Why people who work from home get paid less

by John McDermott, Mar 9, 2017

It’s harder to get credit when your boss never sees you.

The eternal debate over whether to work from home or go into the office took an interesting turn last week in light of new research out of the University of Iowa.

Telecommuters work three more hours per week than their in-office counterparts on average, according to the new study, but that extra effort goes largely uncompensated by employers, suggesting an “out of sight, out of mind” effect among telecommuters and their bosses. That is, when telecommuters put in extra work at home, their bosses don’t notice.

“Everyone always talks about how telecommuting is awesome,” says Mary Noon, an assistant professor of sociology at Iowa and one of the authors of the study. “It gives employees flexibility, it saves companies money … But if you had to choose, it’d be better for you [professionally] to go into the office.”

Noonan’s study analyzed data on about 10,000 workers from the National Longitudinal Survey of Youth, and finds that, when they work a standard, 40-hour work week, compensation for telecommuters and in-office workers is the same. But telecommuters are compensated less for any work beyond 40 hours.

As Noonan puts it, telecommuters have a lower “return on hours worked” when working overtime. People who conduct their overtime in the office, however, see their earning grow at a faster rate.

It’s important to note the study doesn’t cover whether telecommuters are more or less productive than in-office workers, suggesting the difference in pay is due to entirely to differences in perception. That is, people who do their overtime into the office are perceived as harder-working than people who conduct that work from home, away from the watchful eyes of their supervisors, Noonan says.

Her reasoning makes intuitive sense. When a boss sees an employee toiling at his desk after hours, “it registers to the boss that [the employee] is super committed,” she says. But if that employee did the same amount of work on his couch, it probably wouldn’t register at all.

The findings are likely to cause controversy; few topics inspire as much outrage and backlash among workers as suggesting remote work is bad for employees or the companies they work for. (The mere suggestion that employees actually go in an office—and not wear headphones while they’re there, and actually interact with the people they work with—is like a dog whistle that sends brogrammers into a online commenting frenzy.)

This study adds to the already substantial research that there are serious advantages to working in an office, where colleagues work in proximity to one another and frequently interact. Vibrant office spaces are better for collaboration and generating new ideas, and the morale boost that comes from casually talking with your employees can actually increase productivity.

That doesn’t mean employees shouldn’t ever work alone. Everyone can benefit from extricating themselves from a noisy office on occasion, either for a rejuvenating walk outside, or in a quiet workspace, removed from the distractions of an open office. But it may be that people are better off conducting their solo work conspicuously, in the office.