Companies love talking about their plans to go remote-first. Fewer companies talk about what that means for pay. Carta released a report on the state of startup compensation, which looked at what companies’ shift to remote work means for pay.

Adjusting pay based on where workers live is happening quite frequently, especially among startups, according to the report. All the handwringing over geo-neutral compensation might have been premature.

• Carta found that most startups (around 84%) adjust compensation based on location. Startups with bigger valuations are more likely to keep pay the same across the board.
• Tweaking comp based on location is only going to become more common as the number of remote employees grows. Around 62% of new hires were based in a state outside the company’s HQ, up from 35% in 2019.

But what if workers think location-based pay is unfair? Some people at larger tech companies, like Google, don’t like location-based pay, and some companies, including Airbnb, decided to keep the same pay across the board for the sake of retention.

• The debate is different for startups, though. They don’t have as much cash as Big Tech, and employers are likely more concerned about making sure pay between new hires and current employees is equitable, Carta’s Peter Walker told me.
• Walker said some startups have talked about not adjusting pay by location anymore. But as the market tumbles, that’ll be a harder call to make. “Money is going to be a little tighter,” he said.

Some companies are still divided over whether to adjust pay based on location. But startups seem to have settled the debate, at least for now.

— Sarah Roach (she/her/hers)