Johnny C. Taylor Jr.
Johnny C. Taylor Jr. tackles your human resources questions as part of a series for USA TODAY. Taylor is president and CEO of the Society for Human Resource Management, the world’s largest HR professional society and author of “Reset: A Leader’s Guide to Work in an Age of Upheaval.”
The questions are submitted by readers, and Taylor’s answers below have been edited for length and clarity.
Have a question? Do you have an HR or work-related question you’d like me to answer? Submit it here.
Question: I work as a therapist for a mental health service agency. We recently switched from 50% remote to 100% remote work. With the ability to work from anywhere, I am planning on moving from New York City to Jacksonville, Florida. With our shift to remote, our location is calculated into our pay ranges. Is this common practice or a new phenomenon? Why does location impact my pay? – Nikki
Johnny C. Taylor Jr.: Yes, factoring in location when determining an employee’s base salary is becoming common practice.
Frankly, employers have done this for decades. The growth of remote work is making more people aware of a location’s role in devising compensation. Whether it is the regional labor market or local cost of living, where you live has always been calculated into your pay rate. Pay rates are generally designed to be sufficient for attracting workers in a local market. However, in today’s global economy, companies constantly adjust their pay structures to account for the local cost of living and local wages for similar jobs.
Working from home:Nearly 50% of U.S. workers would take a pay cut for it.
The proliferation of remote and hybrid work has created opportunities for employers and employees to reshape what it means for their careers and lifestyles. You’re among a growing number of people with the ability to work 100% remotely.
Remote workers now have the power to work from anywhere in the world. Conversely, employers also have the opportunity to recruit talent from anywhere. In a global labor market, you are no longer competing with workers in New York City or Jacksonville; you are competing with workers virtually everywhere.
The cost of living in Jacksonville is about half that of New York City. When you take this disparity into account, the significance of location becomes clear. Hopefully, this helps you understand your employer’s perspective a bit better. Best of luck on your move.
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Q: I just started a new job, and it offers HSA and FSA benefits. I am single with no dependents and relatively healthy. Should I consider either one of these options? What are the major differences between them? – Violet
Taylor Congratulations on your new job. There certainly are important differences between Health Savings Account) and Flexible Spending Account benefits. Even if you don’t expect a significant number of medical expenses, there may still be advantages of each you’ll want to at least consider.
HSAs and FSAs are both designed to cover potential future medical expenses. Given that they are funded from pretax dollars, they both reduce your tax liability, which essentially saves you money when used properly. They primarily differ in how long each benefit is available for use, who qualifies for the benefit and how much is available to use.
How long is the benefit available for use? You own and control your HSA and are allowed to roll over your contributions year after year. Should you leave your current job, you can also take your HSA with you. FSAs are less flexible as they are employer-owned. FSA funds not used in the current year generally cannot be carried over into the following year. So, you can potentially lose the money you contributed to the account. However, if an employer’s plan allows for carryover, an employee may have the option to carry over a limited portion of the FSA funds.
Who qualifies for the benefit? HSAs are only compatible with high-deductible health care plans. While more affordable, the deductibles you pay when using the plan are considerably higher than traditional health care plans. HSAs can be a great choice for young, healthy employees with no dependents. FSAs are compatible with either traditional health care plans or high-deductible health care plans.
How much is available? Maximum contribution amounts also vary between FSAs and HSAs. The IRS can adjust those amounts year to year. For 2022:
• FSAs have a $2,850 limit for individuals.
• HSAs have a $3,650 limit for self-only coverage and a $7,300 limit for family coverage.
In addition, an HSA can also double as a retirement savings vehicle. Both employer and employee contributions may continue to grow in savings with the option to also invest savings in the stock market to generate additional income.
At the end of the day, every employer selects benefit offerings to meet its specific circumstances. Your HR professional is your best resource as you sort through the unique details of your employer’s benefit options. I hope these considerations shed some light on your options and help you make the choice best suited for your lifestyle.