Compensation restructuring, reduced salaries for remote workers

Employees from the service sector, who have relocated to tier-2 or 3 cities, may witness a reduction in their salaries


The pandemic has forced most companies to adopt remote working or the work-from-home (WFH) model for their employees. Many organisations have even adopted it as a permanent model, while some have given their staff the flexibility to come to office whenever they want to. However, with the new labour codes to take effect in April, organisations are now giving serious thought to reducing the salaries of employees who have chosen to shift to their hometowns in smaller towns or cities, to work remotely.

A report on ETNOWNEWS.COM suggests that salaries of remote workers may undergo changes, as employers work towards saving at least 20 to 25 per cent of the cost incurred on each employee working from a small town or tier-2 or tier-3 city. Organisations will factor in the fact that the cost of living in smaller towns is not as high in the metros. The employees who have not relocated but continue to work from home in the metros or bigger cities may witness a change in their allowances, without impacting their overall salaries. The remote working culture has affected many aspects of work, such as commute to work, use of canteen facilities and use of office gym and so on. Therefore, benefits and allowances, such as food coupons and fuel or conveyance allowances will need to be reworked.

Organisations may also start the system of reimbursing the WiFi costs of their staff instead of transport expenses as part of a restructuring of compensations.

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