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WFH Salary Sacrifice

Tuesday, May 10, 2022

Emerging from over two years of pandemic rules, restrictions and re-thinking working companies are now coming to terms with how their business might best be organised.

There’s no denying that many office workers have adjusted well to home working and with the appropriate room, privacy, hardware and video call software along with company support large numbers are asking why they should return to the stressful and expensive commute.

For the employer this poses a number of problems, not least the cost of renting and running office space when only partially occupied. In the short to medium term that’s going to require creative thinking to avoid insisting full attendance yet still getting value from the investment in your own premises.

The logic for retaining a physical bricks and mortar presence is beginning to be realised as more of us are hosting meetings for customers, suppliers and internal team gatherings.

There remains a conflict for a large number of employers in trying to satisfy the needs of staff over the commercial demands of managing a business and not haemorrhaging cost for an underutilised resource.

A number of firms have stepped out with their solution to the conundrum and recently law firm Stephenson Harwood with 1100 staff and 190 partners across 8 countries announced what transpired to be a rather controversial answer.

Legal practitioners and other staff in the firm, not partners, could opt to work from home as long as they spend one day a month in the office. All sounds very civilised however there is a literal price to pay for this freedom. All who choose this option will be subject to a 20% reduction in their salary. With newly qualified lawyers starting on £90,000 that would be a cut of £18,000 a year.

Naturally there is more to this proposal than simply the headline grabbing pay cut. Stephenson Harwood are also offering hybrid options where the employee works a 40/60 split with 60% of their time in the office with no loss in salary.

Critics of the move to cut salaries by 20%, of which there were many, suggest that the decision could directly impact women more than men as they are more likely to take the option to work at home to support child care needs. Another view countering the cut suggests that the hours put in by those not commuting are longer and more productive without the struggle of commuting.

There’s also the view that such a reduction in income will act as a disincentive to work the extra hours afforded by not having to commute.

An alternative view is that Stephenson Harwood are one of the better remunerators in the legal world and offer significantly higher salaries than many regional firms. Lawyers could work from anywhere in the UK and enjoy a better quality of life over those who are struggling to get a foot on a ladder in London and still spending a large proportion of their time commuting.

There is clearly a balance to be struck but employers need to be mindful of such steps attracting claims for discrimination if gender, disability or other protected characteristic within the workforce is seen to be singularly disadvantaged by the decision.

The recommendation would be to take such decisions with care and after consultation with staff and managers. Stephenson Harwood may be a hugely successful law firm but the move may yet backfire no least as a result of negative PR and their prospects of attracting new talent to the firm.

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