Rate reduction for working at home

[NotAllThere]

There was never a distinction made between WFH or being in the office. I base the majority of my time in the office but WFH occasionally.

Now the client wants to implement a reduced rate for WFH, which has been communicated through the agency. I guess this is because some people are taking the piddle?

I don't suppose it's an unusual approach, just wondered how common this type of thing is and is it fair to generalise WFH being less effective, I certainly don't reduce output when WFH.

I think it is more likely that the client believes that the costs to you of wfh are less than commuting to the office. This may be true, but it's also true that they no longer have to supply you with office space, so the cost to them is also lower.

[Hobosapien]

WFH becomes more attractive when otherwise it means staying away from home during the week as the client site is too far to daily commute, so in that scenario the saving by WFH may offset the rate reduction.

If commuting each day then decide if the cost outweighs the rate cut. Though if they are on about charging a different rate for days you WFH than the other days on site in the same week then they better have a system that can cope with that in terms of timesheet billing accuracy if they are doing self billing invoicing.

I'd make sure it's the client pushing this and not the agency seeing a way to increase their margin (i.e. charging client same but pocketing the new WFH rate difference).

If the client values you then you could call their bluff and say you want the same rate, or accept it now but push for a re-balance at next renewal when you have had more time to plan the impact of walking.

I've not used WFH to accept a lower rate but have used it to not increase my rate at renewal.

[jmo21]

So has anyone ever come across the agency/client reducing their rate for working from home?
(Between 5-10% proposed reduction with immediate effect)

I guess the options are take it on the chin / negotiate / or walk.
Just interested in what the mighty collective have done in such circumstances...

As others have said, I'd be keen to clarify if this is coming from the client or not.

You mention "with immediate effect" which suggests you have already started the contract?

[cosmic]

WFH should have no relevance as to pay rate. You are hired to do a job for a set rate. How you do that job be it in client office or at home is irrelevant and should not dictate the pay. To me this sounds like an IR35 issue in ways of working.

If I was in the same position I would of not asked. Worked from client site but if I want to work from home then say to client I would be working from home on x day. They cannot dictate when, where and how you work. You should make sure your contract state this from the start otherwise it's ripe for IR35 of client having control over you.

[northernladuk]

Tell your client you'll accept another 10% rate reduction if they give you a longer contract

[ladymuck]

Not had a client (or agency) try to cut the rate after the contract has started because of WFH. It has been common in the past (it probably still happens) for lovely banks to do rate cuts because they ran out of money to pay the shareholders or some such nonsense.

[DaveB]

Not had this happen spoecifically but I will generally accept a lower rate for a WFH gig for the convieniance and the fact that it makes it easier to run concurrent contracts or do work on the side.

[simes]

Must admit this is a new one to me. Professional working day, irrespective of location, would be my response.

Are you asking to wfh, or has it been forced upon you?

Without this knowledge, could you chuck an argument back saying that if the client is not willing to offer you work space, your rate goes up? At least then perhaps the rate stays the same and the argument goes away.

[gables]

Only ever wfh (this is occasional unlike some on here) at the same rate as in the office so never really considered. But my thoughts are if the rate cut was significantly higher than the cost of going in, I'd be going in; that'll show em

[DeludedKitten]

There was never a distinction made between WFH or being in the office. I base the majority of my time in the office but WFH occasionally.

Now the client wants to implement a reduced rate for WFH, which has been communicated through the agency. I guess this is because some people are taking the piddle?

So it's a mid-contract rate negotiation that the client wants to put in place - if you don't want to negotiate then you let them terminate the contract and you walk away. They cannot force this on you without a new contract being in place.

I have a fairly standard day rate - I might adjust it upwards if the client can afford it and I'm not that fussed about the work, or I might adjust it downwards for the right role and the right location. But it tends also to be a factor of what I expect to charge each day plus my expenses (and after some time I'm pretty good at guessing what flights / trains / mileage / hotels / rent might all come to). For a contract some years ago that was mainly working from home, I negotiated a discounted rate but I would bill for any travel costs and time as necessary because they were talking about me going to different countries for the project. The client liked the idea because they saw the lower rate discount, I liked it because I had my expenses covered and I was working from home for above my minimum day rate. Win-win.

If you have significant costs of being in the office then this is your chance to renegotiate that to your benefit. So rather than a cut to work from home, you introduce a new day rate with an uplift for every day that you are in the office - whether that is a flat fee or expenses is up to you both to agree on. Maybe this is a blessing - you can work from home more often, you get more freedom that way, you can argue that you've dictated your working location and work pattern, and the client gets that lower day rate that they are after at a zero cost / opportunity cost to you.