California employers must reimburse remote workers for all necessary expenses

Many young people or those cheering for employee/consumer rights do not seem to understand that this does more net harm than good. For small businesses and startups, this can amount to millions of dollars of additional expenses. Like any economically rational entity, your employer is going to respond by reducing headcount, not hiring in CA anymore, cutting costs in your annual raises, or some combination of the above. This law does not work in your favor.

Some quick napkin math:<p>Say you work 100% remote, 8 hours a day. That&#x27;s 2080 work hours a year, out of 8760 hours.<p>That means you need to be connected to internet, have electricity, etc. 23.74% of the time - let&#x27;s round that up to 24%<p>Say a worker pays $600 &#x2F; year for internet, $2400 for electricity &#x2F; year, and - dunno - $1500 for your cellphone &#x2F; year.<p>So that&#x27;s $4500 &#x2F; year, and your employer must cover approximately $1080 of that. If the company has 1000 employees, that&#x27;s a million in extra costs.<p>Doesn&#x27;t really sound like it is going to break the bank, especially not if your employer is also able to cut previous office-related costs.<p>Also, employers would probably start to offer a bit lower salaries to the workers that don&#x27;t live in very high cost of living areas...if you pay 1000 employers on average $100k &#x2F; year, that&#x27;s a minimum $100m in annual salary expenses. If employees are willing to take a $99k salary for guaranteed 100% remote work, with the above expenses covered, then those costs are offset for the employer...

I&#x27;ve worked remotely for about 10 years now. I actually don&#x27;t want my employer covering these expenses. If the employer is covering these expenses it requires me to document the expenses and comply with employer policies related to these expenses. For instance, an employer may mandate what speed of Internet service I am required to have, where I always want the fastest option (gigabit generally) and redundant links. Filing more expense reports in the horrid system made by SAP also is not on my list of things I want to do.<p>For the ~$1k&#x2F;yr or so in expenses that I&#x27;d get back, I&#x27;d rather eat it. This is less than you spend on gas to commute and that&#x27;s not covered, so frankly I don&#x27;t care. Just pay me a fair salary with reasonable benefits and stay the fuck out of my personal life&#x2F;home as an employer.

Can I make my periodic reminder to US-Americans that two-letter state abbreviations are not universally recognized, and please to use full state names where possible.<p>The case of California &#x2F; CA is especially bad, since this is the ISO-code for Canada, so the article title is unnecessarily ambiguous.

I like the idea, but not the implementation. I think it should be done as a tax credit for the employee or the company instead.<p>Doing so creates positive incentives for companies to hire remote workers in California. Requiring the company to pay up by force of law disincentivizes companies from hiring remote workers in California.<p>I also think that it would be more equitable since an employee’s home office setup belongs to them and not their employer.

My company implemented a temporary reimbursement for internet &#x2F; phone access when we were all involuntarily WFH a few years ago. Few people bothered, even though it was technically free money.<p>The requirements for submission were annoying and repetitive, the expense system was slow and aggravating to use, the submission could be rejected for any number of unclear reasons, we all felt that it was completely unnecessary, and the amount reimbursed was nearly trivial compared to our salaries.<p>If California really wants to go this route, it should be a simple stipend added to the paycheck. Requiring companies to determine themselves the correct amount, implement their own rules, and have employees spend their time copying bills sounds like a lose-lose scenario where all parties are annoyed.

My biggest expense being remote is that I need an extra room for my office. Besides that, that would probably be heating in winter and electricity, but these are small compared to the cost of an extra room.

My wife works remotely as an accountant. We have Starlink as it’s the best internet available in our area, and we used to have an unlimited hotspot as well for other reasons. We’re very close to a cell tower.<p>Her company requires her to have some form of wired internet. So, instead of paying for the Starlink or the hotspot they’re paying for 25&#x2F;1 mbps DSL that never actually reaches those speeds. The Starlink and hotspot both are&#x2F;were closer to 200&#x2F;10.<p>We never use the DSL, apart from the very occasional heavy thunderstorm.<p>Sometimes what companies think you require doesn’t match up with reality.

So the article says these costs are reimbursable <i>if</i> you are required to work from home, but not if you are voluntarily doing it. So many of us that are required to be in the office sometime during the week but may work remote other times, how would this affect them?

They gotta get people back in those vacant, downtown offices somehow. If California can eliminate the savings that remote work brings for an employer, then maybe employers will choose to fill up those offices they are leasing.<p>But instead, this will just be a signal to any employers still on the fence to get out of California as soon as you’re able.<p>I work remote. I’m happy to work remote. And for that convenience, I’m willing to accept that there are some costs - electricity, water, heating and cooling - that I’m taking on. Why the government (and my fellow voters who choose to empower their government in this way) doesn’t allow me the agency to choose my own employment cost-benefits and trust that I can take care of myself continues to baffle.

This is a bit of a tangent but the post references an attitude in both the US and UK tax codes that grinds my gears:<p><i>If, on the other hand, you feel you are a more effective leader if you stay abreast of developing news, but doing so is not part of your job duties, then subscriptions to various newspapers are not &quot;necessary&quot; for you to do your job and would not be reimbursable.</i><p>This is a discouraging factor for employees, employers and office holders to develop ancillary skills that would improve their work because training, materials, and courses for such are not considered entirely &quot;necessary&quot; to do the job. The government then sits around wondering why per employee productivity growth has flatlined when self-improvement and education, even entirely within the scope of someone&#x27;s job, is often a taxable benefit.

Someone I&#x27;m close to is an exec in the architecture and engineering industry and during covid told me that companies are going to go back to office because of the nightmare dealing with these kinds of issues.<p>He made the point that, what happens if your employee gets hurt working from home? It&#x27;s a silly example but the employer could be liable for some reason since the employer could have failed to provide a &quot;safe working environment&quot;.<p>Not sure if this actually could happen in reality, but an employer has to <i>think</i> about these possibilities and determine the risk (and mgmt overhead) of remote vs in person

I&#x27;m a professional, I buy my own tools whenever possible. Gigabit ethernet, big monitor, nice keyboard, desk, chair, rocket fast machine. I&#x27;ve been remote for 13y. It would be nice to get reimbursed, sure, but also I don&#x27;t want to deal with the administrivia.

How does this interact with IP rights? Like say you have a single room in your house, and your employer buys you a desk and a chair. You sit on those after work to research ideas for a new startup and develop stuff on your own time. Does that now belong to the employer?

Expenses such as this are pre-tax, so there is a benefit to the <i>employee</i> for the employer to take (say) $500 a month from salary and designate it as &quot;remote worker expense reimbursement)&quot;.<p>You lose <i>less</i> than $500 after-tax and gain $500 cash (untaxed).

I’m all for workers protection but by this logic possible workers should get their commute costs covered by additional pay and at some point maybe the negotiated salary should be the default pay.

To be blunt, if reimbursing your employees for better working environment makes your business non-feasible then your business is based on exploiting workers and does not deserve to exist.

&gt; For example, one court found that when an employee had to use his personal cell phone to make work calls, his employer was required to reimburse him for a portion of his phone bill even though the employee did not incur any additional expenses because he had an unlimited data plan. The court found that any other interpretation would result in an unfair windfall to the employer.<p>I don&#x27;t necessarily disagree with the principle, but this seems like an accounting headache that&#x27;s more trouble than it&#x27;s worth.<p>Especially for bills that are at a fixed monthly cost - I already am paying for internet, the marginal cost <i>to me</i> is nothing.<p>And furthermore, if I knew someone who was so insistent on penny pinching their employer in such a way, I would ask if they really want to give their employer such &quot;hooks&quot; into their personal life and finances? Do I really want to be in a situation where I go to my employer and say &quot;as you can see, 40% of my time online was spent working&quot; and then they get to audit my records and find that 50% of the time I was spent working was also on Netflix? Is that change in precedent worth the few bucks you save?

During the pandemic, Canada had something similar, but subsidized by the government.<p>For 2020 and 2021, if you worked remotely during part of the year because of the pandemic, you would get a tax credit. The value of the credit was either flat (a few hundred dollars) or proportional to things like the size of your home office (multiplied by work related expenses like internet, power etc). It was a sizeable credit.

Does this apply to workers in CA who work for employers headquartered out of state?

The &quot;correct compensation&quot; IMO is simply a negotiated fee for the temporary rent of the home office, negotiating if the worker just provide walls or a complete office ready to work.<p>If he&#x2F;she provide just the walls it&#x27;s up to the employer provide and get back the rest. If it&#x27;s already fully operational it&#x27;s up to the employee keep it up and running.<p>For the IT part, it&#x27;s up to the company IT choosing a fully managed or partially managed setup, case by case.<p>This might sound complex and long, but it&#x27;s the way to avoid problems on both sides and a way to mitigate on both sides the &quot;quick&amp;easy&quot; change that allow employers to drop employees as objects, and employees to treat employers like stakeholders in a consulting setup witch is by far the main friction point in full remote work.

The percentage of utility bills one is entitled to reimbursement for is ripe for fraud and abuse.<p>BTW, if you have a home office, you can already deduct from taxable income a cut of those, but if you cheat on it the IRS is going to fix your wagon. The home office tax deduction also is going to reduce the basis of your profit on selling the house, meaning more taxes. Companies aren&#x27;t set up like the IRS to audit your utility bills. Besides, do you really want your employer auditing the percentage of your electricity use? I&#x27;m sure they don&#x27;t want to, either.<p>Me, I don&#x27;t care to do the paperwork required for this, and don&#x27;t do a home office deduction.<p>P.S. I&#x27;m not a CPA and this is not tax advice.

I was reading an article on California worker protections and came across a reference to this. For some reason I had never heard about this law in spite of living and working remotely in CA for years.<p>Note that it may only apply if the employee lives in CA.

The company I work for just decided that me being remote is not for the benefit of the company but for my benefit. That if I want to keep working remote I have to cover my internet now.<p>The office is in Kansas City… they hired me remote day 1, the role was remote, and I never lived in Kansas City.<p>I don’t know if I’m glad that this does not affect them or if I wish it did. On one hand it’s ~$900 more a year. On the other hand, more pressure for them to kick me if they had to do cuts.

Sounds like a low key way to force employees back into the office.

What the definition of &#x27;employee&#x27; vs. &#x27;independent contractor with a non-compete clause in their contract&#x27; in relation to this?

I saw the headline, and was going to send this to my friend who i got a job at a California company who now works remotely across the country, then realized she works for the company that owns nolo.com<p>Cute, i wonder if they&#x27;re reimbursing these days, because they didn&#x27;t reimburse anything when i was 3&#x2F;5ths remote 11 years ago.

This would accelerate back to office a bit. Remote workers seemed to have barked up the wrong tree this time

To be fair, if they are going to do that they should pay for transportation costs of in-office workers too.

Hard to look at this objectively when employees don’t get reimbursed for their commute time and expenses.

&gt; Although the law regarding these expenses is not yet decided, remote California workers may also be entitled to reimbursement for:<p>&gt; the cost of dedicated home office space<p>If that actually happens, expect lots of RTO. That extra bedroom for the home office is priced similarly to 100 sqft of office space.

My personal red line is when the employer insists a camera has to always be on in the working area. That&#x27;s when I tell &#x27;em, as nicely as possible, with an &quot;aw shucks I&#x27;m terribly sorry&quot;, that they&#x27;re gonna have to pay rent.

Point of clarification from TFA: my reading is that this applies to _any_ employer when the _employee_ is California-based, not any employee when the employer is California-based.

Would such reimbursement count as income for Federal taxes if the reimbusement is for things that the IRS doesn&#x27;t deem deductible for full time employees working from home?

I ask the opposite - should employers reimburse commute expenses for return to office workers? Gas &#x2F; electric, and time wasted on traffics etc?

Presumably this standardizes a category of expense reimbursement which is not subject to federal and state taxes.

Now if only they would do so for expenses from going to the office: gas, tolls, car maintenance, time, etc

Does this mean independent contractors and small (1-2 people) companies can start deducting these things?

Does California really want to make it more expensive to hire remote employees?

This is stupid.<p>In an ideal US world, where healthcare insurance premiums aren&#x27;t insane and aren&#x27;t skewed toward large corporations, then everyone should be a contractor.<p>The person hiring you sends you payment and you do the work in accordance with your contract. At the end of the quarter, you total up your expenses (as already allowed under existing law) and subtract them from your revenue. You owe taxes on what is left.<p>With remote work, its really hard to anticipate costs you do not control e.g electricity. Furthermore, even the IRS insists that only subtract expenses that are substantially used for work. Years ago, anyone with a home office would consider their entire mortgage a business expense. Now, its subject to a complex set of rules taking into account the time spent actually working and the relative square footage of your work area relative to your home.<p>Furthermore, isn&#x27;t this creeping into the territory of company towns? At what point would it just be cheaper to throw people into barracks, deducting room, board and laundry and simply remit the rest to the worker?

This is what happens when you have no regulations. This would of never come up if California actually regulated the electric companies and internet providers.

This is stupid as someone who would work remote for a pay cut. I will pay for the electricity, laptop, etc. myself.<p>I’d much rather have them pay hourly workers for commute time and reimburse in-office workers for gas&#x2F;bus&#x2F;subway costs.

i wonder how this would work when you are hired as remote, but your company has an office nearby?

I&#x27;m only okay with this if we also force employers to reimburse commute.

This is California. We can&#x27;t have any affordable living options.

I work 100% remote, have for over a decade, if my employer&#x2F;contractor won&#x27;t cover my expenses it tells me exactly what type of employer&#x2F;company it is. If you can&#x27;t recognize the value in me working fm home you won&#x27;t see the value in me as an employee. Hard pass.