Home Office Reimbursement: Once a Luxury, Now Essential

home office reimbursement

Home Office Reimbursement

Does your company offer Home Office Reimbursement? More than a year into the pandemic, many employers have extended their remote work policies into late 2021 and beyond. The trend of allowing employees to work remotely seems to be here to stay, but the ad hoc way most companies have been dealing with the largescale shift to offsite work isn’t sustainable long-term. For remote employees to be productive, effective, and happy, employers need to implement or rethink home office policies, procedures, and benefits. Understanding the challenges your employees face, and offering them the solutions they need, can help assure your success. Ignoring those needs could result in dysfunction, disgruntlement, and even lawsuits.

Added Employee Expenses

In the scramble to transition from office to home at the outset of the pandemic, nearly 57% of remote workers had to make do without their usual office equipment (because they weren’t allowed to take it home).1 A survey of 850 remote workers found that they spent an average of $194 setting up a makeshift home office.2 In addition to purchasing many office basics—monitors, printers (and ink and paper), ethernet cables, desks, chairs, etc.—many workers found it necessary to upgrade their home internet for video conferencing and large file transfers. In many cases, a personal smartphone has become the new “office” phone. Yet many businesses don’t offer assistance paying for either the phone itself or its wireless service plan. In areas where home internet connectivity is lacking, those phones are put into service for more than calls and texts. According to one survey, 43% of workers have found it necessary to use their smartphone as an internet hotspot.3

Legal Considerations

States including California, Massachusetts, Illinois, Montana, and New Hampshire already mandate some level of reimbursement by employers for job-related remote employee expenses. How far other states will go to address the new normal remains to be seen. But legal experts anticipate a wave of lawsuits by remote employees looking for more assistance and reimbursement from their companies. And many believe that getting ahead of the matter now could save you money, hard feelings and legal fees later.

How Are Companies Addressing Remote Worker Expenses?

Some companies give employees a set allowance to help defray the financial burden of setting up a comfortable and productive home office. Shopify, Google, Facebook, Twitter, and the software company Basecamp give remote workers $1000 to set up their home offices. Indeed, the employment company, has reimbursed employees up to $500 for standing desks, chairs, and lighting.4 Other companies offer more limited home office setup stipends of $200 to $300. Another approach combines a one-time set-up allowance with either complete or partial ongoing reimbursement for the employee’s home internet service and mobile phone service.

Some companies have tight restrictions around how the money can be used. Some will reimburse only for office supplies, while others expand the scope to include furniture such as desks and chairs. As noted above, some also include periodic allowances for business use of the employee’s phone and home internet service. Benefits can be customized to include money to defray the costs of other home office expenses, such as higher utility bills.

BASIC Home Office Reimbursement Account: Give Your Business a Competitive Edge

As you can see, the shift toward remote work brings about unique challenges and expenses for employees. Refusing to address them can negatively impact your organization’s ability to attract and retain high quality job candidates, as well as harm your workforce’s wellness and productivity. To set your company up for success in the modern remote work landscape, consider adopting a BASIC Home Office Reimbursement Account.

Customize your plan by setting the total dollar amount you’ll offer employees, plus choose which specific work-related home office expenses to reimburse. Home office reimbursements are tax free for employees while employers do not have to pay payroll taxes on contributions. The BASIC Home Office Reimbursement Account is one of over 30+ benefit accounts available on our state-of-the-art Consumer Driven Accounts benefit platform.

If you’d like to take your benefits package to the next level with a BASIC Home Office Reimbursement Account, request a no-cost proposal today!

  1. “Is it Time for Employers to Reimburse Remote Workers’ Expenses?” SHRM, September 2020: https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employers-may-overlook-reimbursing-remote-work-expenses.aspx
  2. Ibid.
  3. “6 Ways COVID-19 Will Change The Workplace Forever,” Forbes, May 2020: https://www.forbes.com/sites/williamarruda/2020/05/07/6-ways-covid-19-will-change-the-workplace-forever/#346a3160323e
  4. “Working from home? You might be able to expense a new desk,” CNBC, June 2020: https://www.cnbc.com/2020/06/03/companies-are-paying-for-their-workers-home-offices.html