Working from home has been a hot topic of conversation since the covid-19 pandemic began to impact the UK back in March 2020. Some businesses were already operating flexible working conditions for their staff, others quickly adapted to enable home working and others have struggled with the concept, believing that it does not work for their business.


There is no right or wrong approach, it is very much what is best for your business and your employees, with a mixture of both home and office working now being the most common approach for many workplaces.


The latest debate to hit social media and the press is the idea of docking the pay of those who work from home. This comes after large corporations such as Google put forth a pay cut offer to allow staff to permanently work from home instead of coming into the workplace. Over 10,000 Google workers have requested to work from home or relocate to different Google offices, closer to their home because of this offer. A Government minister has also floated the idea that civil servants who only work form home should be paid less than those who work from the office.


Why cut pay for home workers?


It could be argued that home-working staff cost considerably less than those using the office. When you factor in square footage of office space, resources and even the usage of water, electricity, and tea/coffee facilities. In fact, some people working from home may have incurred their own additional costs, seeing their utility bills higher than usual, increasing their broadband or investing in their own desks, paper and stationery.


So, it might seem an unusual choice to make changes to their pay. However, employees working remotely have noticed savings made from skipping the office commute. Those commuting to London particularly have saved on their expensive train and tube season tickets. A pay cut or the removal of travel allowance would counter act the de facto ‘pay rise’ that home workers have been benefiting from which those continuing to work in the office have missed out on. This could help balance the gap.


There is a strong argument that employees should be treated and paid the same – equal pay for equal work – whether they commute 2 hours to an office or carry out their duties from home.


Those who live close to their workplace could be penalised twice by a pay reduction, seeing their household bills rise without making noticeable savings on their travel.


Some workplaces are keen to see staff return to the workplace for numerous reasons. The removal of location allowances or cutting pay might be incentive enough to bring back employees who have been working from home. But is this morally fair?


Man working from home on laptop and phone employment law HR solicitor

Is it legal to cut pay for some workers?


Contracts can be changed when your business requirements adapt, as long as there are grounds for the changes. Employers will need to consider any contractual changes very carefully before taking action. It is important to understand the potential impact of adjusting pay or removing benefits to select workers. There are legal and ethical considerations and businesses should also consider the long-term impact.


If employers have clear policies on location allowances, then pay reductions could be easier to navigate but this will not necessarily make pay cuts more palatable to those on the receiving end. To change contracts, the employee would need to agree to the change, otherwise the original contract would need to be terminated (giving the required notice) and employees would be issued a new contract on revised terms. This route can of course open the Employer up to potential unfair dismissal claims.


It is possible to mutually agree pay reductions with employees through a consultation process. This would be the most ideal situation for an employer as this would avoid the need to terminate the original contract of employment. Employers should be clear on why they are proposing pay reductions to home workers, and fully consult with all affected employees. It should be noted that when reducing an employee’s salary, this could also impact other benefits i.e. pension contributions etc.


Risks of Cutting Pay to Home Workers


There are several risks that employers might face should they take this route. Cutting pay of those who do not want to come into the office could give rise to claims relating to unfair dismissal, discrimination and health and safety.

  • Considerably more females, than males, work from home as women are more likely to need to work from home due care responsibilities, so decreasing pay could be seen as indirect sex discrimination.
  • Those who work from home due to having children could raise claims of discrimination.
  • Employees with health issues, those who are vulnerable or those who do not feel comfortable coming back to work due to the pandemic could raise concerns that pay adjustments are discriminative or make claims against health and safety regulations.
  • There is also the issue of employees working from home being overlooked for promotions or pay rises, placing home workers at a disadvantage.
  • Employee morale is at risk of being impacted – segregating colleagues into those who are on the receiving end of a pay cut and those who aren’t. Employees may feel pressured to come into the office to avoid pay cuts or being overlooked.
  • When making contractual changes there is a risk of losing some of your key people within your business. Employee retention could be impacted if the changes are not handled correctly or accepted by your staff.
  • Imposing such a reduction without the employee’s consent could amount to a fundamental breach of contract and would potentially give rise to a constructive unfair dismissal claim.

Employment Law Advice


If you are looking for advice on contracts, pay, working from home or any other HR related legal issues, then please get in touch with our Employment Law Team who would be happy to discuss your requirements.


Call us on 01256 844888, email enquiries@lambbrooks.com or speak to our online chat assistant at any time of day.


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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.   Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.