Addressing the challenges your employees encounter while working remotely is crucial for maintaining a successful work-at-home environment. Your company’s home office reimbursement policy can determine whether work-from-home initiatives thrive or lead to dysfunction, dissatisfaction, and even potential legal issues.
During the abrupt transition to remote work, employees were left to manage without the usual office resources. Employees were left to spend their own money on setting up makeshift offices at home — an average of $194 per employee — according to a survey of 850 remote workers.
Besides fundamental items such as desks, chairs, and printers, many employees needed to upgrade their home internet connections to accommodate video conferencing needs. A study revealed that 43% of remote employees had to resort to using their smartphones as Wi-Fi hotspots because they have poor home internet connectivity in the area they live. Unfortunately, many companies don’t offer reimbursement of any sort for using personal smartphones as office phones or for a home Wi-Fi plan.
Employer Home Office Reimbursement Obligations
What responsibilities do employers have regarding home reimbursing employees for expenses linked to remote work, including monthly internet and phone charges, personal computer usage, and office supplies? Should a portion of employees’ utility bills be reimbursed as well?
While concerns about non-business use of these resources are valid, implementing a clear home office reimbursement policy that covers valid expenses and proportionate reimbursement for expenses that have both personal and business use can help address these concerns.
States with Employee Reimbursement Laws
Currently, 11 states plus the District of Columbia and Seattle, Washington already require employers to provide some level of reimbursement for work-related expenses. Even fewer states require reimbursement for remote work expenses. We can likely expect to see more states consider remote work and employee reimbursement laws in the future.
The chart below provides a quick reference of state and local laws related to employee reimbursement.
Effective Strategies for Managing Employee Reimbursement
Here are a few things you can do to create a workable situation for you and your remote workers when it comes to reimbursement:
- Offer employees a predetermined allowance to offset the cost of establishing a comfortable and productive home office environment. Companies like Google and Basecamp provide their remote workers $1,000 for their home office. Other companies offer stipends for things like standing desks, chairs, lighting.
- Create a “perk stipend” to support both remote and on-site equally. For instance, offering a $200/month stipend for “coffee shop” expenses, a $200/year stipend for technology and office supplies, and an internet reimbursement stipend can cater to diverse needs.
Benefits of Home Office Reimbursment
Reimbursing work-from-home expenses can yield advantages for both employers and employees. For employers, remote work translates to reduced costs for companies in terms of rent, utilities, cleaning services, and meals. Research by the Society for Human Resource Management found that 62% of companies offer employees a subsidy or reimbursement for at-home office or work equipment. Home office stipends and internet reimbursement have become increasingly desirable employee benefits.
Remote workers have invested resources to make their homes into functional work environments. Working for a company that has a home office reimbursement policy could entail a one-time budget to cover initial expenses, along with ongoing stipends for recurring costs or manager-approved purchases. Granting employees autonomy in managing their workspace can foster a stronger employer-employee relationship.