel around keep track of it so the taxes are properly reported and paid.

> [in NY] for more than 14 days in a year; you owe taxes on that income regardless of 'where' it's earned

Does that include overseas visitors? I think that legally we are not supposed to be working (for a company in our home country) while “visiting”, but having tax implications is another level of risk I was unaware of...

Plus, if I answer a work call from my country for 5 minutes, does that count as using up one of the 14 days?

I'm not into the exact details of it. Needless to say I got dinged on it from my own company due to traveling (for the company) into the state and had a chat with HR about it and it was explained out to me what was going on.

My guess is that for certain companies following the letter of the law is more important than others and report as they should. The state of NY may or may not bother coming after any company or individual they can prove had people in the area working in some capacity. In most cases I'm guessing it's not worth the bother but for large companies (like Facebook) it may be. So they want to know where their people are working from because it has tax implications that they may be on the hook for.

That is a help, thanks.

Even if the risk of being “caught” is small, it is still important to understand risks. If one does get in trouble for some other reason, then suddenly one can find the book thrown at them for multiple reasons.

I work at FB, and yeah, I'm not too fussed by this. Lying about where you are working from goes under the "don't be a fucking idiot" category, and I don't have much sympathy for idiots making life harder for their colleagues. Re "threats", location tracking of company equipment is pretty much a necessity to handle regulatory issues w/ geographies under sanctions (want to be an even bigger idiot? lie about where you're working from, and move to crimea!). Beyond that, internal systems also react to your location to do things like change the timezone displayed in UIs, adjust notification preferences, etc. HR having access to that data would be entirely unsurprising - if you're trying to defraud your employer, this is already in your threat model.

I'm not a FB employee but this doesn't faze me either. I would expect to be fired by any employer upon the discovery that I was committing significant tax fraud on my employer's income.

I'm just not used to your boss going straight to "We're going to enumerate all the ways we're going to fail to trust you, we've got no evidence you're going to do anything wrong, but we're still going to treat you like you are"

Companies: We are paying you as little as we can get away with. Sorry that is just how capitalism works.

Employees: Sounds good. We will work as little as possible.

Companies: Wait a minute here. We are a family and a team. You need to support the team and the mission, even if that means working extra hours without extra pay.

Reminded me of one conversation long time ago:

- We're offering you whopping 3.5%. How cool is that?

- Do I hear it right that you want my contribution to your company be 3.5%?

- Blank stare.

3.5% of what?

Don't employees try to charge as much as possible? You're acting like it's a moral and ethical failure that Facebook isn't a charity

it is absolutely precious to see software engineers wake up to the reality that they are, at the end of the day, plain ol' labor and are thus treated like labor when capital gets itself moving in a particular direction.

all of the attempts to rationalize this as fair or unfair are not useful - i'm guessing most SWEs will accept big salary cuts to work from wherever they want in the country. hell, a large portion of the SWE crowd is willing to distribute their labor /for free/ in the form of FLOSS, so i have no doubt that they will not hold the line in any sense if big tech starts implementing this in earnest. add to that fears of another tech recession (e.g. VC money drying up) and mean big tech SWE salary may drop a fair chunk.

anyway, on the plus side, there may be a large cadre of talent available on the cheap - seniors willing to work remotely on a more mission-oriented project from their bungalow in Ohio. so it's probably a great time to start a software company, or might be shortly.

> a large portion of the SWE crowd is willing to distribute their labor /for free/ in the form of FLOSS

FLOSS can scratch a personal itch, like gaming or other hobbies, while also providing something for the resume. (Assuming it's not embarrassingly bad.) Still, I'm reluctant to release my personal work that way. Now I do encourage my employers to do it for non-core functionality because it will make my future life easier, no matter where I work.

> hell, a large portion of the SWE crowd is willing to distribute their labor /for free/ in the form of FLOSS

that's an incredibly un-nuanced view of the economics of FLOSS. even at just a first approximation, if you consider the existence of Linux as a "fully fledged" platform to be of economic value to you, then participating in the advancement of that goal represents participating in an exchange economy, not "distributing labor for free".

and there are other ways in which FLOSS developers receive benefits from their work on FLOSS, too numerous to mention here.

Well SWEs are plain old labor and they’re compensated as such because big tech (and startups) recognize the value provided by productive SWEs. They wouldn’t be paying those astronomical wages unless the returns were about as high. I don’t think anyone is rationalizing that it’s not labor; it’s well compensated labor. The current high compensation was driven by the market: senior engineers get poached by startups with similar base pay but higher equity, so FAANGs raced to match that. Keep in mind that some of the FAANGs themselves were startups not that long ago and used similar tactics to poach labor from other firms.

To address what you’re really getting at though: tech comp could absolutely take a hit if there is depression that hollows out demand for technology based products. It could happen if the unemployment persists for too long or if the Government stops providing Unemployment benefits. Remains to be seen.

No one is arguing that SWEs aren't compensated fairly for the value they produce. What GP is pointing out is that labor in general is not compensated at equal to the value they provide (pretty much by definition), in part because most labor is more easily replaced in a more competitive market. GP's point is that this is just SWE's first taste of the problem that the majority of labor faces.

Huh? Have you been on Blind? SWE's know how the game works.

*SWEs who understand the value of being on blind know how the game works.

You're saying this like it's something new but _outsourcing_ has been a thing for decades. It has always been possible to get software built on the cheap abroad. You get what you pay for.

> You get what you pay for

This is hardly the case, speaking from experience as someone who hires programmers around the world.

There is no reason whatsoever why a programmer on $30k cannot compete in terms of productivity with a programmer on $300k.

Thats the 90s outsourcing model in a nutshell. It fails over time because it relies on a constant stream of good developers who don't realise their market value.

As soon as that guy realises he's worth $300k, he'll go get it on the open market and you'll need to find a new sucker.

The industry already used up the whole of India in the early 00's doing this, and by now they've scraped the bucket all the way back to Iowa.

The goal of the operation from our standpoint should be to get the rest of those remaining guys up to $300k. Not to resign ourselves to accepting $30k.

Why should that be the goal? Why $300k? That’s an enormous amount of money.

Also, the labour market is far wider than just India.

> As soon as that guy realises he's worth $300k, he'll go get it on the open market and you'll need to find a new sucker.

That’s an incredibly patronising take. I know that many programmers take higher relative income and freedom in lieu of a higher absolute income and the lifestyle typically associated with it.

Of course those people would rather take the $300k if they could work anywhere. That’s obvious. But who is offering that? Not FAANG, evidently.

Now the industry has access to talent from across the entire world, so perhaps the outsourcing model will come back. And these "suckers" are just applying for the best job they can land with their skills.

Can you point me to a consistent source of solid programmers who will accept $30k long term (keep in mind that hiring someone at $30k and having them quit after 6 months is probably worse than not hiring anyone at all) and produce as much as a $300k programmers? Though if you can do that you can also make a killing by setting up a software agency.

I’m not going to do that.

I will say though, that such astronomical salaries are only really the norm in Silicon Valley. And with that salary, you have to deal with the entire lifestyle that goes along with it.

Money isn’t everything, which many programmers recognise.

I don't think salaries that high are the norm even in Silicon Valley, unless you're counting "someone was hired with X shares in the company vesting over 4 years as part of their comp package" when those shares were worth $120,000 over 4 years when they were hired but are now worth $800,000. Which, while nice, is more a case of "stocks go up sometimes" than "companies are intentionally paying enormous salaries for people without exceptional skills."

Though I'm not actually in SV, and the last time I went on an interview circuit up there was 2015, so it's possible salaries have gone crazy since then.

If that were actually the case, there would be very very few programmers making $300k. Market forces (demand for talented software engineers) led to those high salaries. That's a tangible observation supporting the logic behind "you get what you pay for".

There are very few programmers making that kind of money, relatively speaking.

SV salaries are a statistical outlier in the global market.

In the global market, sure. American salaries in general for many fields are statistical outliers compared to the global market, even Europe.

Within the US however, while SV salaries are the highest, that's not the only city with 6 figure salaries as the norm for software engineers. Places like NYC, Boston, and Seattle have been there for a while, and Austin/Chicago/LA are close to, if not already averaging that too. This is especially true if you work for one of the major tech companies in those cities.

Go look at the salaries posted on www.levels.fyi in those cities and you'll see that SV is by no means an outlier when it comes to 6 figure salaries.

I doubt middle america is going to benefit much from this. Once a company has bitten the remote workers bullet there are far cheaper alternatives that hiring a SWE in Ohio. There are huge numbers of highly capable devs right across the border in college towns in Mexico and farther south in multiple South American countries. All on US time zones and working at a fraction of the price of a US developer regardless of their location.

True. Why hire an American dev for remote work?

Timezones. It’s hard enough scheduling meetings across multiple timezones (and boy are there a lot of meetings in FAANG), but going more than +/- 6 is a huge pain (I meet with east asia and europe on a fairly regular basis).

ggp is specifically talking about Latin/South American companies, which have approximately the same time zones as the US.

What makes you think people won't start working with US timings if they get enough money for it?

I have unironically considered moving to, say, Montevideo. It has better weather than where I live (India), is close to the east coast time zone, and I could very easily make much more than most SW jobs here by getting an Americas-only remote job. Only downside would be living far away from family, and having to navigate immigration when I'd not actually be working for an Uruguayan company.

Working on FLOSS is nothing like working for a boss. The common denominator is git commits but apart from that one is a self directed pleasurable hobby and the other is getting stuff done for a business.

Coders want good money because they realise the value to businesses and if their good they realise how rare good coders are vs. gen pop of applicants.

We are far from coders on minimum wages.

With so many jobs switching to remote work, what is to stop employees from simultaneously working multiple jobs at once? Not that they probably don't already, but it becomes even easier once many high paying jobs are remote. Plus, they can outsource a lot of it, so employees become mini software dev houses in their own right. Then one guy snaps up all the top positions because he is a 1000x developer due to his keen outsourcing sense. Etc.

Some non-compete agreements with binding-arbitrage by a employer-chosen arbiter. Employers will try to limit options for labor. Whether it's enforceable is another story.

Pretty insane, as if people were not doing same job regardless of where they choose to live. I understand you must offer competitive salary based on location when hiring for on site job, since workers and company is fighting against local competition, but at WFH you are literally fighting with everyone everywhere, so the salary should be fixed for everyone instead punishing more frugal people who choose to live in cheaper location.

Seems like there's still MASSIVE room for arbitrage, just maybe not as massive as what people were hoping for. I.e. as long as you live in CA (which is not uniformly unaffordable) it'll be difficult for Zuck to argue that you should make a lot less. The price differential between "half an hour commute to the office" and "two hours one way" can be pretty staggering.

I wish instead of trying to force us to live in one place because of geographic tax laws, we would talk about reforming geographic tax (and other) laws.

How would that possibly work without a world government?

Even in the case of just the US, how would that even work without a unitary, as opposed to federal government?

Fair point. Perhaps some things get more standardized across regions, like income tax, and other things stay geographically defined. A balance between standardization and localization.

But overall, I have no idea. Just seems as if government hasn't known how to handle very well things that happen across geographic boundaries. Maybe that's because government is geographically bound.

If I sell a digital file online, if someone buys it in Spain, Germany, France, and Italy, I have to collect and submit VAT at four different rates for just four customers.

I'm not sure what the answers are, just really hoping we start discussing this as a society, because things may become even more geographically independent.

(Some) government services and their beneficiaries are geographically bound, so it makes sense that the fundraising for such services is also geographically bound.

On the face of it, this makes sense. Some services will always be locally bound, because things like police or fire wouldn't make much sense at a federal level; why should someone in Billings have input on policing in New York City, or vice versa? Should someone in Cork have say on how Bucharest is handling garbage pickup?

Whether or not the current legal subregion boundaries (for the US, the states) make much sense is another story, but the Founders were of the opinion that the imperfect state borders would be preferable to having the federal government exercise complete control lest it fall into the hands of a tyrant.

I really like those points. At the end of the day, the local government charges money (taxes) to provide services (police, fire, etc), and yeah, many of those are like local businesses. Local people pay to receive local services.

I guess I'm just wondering if they have to pay for those local services through income tax and not some other tax (e.g., property, road, sales) that would be more local.

Just seems to me that income tax is local when someone is physically performing work at the place of labor (e.g., factory, store) and confuses me when it's done more virtually. I guess I technically work on my computer in a location, so then yes, where I physically type could be the location of income.

I don't know. I also think health insurance being state-based and employer-based, and just imagine the level of complications that HR will have to deal with.

It's reasons like this why I think the post-COVID death of the high-COL city is greatly exaggerated.

Because we live in a federal system, the definition of what is "locally" taxable and what is not varies betweens states, and at a global level this varies between countries (the US taxes global income, which is uncommon), and obviously these entities are not inclined to do things that would reduce their funding. Even if they could reduce some taxes and raise others to make up for it and the end result made "more sense", how to raise others is a big fight in and of itself, and so they usually don't go through the bother of debating all of this.

These types of debates have already happened to some degree; a lot of New Jersey residents work in New York, and the way the dust has currently settled is that New Jersey will credit income tax paid in NY by NJ residents. Not everyone is happy with this arrangement, and whether or not it is working optimally could be debated until the heat death of the universe, but it is a valid allocation of resources that is working at some minimal level. This will probably blow up now that remote work enables a nearly endless combination of jurisdictional fights.

Yes, i love these points especially the last one. With remote, it’s no longer just two neighboring regions but so many different possible combinations.

Your VAT example is wrong. You would not reach minimum thresholds for VAT compliance on the basis in a single sale of a digital good into a foreign country.

Ahh, thank you! Good point. I’ll change my rhetoric on this. I just checked the minimum thresholds and the lowest one I found in Europe was Finland at €10,000, with almost every country having a different threshold. So yes, unless it were a very expensive digital good, then one sale wouldn’t do it.

I think the logic still applies, in that when I sell it here from my home in the US, I’m supposed to track and monitor who in which countries are buying how much and then stay up to date on all the tax laws of all those countries.

My gut reaction was yes, world government.

But as someone else mentioned, these are problems amongst the US states even with a superceding government.

I'm starting to wonder if we'll ever have a government that is not geographically defined, and if so, what it might look like.

There could certainly be virtual, geography-free, government-like, organizations that would be orthogonal to local government. You could be a "citizen" of both maybe? One could imagine health care, professional services, etc in exchange for some taxation? You still need local gov obviously for roads, police, etc.

One might even argue these virtual governments make more sense than, say, employer sponsored healthcare.

Estonia has one. https://en.wikipedia.org/wiki/E-Residency_of_Estonia

Exactly! I mean, in a way, governments seem like SaaS, just trying to provide all services, with tax being the membership fee, some members being more subsidized by other members.

Geographic governments make sense for many reasons and yet it seems that virtual governments could provide other services.

I wonder how much the Cathloic church is similar to this idea of a virtual or rather, geographically distributed government.

Anyways, I appreciate you exploring this with me.

> some members being more subsidized by other members

Good point, another essential part of civilization. You might add though, that some citizen/users can contribute in ways other than fees: in communes/collectives, you might say contribute some professional services in exchange for virtgov ones. Although barter is still basically money, the virtgov can sell that work product outside, like a corporation, because the lines are fuzzy anyway.

yea, good point. Maybe that virtgov becomes really good at providing emotional healthcare to its citizens and another gov, virtgov, corp, or org wants to get better at that, it could provide training or consulting for a fee

I really like having different states and cities be able to make different decisions about the tax/service balance... some states and cities can have higher taxes and provide more services, while others can have low taxes with few services. People are then free to decide which type of system they prefer to live in.

I would hate to have to have only one single balance decided for everyone in the world.

I strongly agree! I liie the variations and local differences. The local decision making power. I don’t want it all to be the same.

I just think with the internet, while our bodies may be in one place, we interact with people from so many other places. For example, in this thread, I may be interacting with people from maybe 5 different US states and maybe 5 other countries. Which region’s law applies? The one where I am physically present? The one where the HN owner is registered? The one where the HN server is located?

If an employee lives in Florida but works for Facebook remotely, a company based in California but maybe registered in Delaware, which state’s labor laws apply to that employee?

Maybe these things are obvious to others and I’m just far behind on understanding legal jurisdiction, but I just think things aren’t so clearly defined as “local” anymore.

Maybe it makes more sense to tax land rather than income. That way we don't have to worry about where workers live at all. Whoever owns the ground pays the tax. If a worker wants to be mobile, that's fine, he indirectly pays taxes through the rent (or hotel bill) of wherever he chooses to take up residency.

Secondarily, consumption taxes are usually far easier to administer than income taxes. Identifying the "true residence" of a worker is a messy and arbitrary business. But in most cases any single good, service or product can usually be assigned a jurisdiction. The EU's been handling cross-border VAT taxes for decades with very few complications.

Economists have been telling us for centuries that Georgist land taxes and VAT taxes are far more economically efficient than income taxes. The only real advantage income tax has is that it's easier to satisfy our notions of fairness, in that rich people should pay higher rates than poor people.

That's harder to do when taxes are evaluated on a per-property or per-product basis rather than per-person. However a simple solution is probably just to create a UBI, handed out to every citizen no questions asked. Since a UBI is essentially a fixed "negative income tax", it makes the tax burden highly progressive, especially for the lowest income groups.

Whoa, I don’t know why, but I never thought of UBI as a negative tax, let alone a progressive one. But yes, if it’s a fixed rate, it would be progressive.

Have you heard any other critiques/opposition to what you proposed above?

I mean, this would require the federal government to step in and mandate the law, which seems to go against the American idea of smaller governments / letting the state decide. So you really have two options in the situation.

1. Federal government reworks the tax code and removes the ability of the state to control taxes.

2. State government maintains its ability to levy taxes which in turn means companies like Facebook have to know where people are working for the sake of taxation.

If someone chooses to live in a small town in the middle of the rust belt while earning wages far exceeding the local area, why should it be fair for them to avoid paying taxes to a city that likely needs them?

I see 1 being a really hard sell, even if the taxes are just income taxes and not all taxes. While some states don’t have income taxes, I’m sure others rely strongly on them.

In 2, I just thought that while a large company like FB may be able to navigate all the tax and legal implications of having employees in numerous jurisdictions, I wonder if smaller businesses will be able to compete. I mentioned elsewhere that if I sell a digital file online right now to people in four European countries, I have to collect and remit VAT at four different rates, which seems more menacing for smaller orgs than larger ones.

In your last point, I think people would have different opinions on whether it woikd be fair or not. I agree with you in that the wealthy should pay more, especially when the wealth gap is large. I’m not sure if income tax captures it that well, especially for someone who already has the wealth accumulated, and that consumption or property tax might do a better job, but I’m really not sure, I’m no expert in that.

This doesn't make any sense... if my city needs to raise money to pay for a new police station, who should pay for it? With geographic taxes, you can tax the people who live there and are going to benefit from the new station.

If we had no location based taxes, how would you raise the money? Would each city get an allowance from the world government (which would have to be the one collecting taxes, or else it would be 'geographically based')

Maybe I could have been more specific. I'm not talking about getting rid of all geographic taxes, but just thinking about which ones still make sense in a more remote work environment, especially as it relates to income tax but also maybe sales tax when people buy things over the internet.

That being said, you've helped me think that different types of taxes are just stories we make up to get payment from a group of people to provide that same group with services.

Maybe it doesn't matter if one actually earns that money in that location, but they are living there and earning money in general and if they want to continue to live there, they need to pay X% of their money for the services.

> The company, one of Silicon Valley’s biggest employers, is giving U.S. staffers who are approved to work remotely until Jan. 1, 2021 to update the company on where they plan to base themselves, at which point their salaries will be adjusted to reflect the local cost of living.

So it’s about maintaining control over employees, not managing company expenses. You may be this successful, no more.

But salaries aren't a living allowance for living near the office, they're what you negotiate with your employer as compensation for your work.

It's your business whether that's a lot or just enough for where you live.

If your company cuts your pay because you moved, even though you already worked remotely with the same working hours, you have some deficiencies in your relationship to work out.

If facebook employees can't figure out some way to... I don't know, "Connect with friends, family and other people you know. Share photos and videos, send messages and get updates" they'd be able to organize and solve their problems.

There's an incredible power in "No", but most of us aren't French and know very little about how to handle kings.

I wonder how that salary adjustment will actually play out. If they drop salaries to location average, they'll still have to compete with other companies (and not just local, many other remote jobs too).

You could work for Initech in your locale, or FANG remotely, and the salary would be the same. Would Initech have to raise their pay, or would the FANG jobs suddenly be too demanding for what they pay?

> Employees who attempt to wiggle around those compensation adjustments will be subject to “severe ramifications,” he said, as the company needs to account for employee locations to avoid violating tax laws.

I guess it depends on the state, but if you decide to not have any taxes withheld from your paycheck and just make quarterly tax payments, then is particular assertion true?

Confused why remote location matters for pay (from a tax/legal standpoint, I understand it from a cost of living standpoint).

I work for a company that has remote workers all in different states across the US and they (developers) are all on one shared pay scale without different pays per location and they just pay state taxes in whatever state they choose to live in.

Bit of a bummer - This is precisely what I was doing pretty much my whole tech career:

First landed a job in California, turned it into a remote gig, and then all jobs thereafter were remote with either NYC or SF pay while I bummed around in very LCOL places like Bali.

Already moved on to other pastures, but a bit sad to know that fallback isn't there any longer. Ah well.

The warm, sunny states with affordable housing and zero taxes will see an influx of educated, rich workers. States will need to cut taxes to keep up,”

Or maybe, just maybe, the zero tax states will need to raise taxes to support all the infrastructure costs that come with a growing population? High tax states aren’t high tax just because...

will be interesting to see the salary hacks employees come up with

How can/will the employer check whether the stated location of its emloyees is correct?

This is indeed a complex categorisation. What really defines my location in relation to remote work? Since I’m not bound to one physical location anymore I can split my time between different places. I might move every 6 months, what then?

VPN to a computer, on a cable modem, that is physically located in SF. Make sure to never use your personal phone to check email.

State tax authorities have dealt with these questions for decades. There are well understood answers.

Still, working remotely hasn't been around for decades, is it all so straightforward? From an EU perspective I can assure you it's a deep mess.

People have a different, long-term relationship with the tax authorities because 'you're not going anywhere' and this makes it possible to settle at a later time. Also tax authorities take action in retrospect specially because things are difficult to prove on-the-spot, but Facebook will need to pay you next month and next year you might be working somewhere else. How will they be able avoid over/underpaying you?

https://www.bloomberg.com/news/articles/2020-05-12/stranded-...

Become a contractor with a local office in Bay Area?

I'm guessing people will live in cheap places that are considered to be in the same region as expensive places. For example: live in Tracy or Fairfield or Hollister while collecting a bay area salary. Or live in Vancouver, WA while collecting a Portland salary. The latter is especially enticing as Washington has no state income tax.

In the long term though, if companies go remote I don't see how they can continue to have salaries based on cost of living. In a hypothetical perfectly frictionless economy with perfect competition, companies that pay salaries based on the value contributed by the employee would be more efficient and outcompete those that paid based on the employee's expenses.

People really do commute from Tracy and Vancouver today.

Your expenses don't matter to employers, but if the industry goes fully remote we'll no longer see labor markets with shortages and higher offers.

The number of engineers isn't changing. If a bunch of engineers leave silicon valley, and some companies decide having people onsite is still critical, the bidding wars for the engineers who remain goes higher. All in all, I don't think much will change. If engineers refuse lower salaries, they simply won't leave the bay area -- keeping things in aggregate as they currently are.

And so it begins, the downsizing of sillicon valley level salaries. Soon enough, they will be encouraging remote employees to move to inexpensive locations. Then they will start evaluating whether employees who come to office need to be there or can be encouraged to go remote.

One way I've heard the company thinking explained is replacement cost. When a valuable employee gets a better offer a company suddenly may be willing to pay more for the same person, regardless of location. Now if they can replace that person without spending more then they will.

There is no loyalty.

This is an issued that existed before COVID-19, more so now.

Here's the thing: what prevents someone from moving after taking a job that allows for "remote work"? And - more importantly - what would be the repercussions should someone be found out?

My guess is that the risk is worth the money.

As someone who is considering asking for the first time to move out of my high CoL area to be fully remote, does anyone have any advice on what to expect and how to navigate said conversation? It’s a bit nerve-wracking to think about and I want to be best prepared.

To be fair, you should be getting a proper adjustment for working from home, because the cost of the office is now on you. You use your own chair, desk, computer, living space, etc. So a % of your rent monthly + few $k on start as a care package.

I wonder what the granularity is? Can I move to a WA area with middling CoL and benefit from that Seattle-derived salary bump? If they take issue you could make the claim that you would normally commute to Seattle so you deserve the Seattle remote rate.

You can even rent a trailer in the Seattle area and hire lawyers to explain you how to game these rules in the most legal way. When 500k/year are at stake, employees will be very creative (and, afaik, they are hired precisely for their creativity and outstanding intelligence).

So basically employees outside the valley subsidize the rents of those that decide to stay. Who's gonna fall for this?

Using their own app to track their employees' location sounds very dystopian, and potentially complicates the lives of employees without a clear location but who have established a residence for tax purposes.

Until FB publishes how they'll set wages in different locations, discussion about the policy is pretty much useless. Since the actual policy is unknown.

Not that that has ever stopped an online debate before :)

I’m struggling to see how this will promote remote work arrangements. Perhaps that’s the exact intention? “If you think you can stop coming into the office to save time and money we’ll cut your pay”?

Location-based salaries is offensive and just plain wrong. Monitoring where employees login from, so the company can cut costs, seems typical of a company like Facebook.. but still makes me mad.

I'm thinking why not move to Hawaii or a beach town 1hr - 2hr north or south of Santa Monica CA? Quality of life will improve vastly for those who can afford to do so.

Ultimately if you’re working for salary your pay is at the whim of your employer. If you want to make real money as a remote worker then switch to consulting.

I'm surprised FB would need to ask workers to provide this information given FB usually knows more about an individual than the individual does.

Locality Pay if standard. The federal government had been doing it for decades. Base pay plus locality adjustment based on where you live.

It says quite a lot about Facebook's culture and employees that they felt the need to be so explicit and public about this issue. Normally, this would be talked about on an individual basis, or an internal HR memo once it was determined there was an actual issue.

At Facebook, they apparently are so worried about their employees lack of ethics as a whole, they felt the need to just immediately threaten the entire company. From what we all know of Zuckerberg and Facebook, this shouldn't be surprising, but it's amazing to see it confirmed.

Facebook employees should talk to their union about this.

"...because at the end of the day, do not pay the employee any more than absolutely necessary." - Facebook Executive, probably.

What if I work in San Jose but life in a van? Why do I get a high salary but someone in a house in Ohio gets a lower salary?

I bet this is a thing a union would help with!

Easy- don't work for facebook. I have worked inside and outside the valley and never had a comp change

What's the problem? Leave Facebook and join another company that doesn't apply such stupid rules.

Still win-win depending on how much they scale.

$50k/year in Thailand or Vietnam is way more luxurious than $200k in SF.

Agree with foreign destinations, but I assume any adjustment within the US will be a net negative for the employee since its mostly housing that impact COL.

A 1 bed in SF is $3,000 and say $1,500 in NC. That’s $18,000 post-tax or $24,000 per-tax.

If FB lowers your salary from $200k to $175k (not a big jump), you’re down a net $1,000 per-tax.

Yes, but in 5 years, who has the option in living in SF?

How will this work for digital nomads? Same as wherever they pay state taxes, I guess.

So, employees can move to rural, inexpensive parts of northeast California?

So no working for Facebook and moving to Vietnam to live like a king then.

A nocturnal king, that has to work midnight to 8am to keep up with the rest of the team, if that’s your thing :)

I lived like that for a month (working on a fully remote company, but the majority of the people were on US timezones). It’s not for everyone.

Does this apply to both managers and engineers?

So there are going to be 20,000 engineers with their home in Malibu through a dead drop address and living almost anywhere else.

What bout the tracking of phones and laptops? You'd have to have your laptop with a remote desktop software or something like that.. or to spoof the GPS and make sure you connect to an anon wifi that is not sharing its position.

Someone who's paid 400k can afford to buy a bunch of phones and laptops, install whatever survelliance software on them and leave them at a rented trailer.

Some friends of mine who live in NYC are actually considering "renting" their addresses for remote employees who get shafted like this.

From my perspective, it's the same as registering your business address in Delaware to take advantage of their low tax rates.

Watch as companies start lobbying to make this illegal.

It probably is illegal due to issues with taxes. If I put my address in Seattle,wa but i am residing in Astoria, Oregon. I owe Oregon income tax

Just route all your work through your home in Seattle!

For tax purposes, that is already illegal. I.e. most (all?) states determine your residency based on where you actually sleep a majority of the year. My guess is that FB will base it on where you claim residency for tax purposes, so if you lie about it you're committing tax fraud.

No.

So many people seem to think they've come up with clever workarounds to tax laws. It's almost never true.

What stops one from paying the difference at the tax returns filing?

In a round about way, is this not already illegal? If I live in Ohio but I represent myself to my employer that I live in NYC, am I not committing state income tax fraud against Ohio? NYC would probably love this since people who don't live in NYC and don't use its services pay NYC taxes, but Ohio would hate this because the person lives in Ohio and pays no state taxes.

EDITED: Also, you could not get a driver's license in Ohio since you have to live there to get one. Forget about registering cars, owning property and paying for anything with a credit card in your own name.

You have a lot of arbitrage to play with just inside California.

Oh yeah just go online and search for houses under $250k. A bunch are out in the boondocks with bad internet, but not all of them.

One hopes lawmakers would let it continue for irony's sake

It's already illegal to lie in a contract. It's called fraud.

It seems pretty unwise to defraud your employer like that.

Why is it defrauding though? They want to lower your salary despite you having proven that you're worth that salary.

Because by doing this you have misrepresented the truth in order to extract more money from your employer than you agreed (presumably, in your employment contract).

(As I commented elsewhere, whether you think paying by local cost of living is the right policy is valid to debate but isn't the point here.)

Because it's lying. That's what fraud is. "But I had a good reason for lying!" is not a defense.

It's weird that you have to explain that lying is wrong to full grown adults

Yuuuup.

Come on, this is just ridiculous. "Why can't I lie to my employer in a contractual agreement if they did something I don't like?"

I mean, the vast, vast majority of FB employees can easily get jobs with other companies. If you don't like it, leave.

despite you having proven that you're worth that salary

An employer never pays you what you're worth, they pay you the lowest possible salary they can get away with.

Did you prove you’re worth the salary or do they just have massively inflated salaries for everyone in a certain west coast US city because A bunch of huge technology companies failed to realise computers and the internet exist outside of said city and remote working is a very workable thing.

I’m not saying they should drop your salary if you move, but I also don’t think a lot of people hired at typical SV rates are actually worth that much, so much as they can’t afford to live there if paid less.

Proven that you are worth that salary in a given city. As tech companies realize they are no longer tied to SV they will also no longer have to pay the same high salaries to attract the large but overall still limited talent pool in this geographic area.

For every SF developer there is probably a just as good developer in Boise or Belarus willing to do the job for much less. Why should a SF developer who moves there make more?

People are worth a lot, but they become worth less monetarily as the talent pool grows in size.

Ignoring any potential ethical questions, I wonder how that works for state tax purposes?

I’m pretty sure you pay taxes to the state you physically are in while doing the work.

So if you leave NY temporarily and work remotely from FL you will no longer have income tax while you are in FL.

But then you have to prove to NY that you were in FL. States like NY and CA will claw every dollar they can from you and if they see you're getting paid to an in-state address, good luck proving you weren't actually in-state. You likely won't be able to get back the money your company automatically deducted from your paycheck.

Not tax advice, so consult your own professional preparer:

NY state has first dollar claim if your employer says your job is in NY regardless of your physical address. If, for example, you live in NJ but commute into NY, you’re paying NY state tax with no opt-out. NJ credits residents for NY taxes but then gets their money via property taxes.

NYC is even crazier, with part time residents going so far as to take daily pictures of themselves with local papers to prove that they reside outside the city more than half the year to avoid NYC income tax.

They end up having to pay NY state taxes since that's what your employer is reporting.

You pay state taxes based on where you actually lived, not on where you say you lived, not on where you identify as having lived, not on what you perceive to be your main residence, and not on where you own a PO box. You pay state taxes based on where you actually lived, as in where your physical body was in space and time. And your employer obviously has this information for tax withholding.

NYC in particular might not be a good location for this, since if your W2 lists NYC you are subject to three income taxes (fed, state, city).

Seattle would probably be a better choice, as a high-wage, relative low-tax city.

It'll be tricky for employers to enforce too - surely you'll have people who "live" in SF but travel 60-70% of the time to Colorado.

Flying back to the bay for 2 days a week is probably a reasonable CoL arbitrage if you only need housing for 2 days.

No one registers a business address in Delaware to take advantage of their low taxes. Companies, like people, must pay state and local taxes based on their physical location.

Right. Delaware is attractive for their business-friendly legal environment.

> From my perspective, it's the same as registering your business address in Delaware to take advantage of their low tax rates.

State tax authorities do not share this perspective.

I would imagine that because the company is withholding (and reporting) tax at a state level, you'd have to end up paying tax in whatever state you were claiming to live in anyways?

One of my pet peeves is misuse of the term arbitrage. It in no way applies here.

Sarcasm on Offshoring is only allowed for corporations, not for employees. What did those pesky peasants think? Sarcasm off

stage of grief: denial

Is there any transparency on how "a moderation downweight" works? It sounds like a useful feature, but what does it exactly do, and is there a public log for these types of things.

Here is a prior discussion of this issue by dang: https://news.ycombinator.com/item?id=23286685

A rather interesting reply.

I'm surprised dang seems to believe communities don't self-enforce overton-window-esque acceptable norms of speech and behavior.

I'm not an expert by any means, but I believe that at this point there is some evidence that online communities actually do exactly the opposite.

https://journals.sagepub.com/doi/full/10.1177/01925121176921...

https://techcrunch.com/2017/09/11/study-finds-reddits-contro...

Sometimes. As is often the case, there is evidence for both (banning/limiting, Chilling Effect, power pressure & scolding, etc), depending on the community.

In your second link, the topics were literally banned from the platform, rendering the question moot in that case.

> I'm surprised dang seems to believe

He's been moderating this site for nearly 8 years, and frequenting it almost daily since it first launched in 2007. We can reasonably expect he's learned a thing or two in that time.

Nothing I said suggested he hasn't learned a thing or two.

My comment was regarding this portion:

> I fear this outcome, so we've always shied away from adding such a system. We do want to be transparent, and we answer whatever questions people ask, but it feels safer to do it ad hoc as questions come up. There's no specific question you can't get an answer to, other than a few special cases like how HN's anti-abuse software works.

> There's an opportunity cost issue too. The vast majority of the community is pretty happy with how we do things—I know that because if they weren't, we'd never hear the end of it, and then we'd say sorry and readjust until they were. I think it makes more sense to do things to keep the bulk of the community happy, or make them happier, than to pour potentially all our resources into placating a small minority—especially since, once you've done this job for a while (say, a week) you know that nothing you do will ever be completely right or please everyone.

Do we deny that peer pressure or herd behavior exists in the real world? Perhaps they are less powerful in forums, but the idea that they do not exist at all seems fairly extraordinary. If every comment a person makes is downvoted, or they are accused of racism or being responsible for widespread manslaughter, and disagreeing with such claims results in discipline for starting a flamewar and nothing for the bully with an overactive imagination, should it be surprising that most people fall in line? What does history tell us about people conforming to societal norms?

Everything is perfect, or not, or somewhere in between. But anyone who claims to have accurate knowledge of how it is because of what they observe, has at least a thing or two still remaining to learn about the nature of reality.

A moderation downweight simply lowers a post's position on the page.

Plenty of past explanations at the links I listed in this recent comment: https://news.ycombinator.com/item?id=23294867.

We don't have a public moderation log (see the thread alexpetralia linked to, or https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...) but we're happy to answer any particular question as it comes up.

(I've detached this subthread from https://news.ycombinator.com/item?id=23295278 to minimize the off-topicness at the top of this page.)

That's SNI for the article, but not Significant New Discussion in the comments.

I always wondered though, why not let these flamebait discussion topics stay up as a Honeypot to keep the other threads cleaner?

I don't think that's an accurate model of how flamewars work. The fire analogy is better: if you let them burn they spread. Worse, they evoke worse from others, and if allowed to persist, they lower the norms of the community. I'd throw the broken windows theory into this metaphor soup also.

(I've detached this comment from https://news.ycombinator.com/item?id=23295278 to minimize the off-topicness at the top of the page.)

Btw you're largely right about the discussion not being significantly different, and (more importantly) about that being the key thing to look for. This is not widely understood! However, my posting that and pinning it to the top of the thread did lead to a wave of comments about the SNI, which was the intent. Maybe the discussion will shift a bit in that direction.

I like that acronym, partly because it really is a specialized concept that deserves a pseudotechnical name, but mostly because it's fun to say "snee". SNI SNI SNI.

It's also "Server Name Indication", the piece of TLS that allows a single IP to serve multiple hosts by having the client signal the name they're requesting, and also "Secure Networks, Incorporated", my first dev job. You could just call it "snee!" (I advise the exclamation point as well), whimsically, and let people just deal with the weird etymology.

It's a big site! You stand a decent chance at introducing a new word to the lexicon!

There's something to be said for casual, no-explanation, no exclamation point use of 'snee'. It suggests to readers they just happen to be unfamiliar with this common internet term like the sort of people people who don't know 'scrome' is 'chat backscroll you don't intend to read'.

https://www.urbandictionary.com/define.php?term=snee

That's so dumb; the funniest phoneme in the word "sneeze" is the one with the "z" sound. It should obviously be "peeze".

Another reason to just use "snee" here, to reclaim the word.

Who on earth actually wants to work for a company like this?

Someone who wants to make 400k-500k and will do whatever (legally) to achieve that.

Wait. Facebook pays 400-500k a year? I saw $155K average in NYC

Show me the links to the job openings lol I am curious

That's their total comp including RSU if you rise the ranks.

1. That's base pay. Stock is another ~20-40%. Bonus is another ~20%.

2. That's pay for an engineer. Juniors get ~30% less, seniors get ~30% more.

3. Senior is attainable by most people, and will get you ~350k all-in.

4. The next level is not attainable by most people, but will be getting you ~450k all-in.

It depends on your level and is total comp, not just base salary.

https://www.levels.fyi/company/Facebook/salaries/

Here we go again with this thread (dang was talking about HN cliches above)...

My friend is an intern at Facegoogle and is making 800K a year, excluding bonus. But my friend working a prop trading shop, with two years experience, is making 2M in a good year.

A company that obeys tax law?

I'm not being facetious. Companies face significant legal liability for not paying taxes correctly, and they have to ensure that all applicable federal, state, and local taxes are correctly being withheld and reported for their employees. They can't just look the other way and blindly allow employees to evade tens of thousands in SALT taxes annually.

There are plenty of companies who have remote workers and don't use apps to track their location.

The difference is that those companies typically can trust that their employees will tell them the truth about where they're living. Facebook has set up perverse incentives given that disclosing your actual location might end up dropping your salary; that means that an employee might end up being taxed incorrectly because they don't want to disclose their location.

Lots of remote companies pay based off of location, and again don't require tracking. What makes facebook unique?

It has a much bigger target on its back.

That’s a straw man. The real question is why do they have to lower your salary if you move? Is your work less valuable?

No, but once you go remote your competing against a much larger labor force. You might have been in the Nth percentile of local labor but now anyone anywhere can be your peer.

I agree. This type of action is signalling the company doesn't actually pay you for your knowledge or output. It pisses me off. Flip the argument around; if FB hired you to work remotely from Montana, then you decided to move to San Francisco, would they INCREASE your pay based on COL?

If the answer is "no, of course not", then why is it okay for them (or any company) to pay you less, if you move to a lower COL area? It absolutely isn't fair, and companies want to eat their cake and have it too.

> if FB hired you to work remotely from Montana, then you decided to move to San Francisco, would they INCREASE your pay based on COL?

If you actually transfer to an SF team then yes, most large, multi office companies would adjust your pay to the SF bracket. If course that requires that an SF team has headcount and wants you. You can't just move because you feel like it.

Facebook absolutely would increase pay.

https://twitter.com/sebmck/status/1264057310021685248

At my employer if you were hired in SF and moved to Montana, you'd take a pay cut. If you were hired in Montana and moved to SF, you'd get a pay raise. Either one requires approval.

I'd be surprised if this isn't the norm in companies with a distributed workforce.

> This type of action is signalling the company doesn't actually pay you for your knowledge or output.

And you win the Nobel prize for stating the obvious.

Tech salaries today in hotspots like Silicon Valley are probably on the order of twice what they were in the early noughties. Why? Because everyone’s so much more productive these days? Or because that’s what the market dictates?

At the company I work for, HR defines pay bands based on the HQ location and there's a % modifier based on where you live. So yes, if you move to a higher COL area, you get paid more. If you move to a lower COL area, you get paid less. Honestly, I thought this was a normal and uncontroversial practice until this.

Frankly, the calculus of your pay probably depends a lot less on your knowledge or output than you seem to think. Geography and luck play as large of a role.

Devil's advocate here, I don't personally think a company should adjust pay based on location and tend to agree with the thrust of your point. But one might think of it as FB (or whomever) paying an employee enough to live up to a certain standard of living/being able to save money in their given locale, rather than a strict salary number. Because that number is different depending on locale, it would make sense to vary it based on locale. X salary allows one to live a "good life," being able to go out regularly, afford luxuries, live in a nice place in a nice area of town, in San Francisco. X salary * .7 (or whatever) allows the same lifestyle in Cleveland. Your work isn't devalued, you're getting the same lifestyle.

I tend to think I should be paid X and should I choose to live in a more expensive region, that's the price I pay for choosing to reside in that region. If I decide saving million dollars is more important to me, then I move to Cleveland, maybe don't have the same scene as SF, but am able to save more, my choice.

Company should pay me X money for Y hours of work. Company should never care where and how I live. If I move somewhere cheaper (and can still do the same job as before), is my work worth less?

No, but your pay has little to do with what your work’s worth. That’s a contributor, but the most important factor is the market, by far.

If you move from an SF office to an Austin office, do you think you deserve to be paid more than your Austin coworkers? Is your work somehow more valuable now that you've moved?

Good question. I’d actually say everyone should be paid according to their value to the company. Why should the company get to save 100k just because the employee lives somewhere cheaper.

Great, if you agree that everyone should be paid according to their value, then we can go ahead and drop salaries by a good what, 40-50%? Since Silicon Valley (and many other tech hubs) has resulted in massively inflated software engineer salaries due to the high COL rather than any actual demonstration of performance.

Why should people in SV earn 120k+ per year over someone out in the rust belt doing the same work at 50-60k a year?

You're welcome to start a SV company offering rust belt salaries, but you probably won't hire anyone good :-D

I don’t follow. Companies wouldn’t pay the high salaries if it didn’t provide greater value to the company. They’re not charities.

The counterargument is that it's not the same work because you can't abstract the work away from where it's happening and who it's happening in proximity with. Now if it turns out that location and colocation don't matter like people thought they did, then we're about to see a major shift in this disequilibrium, of the sort you describe. It's not as if companies want to be paying that extra 50%.

It's not a straw man at all. It's in Facebook's vested best interest to prevent tax evasion of its salaries by its employees regardless. This is completely independent of whether salary is location-based or not; the tax fraud temptation is always there and it could pose real problems for Facebook if it were occurring en masse, perhaps even with tacit knowledge by many employees (i.e. teams chat amongst themselves).

Paying remote workers based on the market rate for that work done remotely rather than arbitrarily applying location-based adjustments when the location is not germane to the work would not create a financial incentive to misrepresent location that would require the company to threaten severe consequences to gain compliance. The compliance problem Facebook is using dire threats to mitigate is wholly a consequence of their own arbitrary and irrational pay policy.

It's not "arbitrary and irrational" to pay market rate salaries.

The real question is "what is the market?" Historically, with most people working in physical offices, markets were very local. If you lived in Boise, ID you could mostly only get a job in Boise, ID.

To the degree that remote work becomes significantly more common, I would expect those geographic barriers to break down some: salaries in the bay area and other high COL areas might drop some, while salaries in other places might rise some. I wouldn't expect complete equalization for quite some time though. Though that's just a guess. Predictions are hard.

In the end though the one thing I'm sure of is that companies will do what they've always done: pay the market rate to get the labor they need. Questions of fairness are basically irrelevant.

They aren't paying market rate salaries in the market (remote work) from which they are purchasing. Nor are they even paying market rate salaries for local on-site work in the workers actual location, though that would cause the same problem as the actual policy. They are paying salaries based on a common base with cost-of-living based adjustments for the location of the employee’s residence. I bet if you chart BLS data for IT salaries against cost of living you'll find that this (as well as creating the same kind of incentives for deception about location as ignoring that remote work is a different market than local work does) that a system of CoL based adjustments doesn't map very well at all to local market pay.

Strangely, I already see this breakdown. Especially for senior talent.

Excluding the FAANG companies, I see offers in SF consistently for 160-190K for most startups.

And I've seen similar offers here in Nebraska - Omaha, even Lincoln, for a similar level of salary. Obviously less offerings, but they are there.

There already is a financial incentive to misrepresent location regardless of whether Facebook is paying the same by location or not: locations themselves charge different tax rates, and there is a big temptation to say you live in an income-tax-free state and locality even if you do not. So this compliance problem exists regardless.

Facebook has a big target on its back here, and it would be terrible press and regulatory scrutiny if it came out that a large number of employees were evading state and local taxes by claiming false residence. Facebook can do some basic due diligence here to prevent that from happening.

This is wage discrimination. The problem is that it is, so far, legal discrimination.

If an employee gets married, is that a legal reason to cut their salary? No.

If an employee has a child, is that a legal reason to cut their salary? No.

If an employee comes out as gay, or updates their gender identity, is that a legal reason to cut their salary? No.

The first two could logically be tied to decreases in productivity, but even if it did decrease a workers productivity you can't cut their salary. It's illegal.

So what's the real problem here? Taxes.

Let's say that we correctly argue that the product of ones output should be compensated at the agreed upon rate and that if efficiencies of production are found by the producer they are under no obligation to 1. Disclose that fact or 2. Pass on savings to their customer.

Despite the fact that this is logically and economically sound the reality is that legislators will balk at legislation which would make their state less economically attractive. Convincing them is not an impossible task, but it's a hard one.

The principle of "equal pay for equal work" is not naturally embraced by industry. Almost any distinguishing characteristic that could be used as an excuse to reduce wages has been used to do so. Laws championed by labor movements have been the only way to curb the natural tendencies of companies.

So is it normal and natural for a capitalist CEO to take this position? Yes. The moral and logical ramifications have little power. It's only when those ramifications are instantiated by law advocated for by impacted populations that we should expect change.

If you think this is illegitimate wage discrimination I have a question for you, if you order coffee in bumfuck idaho, do you pay the barrista, who does the same work as one in Palo Alto, the same price for their coffee?

This is not a valid analogy. There are two decisions

1. Do I pay the price asked?

If I'm in Idaho and I want coffee and they are asking for Bay Area Starbucks prices the answer is "Yes." But that's because I'm used to it, and its not the point. The question is:

2. If the store buys a machine that decreases their costs by 20% am I entitled to demand a lower price?

No.

Entitlement has nothing to do with it. If there is a machine that lowers the costs of production by 20% the price will drop, because there's now an opportunity for competition to drive down the cost of coffee. That's how things become more affordable in a market economy.

And this is the actual point of the analogy. When people can suddenly work from locations that have lower costs of living, then the cost of labour drops, that is to say more people are willing to do the same work for lower wages than before. That means that firms can purchase that labour more cheaply.

Nobody is entitled to anything here, the price discrimination is simply the result of the market correctly allocating resources, and that's a good thing, because it really does not make much sense to hand surplus profits to starbucks or to tech workers.

One very simple reason why the latter is really bad, if a lot of tech workers suddenly sit in regions with lower costs of living their high salaries will rise the costs of living, creating a huge problem for all the people in the regional economy who don't work at Facebook.

if they deliver me same coffee through email then yes, I'd expect both coffee to cost same since i don't really care where they make it, i just want coffee same as employer should care only about productivity of WFH employees

Bay Area salaries are partly about location to begin with. This seems obvious, so I'm surprised by arguments that assume the contrary, usually in the form of "my salary reflects my value to the company, which doesn't go down when I move". The antecedent is a false assumption (the salary doesn't just reflect the employee's value to the company) so the argument is invalid.

Have you ever heard of a pay scale? Why on earth would you pay a senior engineer more than a junior engineer unless you believed their value to the company was greater?

My comment already answered this, that's why I said "partly" and "just".

Facebook is afraid of a Facebook Boise office , Facebook Salt Lake City office, Facebook Houston office, etc. Their office locations are based on the political preferences of their board members and management. With no offices, they can't control the political makeup of the company.

Current employees moving to conservative areas would result in those places becoming more liberal.

At first. Some employees might adjust their own thinking once they've escaped the political monoculture that is SF.

It's the modern technological economy that produces the political culture of SF rather than the other way around. Marx' idiom of "all that is solid melts into air" is relevant here, tech and the modern urban economy aren't liberal by accident. They're liberal because technology and the logic of economic development itself erodes barriers.

The political and economic divide isn't some artefact that happened by accident and when all the tech people bring their capital and tech to conservative regions they'll see the light and become god fearing Christians, it's the regions that will undergo the same cultural change as any other region absorbed into the modern economy.

Or maybe it’s because if you work for FAANG you are not allowed to have conservative views out loud.

it's a process independent of the US or FAANGs. Doesn't matter if you go to Shenzhen, the UAE, Berlin or London. Wherever the global economy takes hold traditional values are pretty much torn apart because they're functionally incompatible.

Non-American Conservatives were much more aware of this than their American peers and are generally much more capitalism sceptic than conservatives across the pond. But you can full on expect that there'll be a very funny new political divide in the US as people start to realise how quickly economic modernisation erodes conservative values. It was already visible in 2016 if you listened to Bannon, say.

Conservatives aren’t the ones decrying the evils of capitalism.

Your theory is easily proven wrong. Go to any tech office in high tech China. Notice how barriers have not been eroded, all the managers AND employees are Chinese, and some of the managers are required to be part of the Chinese Communist party. Where is the melting pot of liberalism in high tech China, or India, or Japan, etc, etc.

I've worked and lived in China. If you think China hasn't changed then you should have seen China 30-40 years ago when everyone was wearing the party uniform and carrying Mao's little red book in their chest pocket. And I mean that literally, not metaphorically.

Today you have women running companies, Starbucks and makerspaces in every city where people sit and talk in English. You've got to be kidding me if you think China hasn't changed, it has changed faster than virtually any other place. Beijing (the only city I can personally speak of) has a surprisingly large gay nightlife. It's astonishing how much that country changes even year to year.

Sure, it's not liberal in a political sense yet but it has liberalised dramatically, in virtually all aspects of life. Same goes for Japan, it's a much more open, global country now.

Salt Lake City and Boise are pretty liberal and both vote blue. Houston is overall pretty split, but has voted for a Democrat mayor for more than 30 years.

What "political preferences" are you suggesting Facebook is afraid of from that focuses on the 3 named regions?

Facebook managers, who a large portion of are foreign nationals, prefer foreign nationals manage US offices. US citizens might not be as in favor of that and probably prefer US nationals manage US offices.

Please, tell us more about how QAnon controls Facebook.

That seems like a pretty outrageous claim. Do you have any evidence to support that? My friend works for FB Seattle and the "site manager" is definitely a white US citizen. What benefit would FB have from having "foreign nationals" run domestic offices?

I'm trying to interpret your comment as anything but xenophobic, but I'm having a really tough time doing so.

Just go look at your Seattle org chart. I never said there was a "benefit," just that foreign national managers prefer that foreign national managers manage US offices and that is why they fear offices in areas that don't adhere to this globalist orthodoxy that is in the bay area and Seattle. That should be self evident.

This is nonsense.

There is no "Seattle org chart." A given office may have a lead, but only small percentage of people in the office will report to the lead. In some cases the lead isn't even a manager.

Personally, across four teams and six managers, only one has been a non-citizen and he was a permanent resident from an anglosphere country. Looking around, pick a random manager and you'll probably find a white guy from the US.

As an aside, I always find the blue versus red states a bit of a farce.

When you remove the handful of outliers, you realize the vast majority of states have very close split, like 48/52.

So calling a state red when the split is 55/45 seems inaccurate.

Facebook's board and senior management doesn't seem to have a clear political bias from what I can tell. It would be bad for business if they did; a company that is ultimately seeking to attract the entire world onto its platforms needs to be able to operate across the political spectrum.

https://investor.fb.com/corporate-governance/default.aspx

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