How location-based pay can backfire

As more companies decide to remain fully remote or adopt a hybrid work model, many are adopting location- or geo-based salaries to account for the varying cost of living expenses among remote employees.

Companies that implement a location-based salary policy essentially raise or reduce employee salaries based on where the employees have personally decided to live and work. It’s an approach that’s particularly impactful for employees who live and work in a big city as opposed to a smaller one, such as New York City vs. Des Moines, Iowa.