Are Employers Required to Reimburse Employees While Working From Home?
Working from home, as millions more of us are doing now because of the coronavirus, has several advantages. No wasted time on commutes. Fewer interruptions. Better work/life balance.
And with the spread of COVID-19, of course, perhaps the biggest advantage: Reduced likelihood of getting seriously sick.
On the negative side of the ledger, at-home workers may incur necessary expenses to do their jobs. For many employees told to work from home, the task of putting together a home office can be challenging. They may have had an outdated old laptop, inadequate Internet bandwidth to handle multi-party Zoom calls, no proper workspace, no ergonomically correct office chair.
What Are Employers' Obligations?
Getting up to speed can be expensive. So, is your employer legally required to reimburse you for these new expenses?
The answer is that it largely depends on where you live.
An employee who is asked to work from home can always ask their employer to compensate them for any expenses necessary to set up a home office. But only some states require employers to do so. These include California, Illinois, Iowa, Massachusetts, Montana, New Hampshire, New York, Pennsylvania, and the District of Columbia.
Like most of the other states who require it, California says that employers must reimburse at-home workers for "all necessary expenditures or losses" they incur while performing their jobs. Exactly what qualifies as "necessary expenditures" can vary from state to state, however. Presumably, items like paper, pens, and printer cartridges would be included. So would cell-phone and Internet use, although employer and employee would likely have to come to agreement on percentages.
Nationally, the U.S. Labor Department has not placed any strict reimbursement requirements on employers when they tell employees to work remotely. DOL issued an advisory in March that employers can't require employees working at home to pay for business expenses when it reduces the employee's earnings below required minimum-wage levels. But the agency said nothing about whether an employer must reimburse at-home employees for their expenses.
That advisory followed a declaration by President Trump that the pandemic is a national emergency. Trump's declaration gave employers the power to make tax-free payments (and receive corresponding tax deductions) to employees who are impacted by COVID-19. The payments can't be for income replacement but can be reimbursements for qualified expenses that employees face as a result of the pandemic. Those expenses include the cost of setting up and operating a home office.
No Home Office Write-Offs for W-2 Employees
Employees who are familiar with the home-office tax deduction may be disappointed to learn that the write-off only exists now for self-employed people. Following the Tax Cuts and Jobs Act of 2017, W-2 employees can no longer take that deduction. Nor can they deduct any office-related expenses on their taxes.
So, if you think you deserve reimbursements for home-office expenses, the best option is to ask your employer. In some states — the ones listed above — they're required by law to compensate you for reasonable expenses. In other states, just hope that your employer is reasonable.
The ergonomically correct office chair might be a tough sell, though.
- Essentials for Your New Home Office (FindLaw's Technologist)
- Tips for Staying Productive When Working From Home (FindLaw's Strategist)
- How to Keep Your Wireless Network Secure When Working From Home (FindLaw's Technologist)