Should You Reimburse Staff for a Home Office?

What challenges have your employees been facing, and how can you offer the solutions they need? Deciding on a home office reimbursement policy can be the difference between successful work-at-home policies and dysfunction, disgruntlement and maybe even lawsuits.

When the sudden retreat to homes for work occurred, employees had to make do without the usual office equipment. Workers spent their own money — an average of $194, according to a survey of 850 remote workers — setting up makeshift offices at home.

Besides office basics like desks, chairs and printers, many workers had to upgrade their home internet for Zooming. Many businesses don’t offer assistance for using a smartphone as an office phone or for a home wireless plan. A survey found that 43% of workers had to use their smartphone as an internet hotspot because they live in areas where home internet connectivity is lacking.

What are employers’ obligations to compensate employees for remote work-related expenses such as monthly internet and phone costs, personal computer use, and office supplies? Perhaps there should be reimbursement for a portion of workers’ utility bills as well.

You may be thinking that employees use these things for nonbusiness reasons. But should you feel that you want to adopt a reimbursement policy, you’ll want to clearly define and provide reimbursement for legitimate expenses and include proportional reimbursement for expenses that have dual business and personal use.

Some states already mandate some level of reimbursement by employers for job-related remote employee expenses. Legal experts expect there will be some lawsuits brought by remote employees looking for more assistance and reimbursement from companies.

What can you do to keep the situation workable?

• Give employees a set allowance to defray the financial burden of setting up a comfortable and productive home office. Companies like Google and software firm Basecamp give remote workers $1,000 to set up a home office. Others offer $500 for standing desks, chairs and lighting. Still others offer limited stipends of $200 to $300.
• Create a “perk stipend.” You can craft this to support remote and on-site folks equally. Ideas include a stipend of $200/month for “coffee shop” purchases, $200/year for tech/office needs and an internet reimbursement stipend. Everyone gets what they need when they need it without wasting time and people resources on a companywide HR program.

The truth is that your company is saving money on rent, utilities, cleaning services and food when employees work at home. And the work-at-home crew may need to make some infrastructure changes to support work. You may want to reimburse for videoconferencing services and collaboration tools.

Reimbursing work-from-home expenses can be good for employers and employees. Home office stipends and internet reimbursement were cited by employees as most desired, according to a Paychex survey. Deloitte rolled out $500 work-from-home subsidies to enhance hybrid work.

Society for Human Resource Management research found that 62% of organizations offer employees a subsidy or reimbursement for at-home office or work equipment. Others send the equipment necessary to work at home. And still others employ a fixed monthly stipend.

Remote workers have invested in making their homes ready for work, and let’s face it, it takes money to update spaces for working from home. Working with a firm that has a home office reimbursement policy may mean getting a one-time budget allowance to cover costs and a stipend for recurring expenses or manager-approved purchases. When workers get to exercise autonomy, it enhances the connection between employers and their team. And benefits can be customized to defray the costs of utility bills.