Remote Job Applicant Is Told The Salary Is ‘Unknown’ Because It’s Based On The Cost Of Living Where He Lives
Should salary be based on the cost of living?
Karolina Grabowska / CanvaPro The thought of making less than your co-workers, despite doing the same job, seems unfathomable to many — regardless of what industry you’re in. However, more and more companies are starting to intentionally pay their employees differing salaries, all in the name of equity.
After wrapping up the interview process for a fully remote job, Gonzalo from @gonzalo_andrea on TikTok was told that there was “no set salary” for his position. Instead, he would receive a unique salary in his offer letter once they saw what state, city, and county he was living in.
Accounting for their employees’ cost of living, this company is one of many that’s adopted “geographical salaries,” hoping to pay their employees enough to be comfortable in whatever city they’re living in. While it seems relatively straightforward, many people have spoken out, arguing that there are better ways to compensate employees fairly.
During an interview, Gonzalo was told the salary is ‘unknown,’ as it’s based on the ‘cost of living’ where he lives.
“There is a set salary range,” the interviewer said on the call, “but we don’t have any knowledge of what your salary would be because it’s based on the cost of living where you live … every position in every state is not the same.”
Although she tried to reassure Gonzalo that the salary would be “comfortable and competitive," he wasn't alarmed by the fact that they didn’t have any compensation information to provide him — despite making it to the end of the interview process. “The last [job] ghosted me,” he wrote over the video.
Surprisingly, many companies have switched to ‘geographical salaries’ with remote employees nationwide.
Despite the shock of many viewers who commented on Gonzalo’s video, pay based on location is a growing trend in the remote workspace.
Companies hope to radically change expectations on “fair and equitable” pay by considering things like the cost of labor and living rates in specific locations.
"Work is no longer a place," said Scott Cawood, CEO of WorldatWork. He told SHRM, "With remote working requests continuing to emerge and surprise leaders, companies are re-evaluating how to create cohesive, consistent, and fair geographic pay policies."
Photo: DNY59 / CanvaPro
But is this really the fairest way to compensate employees? Some people have their doubts.
Viewers passionately shared their thoughts on ‘geographical pay’ in the comments.
“I don’t know if I like basing a salary off where you live,” one critic shared. “What happens if you move to a bigger city … are they going to be paying you more if it’s a ‘personal’ decision?”
Others agreed with this sentiment, adding that there are a multitude of factors that contribute to an employee’s “equitable” salary outside of where they live. Many argued that “geographical salaries” take away their “autonomy in negotiating for higher wages.”
Photo: Monkey Business Images / CanvaPro
However, some think it’s smart for employers to consider their employees' specific costs — whether it be rent, groceries, or even transportation. “You’re never going to make an Indiana salary work in New York City,” one person wrote. “Especially if you’re remote and can only work from certain locations, this makes sense.”
By his vibe in the video and continued replies to comments, Gonzalo isn’t entirely angry with this company’s decision to use “geographical salaries” either. He said they had a “salary minimum” posted before he applied, which he was happy with.
Ultimately, everyone is looking for different things in their job searches. If they feel adequately compensated based on the cost of everything around them, that’s a good thing!
As many shared in the comments, don’t forget to negotiate when you receive a job offer. Companies “have a range” for a reason. Whether or not it’s based on location, you should always advocate for pay that makes sense for you, where you live, and what experience you have.
Zayda Slabbekoorn is a News & Entertainment Writer at YourTango who focuses on health & wellness, social policy, and human interest stories.