Should Governments Tax Remote Workers for the 'Privilege' of Working from Home?

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That is the question employers are asking as they rethink their compensation strategies in response to the new era of remote work. Social media site, Reddit last week became the latest in a slew of tech companies to take a decisive stance on the issueannouncing that it would not cut the pay of its U.

The call contrasts with those from Facebook and Twitterwhich have said they will cut the pay of employees who choose to relocate away from their head offices in the pricey San Francisco Bay Area.

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That has sparked debate about whether these moves will set a precedent for how salaries are determined going forward, and what that could mean for employees working in different industries and locations. But that could be changing as employers consider localizing pay according to where the staff is based.

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That may be bad news for tech workers. Westend61 Getty Images However, it could be good news for leveling the field and broadening access to talent, according to the experts.

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But it could also present more options for overseas workers, too. In Asia, this may apply to China's or India's tiers in cities — as it will only impact larger countries with differentiated pay levels.

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Such strategies will be most applicable for larger countries with similarly divergent living costs, according to HR consulting firm Mercer. Opportunities for employers and employees International employers have yet to make such salary adjustment announcements, the experts noted. Indeed, in its latest salary reportWillis Towers Watson found that employers in Asia-Pacific are more likely to freeze salaries and bonuses this year.

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However, the changing landscape presents new challenges and opportunities for both employers and employees. Companies will need to consider how their existing employment contracts view compensation what is remote earnings and what restrictions they may face, according to Guillaume Vergnaud, managing director of consultancy firm New Horizons Global Partners.

50 Work-From-Home Jobs Paying as Much or a Lot More Than the Average American Salary

Those who deem it appropriate to adjust salaries should inform those affected as soon as possible and confirm any changes in writing — ideally with an updated employment contract, he said. Willis Towers Watson's Liew encouraged employees to be flexible and receptive to hybrid compensation packages that offer benefits beyond traditional remuneration, such as remote working allowances.

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A longer-term shift That flexibility could be important going forward, according to Julia Pollak, labor economist at jobs marketplace ZipRecruiter, who predicted that theoretically, what is remote earnings living costs and fewer work-related expenses for remote workers could translate to wage stagnation going forward. Organisations should strive to reward high performers based on their contributions, or risk losing these employees.

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Sonia Liew Rewards practice leader, Willis Towers Watson It is too soon to draw clear conclusions from the data, Pollak noted, but she said wages will also likely diverge within companies as workers with lower living costs "feel less pressure to raise their earnings and therefore exert less pressure on employers.