Building a strong compensation strategy: Is location-based pay best?

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Is your business expanding into new states? Or are you hiring remote workers from across the U.S.?

Either way, you’ll want to build a strong compensation strategy. You may be considering location-based pay – also known as a geographic pay differential. This means that you pay employees differently based on their location.

In some cases, this refers to additional compensation given to employees to account for higher costs of labor or cost of living in the areas where they reside and work. Here’s everything you need to know, including answers to the most common questions on location-based pay.


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