Remote employees have quietly unlocked one major workplace perk: Getting paid 12% more than their in-office colleagues, Fed study finds

At the end of last year, a Harvard University-led study revealed the lengths remote employees would go to continue to work from the comfort of their home offices: Participants were, on average, willing to forgo 25% of their total compensation in order to have their identical job, except with partial or full remote work capabilities, instead of working in the office.

New research from the Federal Reserve Bank of San Francisco suggests the opposite phenomenon is happening—at least for some workers. Employees working from home are actually getting paid more than their in-office colleagues. 

A recent study published by the San Francisco Fed analyzed data from nearly 25,000 French employees using the French Labor Force survey, as well as firm-level data, and social-security records to look at which jobs had flexible options, what they paid, as well as demographic information about the workers.

Researchers found employees who work from home, at least some of the time, earned, on average, 12% higher hourly rates than those working fully in-person. About half of this boost was correlated with education levels, gender, and age, and when researchers controlled for these variables, they still saw about a 6% difference in wages, with remote employees still earning what researchers call a work-from-home wage premium.

The study noted both France and the U.S. have similar levels of employees working from home, and both countries have more remote work opportunities for higher-paying, better-educated employees.

“Using French administrative data and controlling for a rich set of worker and firm characteristics, we find that workers who work from home earn higher hourly wages than those who do not,” researchers said.

Even with the pandemic nearly six years in the rear-view mirror, work-from-home debates have continued as large companies—including Stellantis and Home Depot just in the last month—asked workers to come back to the office five days a week. Nearly 65% of workers said their offices have some form of hybrid work, according to data from Zoom.

The trend of workplace flexibility appears to be here to stay: National Bureau of Economic Research found millennials and Gen Z bosses more likely to let employees work from home compared to bosses from older generations, creating an even creator imperative for future-of-work experts to better understand what makes it compelling to the evolving workforce.

Explaining the remote-work wage premium

To be sure, remote employees are not magically getting paid more just because they clock in from home. The San Francisco Fed study noted nearly half of the 12% pay bump for hybrid workers was a result of certain demographic factors, such as age, gender, and how long someone has held their job position. Older workers with more senior titles, for example, were paid more.

That other 6% in wage premiums may be bad news for Gen Z workers who want flexibility in the early stages of their careers. The study found remote employees who were paid more had higher-paying positions ahead of the pandemic, as well as non-observable assets such as greater productivity and negotiation skills that essentially allowed them leverage in brokering perks with employers.

Taken together, the data suggests higher pay for more flexible work isn’t a result of remote employees successfully proving to their bosses that their work-from-home practices or productivity warrants higher pay. Rather, it indicates more senior employees with greater leverage—who were getting paid more anyways— negotiated better with employers for more flexible work structures.

“The workers who are working from home post-pandemic were already paid higher wages before WFH became widespread,” researchers wrote in a blog post published on Tuesday. “Workers who are more productive, or have better negotiation skills, are able to get both higher hourly wages and the right to work from home more often.”

What it means for the future of remote work

The San Francisco Fed’s study suggested its results give credence to a major argument from future-of-work experts: “Our findings are consistent with case-study evidence that firms offering WFH disproportionately attract more educated and experienced workers,” researchers wrote.

Indeed, a 2024 study led by remote work expert and Stanford economist Nick Bloom found that of 1,614 employees working for a Chinese technology company between 2021 and 2022, hybrid workers increased job satisfaction and decreased quit rates by one-third. The results were particularly robust for workers with long commutes, as well as female employees, who view flexible work as a crucial benefit because they shoulder the majority of childcare responsibilities.

The fact that companies’ top earners and more senior employees are the ones getting flexible work perks is yet another indication hybrid work would be here to stay. It’s not just Gen Z’s flexible work preferences; it’s also a company perhaps wanting to avoid losing top talent. A 2025 Pew Research report found nearly half of workers said they’d be unlikely to stay at their jobs if their boss no longer let them work from home sometimes.

This story was originally featured on Fortune.com