Note: As of the date of this posting, the number of telecommuters is increasing suddenly and dramatically due to efforts to contain the COVID-19 outbreak. It’s too soon to know whether these temporary measures will change the balance of onsite and remote workers on a permanent basis. It seems likely, however, that a successful remote working experience now will open the door to more demand for the ability to work from home after the health crisis is over.
With that in mind, we are presenting a series of 3 articles concerning telecommuting and the home office benefit. We hope the information and tips in this series will prove valuable to your company whether telecommuting is a short-term solution or part of your ongoing benefits package.
In previous posts, we discussed the reasons behind the growth of telecommuting (even pre-COVID-19) and best practices for implementing home working arrangements successfully in your organization. Here, we’ll recap some key points and talk about a tool that can help you use remote working arrangements to recruit and retain talent.
By the end of 2018, more than 26 million people (16% of the U.S. workforce) were working remotely at least some days.1 And with 50% of all workers now in jobs that can be done remotely, many companies have an opportunity to more fully implement remote work.2
Why Employees Want It
As many as 80% to 90% of US workers say they would like the opportunity to work remotely at least some of the time..3 Workers say remote work improves work/life balance, reduces or eliminates the stress and expense of commuting, and makes them more productive.4
Why Employers Should Consider It
The most obvious benefit to companies is improved employee satisfaction. Remote workers score 29% higher than on-site workers among workers asked if they’re happy in their jobs.5 They’re also more likely to stay in their job for the next five years.6 Embracing remote work makes it possible to hire precisely the right candidate even if that person isn’t located where your organization is and doesn’t want to relocate. If a significant number of employees work off-site, an employer can realize savings in overhead—including payroll. According to one study, 34% of U.S. workers said they were willing to take a pay cut of up to 5% in exchange for the opportunity to work remotely.7 By one projection, even half-time telecommuting arrangements would save businesses an average of $11,000 per telecommuter, per year.8
Working from Home Requires A Real Home Office
If workers are doing more than the occasional work-from-home day, it’s important to have a set-up that’s more like an office than a kitchen. That means a home office, either in a dedicated room or in part of a room that gets little or no traffic during the workday. That means having the necessary technology—a computer, appropriate software, perhaps a scanner/printer, a fast Internet connection and a mobile phone. It’s best to also have quality furniture and fixtures including a proper desk, an ergonomically sound chair, and proper lighting.
A Real Home Office Costs Money
The costs can add up fast. A good chair alone can easily cost $500. Federal law does not require employee reimbursement for home office expenses. And currently most companies do not cover employee costs for working from home.9
Prior to 2018, many employees who worked remotely could deduct a portion of their expenses on their federal income tax returns. The Tax Cuts and Jobs Act eliminated deductions for home office expenses not reimbursed by the company. In some cases, the added costs of working from home now canceled out the savings realized by telecommuters (such as reduction or elimination of the costs of the daily commute). In other cases, it actually costs the employees money. That’s a problem if you decide to encourage more employees to work from home part or all of the time.
Consider Offering A Home Office Account
One way to support remote working arrangements and mitigate the employee costs associated with them is by establishing a Home Office Account. This account is employer-funded and provides remote employees with reimbursement for qualifying home office expenses. The account covers only expenses directly related to the employee’s job, and which have no personal application. Covered expenses can include:
- Work computers / tablets /laptops
- Printers and scanners
- Cell phone or land line service
- Office supplies
- Internet service and tools
If administered in accordance with IRS regulations, the funds in an Home Office Account are not subject to payroll taxes and they do not count as taxable income to the employee. At the beginning of a plan year you determine eligible employee purchases and the amount of your company’s contribution. At the end of the plan year, employees forfeit any money left unspent in their account. In order to maintain its tax-favored status, an expense must meet two criteria: have a business connection; and be substantiated or accounted for within a reasonable time period. Any excess reimbursements must be returned within a limited period.
Offering a Home Office Account can help make remote work viable for your employees. It also positions you as a leader in the growing remote work movement. Use it to recruit the best people and keep great people engaged and productive. There’s a good chance you’ll even save money.
Editors Note: TASC offers an Home Office Account as one of more than 40 benefit offerings that can be configured into custom plans that meet employee needs – where they are in life. View benefits list - https://tascresponds.com/employee-benefits/