Navigating Home Office Expenses: Legal Obligations and Employee Well-Being

In days gone by, employees used to be able to write off home office expenses. This was great for folks who worked from home, as they were incentivized to upgrade their workspace and get the equipment they needed.

However, that all changed in 2017 when the government suspended miscellaneous itemized deductions. This meant that folks could no longer deduct home office expenses.

Navigating home office expenses can be tricky for employers and employees alike. Employees are unlikely to want to pay for essential equipment PCs and desks themselves and may resent pressure to foot the bill. Similarly, you may want to exercise some caution when setting aside a budget for home upgrades that are not, ultimately, your own.



Understanding the Law

Currently, federal law does not require employers to pay for home office equipment or upgrades. However, many states do have strict laws that govern what expenses you will be expected to pay.

Understanding your state law is crucial, as it will help you plan for reimbursements for fees like internet access, cell phone use, and office supplies. You shouldn’t have to worry about dealing with the Fair Labor Standards Act (FLSA), either. The FLSA would only be appropriate if the cost of work-from-home expenses reduced the employee’s hourly rate below the minimum wage.

That said, state law can be strict when it comes to paying for home expenses. Currently states that protect employees with statutes for remote work include:

CaliforniaDistrict of ColumbiaIllinoisIowa
MassachusettsMinnesotaMontanaNew Hampshire
New YorkPennsylvania

These states have their own laws to protect workers and ensure that everyone can work from home in a safe, productive environment. Generally speaking, these laws will protect employees from paying fees related to work like subscriptions to Zoom, printer ink, and work computers.

That said, it may actually be in your best interest to set aside a budget for home office expenses — even if you aren’t legally compelled to do so. 

Setting a Budget

Putting aside funds for home office upgrades is a great way to show staff that you care about their productivity and are willing to invest in their wellness. Funding home office upgrades can proactively prevent problems that derail productivity, too. For example, if you’re planning to host a digital conference call with external stakeholders, you should pay for high-speed internet to reduce the risk of employees dropping out mid-call.

However, setting a relevant, realistic budget can be tricky. Throwing money at home office upgrades won’t necessarily get you the result you want, either. Instead, support remote workers by drawing up a budget based on common costs associated with working from home:

  • Security: Your staff still needs VPNs, secure internet, and malware protection when they work from home. Set aside a chunk of cash to ensure each employee’s workstation is secure.
  • Utilities: Heating and cooling a home office can be energy-intensive. Take the chill off by offering a little support every month based on the costs associated with heating/cooling a home office space.
  • Big-Ticket Items: Some staff perform better when they have standing desks and high-end computers. Set aside some serious funds for expenses that help your employees reach their potential.
  • Supplies: Most employees don’t need extra cash for pencils, pens, and printer ink. However, those who do will appreciate the small pot of cash you put aside for supplies at their home office.

Clearly, these expenses can add up quickly if you invest in every employee. However, working from home can still be a cost-effective alternative to working in the office. You’re already saving big on office rental and maintenance fees, and your employees deserve to enjoy some of those cost reductions at home.

Effective Office Upgrades

Paying for home office expenses can help employees achieve their potential and improve productivity at your business. However, some staff simply don’t have a spare room to convert into a home office.

Help these employees create a workplace they can be proud of by putting aside some funds for a garage conversion. Converting a garage into a home office is surprisingly simple. Most employees will just need to:

  • Clean the workspace;
  • Buy necessities like power cables and lighting;
  • Install an HVAC and insulation;
  • Personalize the space with furniture and decor.

You don’t have to pay for the entire conversion, either. Instead, some employees may simply take a few hours of paid time off to get their home office in top condition. By footing part or all of the bill, you encourage employees to make a space that truly supports their productivity at work.

Just be sure to track ROI when paying for home office upgrades. You can track the productivity of remote workers easily by setting collaborative goals, monitoring their time at the desk, and setting clear KPIs for them to follow.

Conclusion

Home office expenses can be burdensome for employees and employers alike. While you may not have a legal obligation to foot the bill, consider setting aside some funds anyway. Staff will appreciate the extra effort and will be able to protect their wellbeing by investing in standing desks and decor that support productivity and bring them peace of mind.

Featured image by Unsplash

Employment Law Updates
Laws change in a moment. Sign up to stay informed.
Employment Law Updates
Laws change in a moment. Sign up to stay informed.

Have employees in more than one state? SUBSCRIBE HERE!

Have employees in more than one state? SUBSCRIBE HERE!