The most popular question we receive from C-Suite executives is “Do we have a legal obligation to pay remote work-related expenses.” The answer we often give is “it depends.” But regardless of whether you have a legal obligation to reimburse your employees for remote work; Cubicly suggest you may have a moral one, and acting today, could save you time, money, and possible litigation.
Before we get started, we encourage you to speak to your legal team, if one is not available for you, a licensed Cubicly attorney can advise you based on your state and industry.
Rules and Regulations
The first consideration, under the Fair Labor Standards Act (“FLSA”), an employee is entitled to reimbursement of expenses incurred on the employer’s behalf if that expense brings the earnings of an employee below the federal minimum wage. Since most white-collar workers in the United States aren’t at risk of falling below federal minimum wage, you may be safe. However, there are several states which have enacted their own expense reimbursement laws that either meet or exceed the standard set forth in the FLSA.
Alaska, California, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Montana, New Hampshire, New York, North Dakota, Pennsylvania, South Dakota, and Washington, DC all have enacted statutes which bear on expense reimbursement. Some states (like California, Illinois, and Montana) have more robust reimbursement laws in that employers are required to reimburse employees for all “necessary expenditures or losses” or “business expenses” incurred by the employee in direct consequence or discharge of his or her duties. Other states (like Alaska and Arkansas) require reimbursement only if equipment purchased by employees for work-related purposes “cannot be used during normal social activities of the employee” or if the purchase/expense would bring the employees compensation “below minimum wage.” The second consideration is generally known as the “General Duty” Clause of the OSHA Act which states employers have the responsibility to provide a safe and healthful workplace that is free from serious recognized hazards. OSHA, (Occupational Safety and Health Act), was developed in 1970 and sets guidelines for employee safety in the workplace.
Moral and Strategic Considerations
Regulatory rules are important but the law shouldn’t limit your thinking related to deciding whether or not to provide suitable home office equipment for your staff.
The strategic argument is that offering home office equipment is a benefit that provides great incentives for both the company and the workforce. It can show that you truly care about your employee’s well-being and understanding the home can be an extension of the office for many; while also enhancing your recruitment and retention efforts as it provides a great edge to attract new talent.
Morally, if you expect your employees to work from home part or full-time, you should ensure they have the same tools and equipment at home as they do in the office. Remember, employees are your most important customers and by far your most important asset. In order to keep them celebrating their work publicly and operating as efficiently as possible organizations need to consider funding home office tools in addition to relaxing work from home policies.
In conclusion, it still depends…
So to answer the original question, it still depends. And due to the work from home surge, many more states are expected to enact measures that exceed FLSA and OSHA standards and many companies are expected to offer enhanced work from home benefits. For help understanding the rules and regulations for your state or what your workforce needs to be successful from home please contact Cubicly today. We are here for you!
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