Are all your company’s employees still fully remote? Or are only a small number still working remotely? Are most company employees working a hybrid schedule, switching between in-office and remote? Whatever the case, employees should be reimbursed for the business use of their personal assets. So, what does that include? What should companies reimburse when providing a remote work stipend?
Legal Risk of Not Reimbursing
Before jumping into what companies should reimburse for, let’s consider why. Companies providing employees with stipends for at-home office needs see higher engagement from their workforce. These companies are also avoiding legal risks. A growing number of states like California and Illinois have laws that require organizations to reimburse employees for business use of personal assets. However, there are also national laws, like the Fair Labor Standards Act (FLSA), that cause big headaches for employers that aren’t in compliance. Companies hoping to avoid litigation may find this a convincing reason to reimburse.
What should companies reimburse for?
There are a few ways companies can tackle this. One is covering the bare essentials. At the top of that list would be internet and, depending on the employee’s role, device use. For companies more concerned with the legal risk of not compensating their employees for the business use of their personal assets, this is the most likely choice.
Another method companies might take is covering what employees need. Many employees worked from kitchen tables and other makeshift office setups at the outset of the pandemic. Some likely continue to do so. Companies that understand the needs of their employees provide reimbursements for internet and device use, and in some cases additional funds to help pay for a home office set up. That may also include an increased internet stipend, to help pay for better service.
The third method would be covering more than the essentials and home office set up, going on to include the costs of increased utility use and even a portion of rent. Before the onset of the pandemic, most employees left their homes for at least 40 hours each week. With everyone at home more frequently, the price of electricity and heating rose. Similarly, prior to the pandemic, very few employees worked from home. Employees made mortgage payments or paid rent for their time in their home. Many employees today make those payments for the time they spend working from their homes for business purposes.
Each of these options raises a greater question: how do you calculate this reimbursement?
Remote Work Stipends
Most companies are providing a remote work stipend. Following a rough estimate or close approximation, they take a nice round number and send it as a one-time payment to cover home-office needs. Or, they add it to recurring salary checks. The issue with a stipend? It’s not specific to the employee’s geographic location and costs. Some employees will come out with more, others with less.
The Motus Work Anywhere Reimbursement Solution
Using the Motus Platform, we take geographic data into account and provide a calculated rate specific to the individual employee’s location and calculate business use percentage specific to that employee’s role. This ensures the payment is fair and accurate to both company and employee. What all is included in our Remote Work Reimbursement solution? That depends on what your company wants to reimburse. Our rates can include mobile devices, internet and home office expenses as specified.
Interested? You can learn more on our remote work reimbursement solution page.