Now, if a company has always been fully remote, then, yes, this sort of thing is ultimately going to hurt the employee because the company needs to recuperate those unplanned costs.
Personally, as a fully remote employee, I don't how to feel about this. Sure, I'd love my employer to offset some of my utility costs, but I also don't want them to assume that means they can control their use (which is their right in the context of an office space).
Yes but I would rather be paid more than waste my time and divulge a lot about my life to my employer. While these might be beneficial in the short term to those already employed this might hurt remote work employers and employees.
Really? Just ask for a raise.
All work in a roughly capitalist system does, except by temporary accident, that's sort of a defining feature.
Yes there are other expenses but you should already be providing a PC etc.
How are you getting to millions at a small company? Certainly a shop with 3,000 people is out a few million but... You have 3,000 people you are doing fine.
Heck with 20 people $1m is what $50k/person? You wouldn't spend that leasing everyone a Mercedes at $605/month.
So California is adding a bunch of administrative expenses for something that will net out to a few thousand dollars max per employee. Workers that have to go the office easily spend more than this on just commuting costs.
If they have enough slack to reduce headcount they're going to do it anyway. Companies strive to hire enough people to get the job done and no more. They may not always get it right, but minor changes to expenses aren't going to affect headcount unless the company was already overstaffed and looking for an excuse to cut employees.
This is the same mistaken thinking you see from people who oppose minimum wage increases. The McDonalds down the street isn't going to cut staff because the wages went up, they need those staff to serve customers. In face the opposite can occur. The increase in money at the bottom is a huge stimulus to demand which increases traffic and requires even more staff.
This is so incorrect that it's hard to take seriously.
When revenues go down (for any reason), companies cut costs. Most employees are a cost. Why have 2 people when 1 will just have to work harder? A company rather cut and see what happens, when push comes to shove. Many company initiatives are also re-evaluated with a bottom-line mentality when revenues are down. That project that's 4 weeks overdue for a milestone? Time to cut it and everyone involved. When revenue is up, the opposite effect. "slack" is relative to market conditions. Job security along with it.
Small companies are often lean, but it's never surprising how much leaner they will run when money gets tight. Big companies can always pare down assets and associated headcount. These are just the things I see every time revenue is down, but far from an exhaustive list.
Shenanigans. You've never worked in retail. Even if you come back claiming otherwise, I'm still going to accuse you of lying about it because you could only be more out of touch with reality if you claimed to be the ghost of Sam Walton himself.
"Necessary" staff does gets cut and the remaining employees are expected to pick up the slack. The alternative course is shaving hours off of the schedule for all employees. Sometimes they go both routes.
One way or another, the retailer will not bear that cost of increased wages. It gets suffered first by employees through reduced hours, then by customers in a degraded service experience.
You offer economic theory. I'm telling you from bitter experience what actually happens.
Another comment in the thread really nailed this well. If employers didn't pay for commute costs separately, why does this become a line item?
The employer does pay for gas and commute costs, as well as cost of living expenses...in a paycheck.
I place a high value on my home office setup so I have things exactly as I want them. I also live in a low cost of living area thanks to my ability to work remote.
A law like this is essentially there just to further incentivize the return to office policies that we've all been reading about. Now there will be an additional cost associated with going remote.
Of course it's not like the government really wants to encourage more small businesses that replace W-2 workers at large businesses, given how lopsided the tax code is against W-2 income.
The reasoning for this was that the economy could not be adequately measured if DIY work is not recorded.
This really demonstrated to me the American mindset of freedom. I have no idea about California. I think another motivation is that they are trying make sense of what will undoubtedly be a complex tax-reimbursement situation.
I have been a sole-proprietor since the 1990s. I think they are working towards normalizing that sole-proprietor lifestyle with longterm employment.
Not an additional cost, just fewer savings for companies. I'm guessing that even having to reimburse employees for internet/power they're still saving a ton of money on those things (my last office was lit up everywhere 24/7), plus not needing to rent the office space, keep food and coffee available for employees, keep bathrooms stocked up, etc.
Provision a home office? All of those expenses should be tax deductible.
BYOD? You should be able to expense a portion of the costs.
Pay for internet and power? You should be able to deduct a percentage of costs.
Have a work related meal? Tax deductible.
Drive your car to work? You should be able to deduct your mileage or depreciate your vehicle.
Pay for public transit passes to get to work? Tax deductible.
Etc, etc
There's an adjustment needed. I have worked for and applied to healthcare startups that want you to BYO device. For working on PHI. In Production.
We're not "all in this together". We all know that equity is worth nothing until proven otherwise.
Stop cheaping out and expecting your employees to invest in your success without compensation.
If that means fewer/smaller startups, small businesses? Ultimately, so be it.
This is really what it comes down to. If your business can't afford to employ people then people don't need to work for less, your business needs to cease operations.
This bizarre entitlement entrepreneurs seem to experience baffles me. I don't care if the cost of labor makes your business inoperable. Tough shit. The last year or so I've had to make a lot of adjustments to my life to account for everything getting more expensive, it happens. If your business is on such a razor's edge that you can't deal with new expenses then it sounds like your business is poorly operated.
I don't even understand how this isn't the norm. When I was hired on to my current job, they were prepared to send me home from my onboarding with everything I could need, including monitors and an expensable amount to equip an office. I didn't need really any of it because I was already setup for remote, but like, why wouldn't you be ready to do this? Asking workers to use their personal devices to do their jobs is some top tier horseshit, not only from ethics but from security perspectives too.
People rush to claim that XYZ will hurt businesses, glossing over the fact that the alternative hurts employees.
It’d sure be better for small businesses if pay was optional and employment could be forced but that doesn’t sound like a very nice world. The government could also make no taxes, give out free money, and give every company free office space.
Just because it’d be good for small businesses doesn’t mean it’s actually good for society - which is the real metric to measure.
When I did a gig for Statnett in Norway (the state owned company that owns and manages the high voltage power system) a couple of years ago; they provided a Windows laptop for me even though I was a contractor not an employee. There is no way that they would allow a device out of their control to connect to their network and services! The risks are far too high.
I could use my own more powerful laptop but only as a Citrix client.
Think this through. What happens? What happens, when it's harder and harder to build and scale small businesses? You only have big players owning everything. I am struggling with that every week here in the EU and I'm very glad I don't produce anything, as it would be even harder. So this is a fine line, where we should be cautious of both extremes. There's a word for big enterprises calling for regulation to prevent competition and hinder small companies.
California has the luxury of being able to do whatever it wants and companies not really having much of a choice to say - we'll just skip the California market.
It's a bigger market than Germany & Japan.
This would go over less well if a state like Mississippi tried it.
Sames goes I expect for "businesses hiring remote workers," only a Californian would have the arrogance to believe that all those businesses are somehow addicted to hiring in California.
So what this kind of stuff does is crush small businesses in California, and leave only the large ones standing. By the way small businesses drive most of the growth in the US and owning one used to be a way to have control over your own destiny while making a good living, but hey I guess all that stuff's out of fashion in this brave new world where only five companies matter and they have a revolving door set up between their boards and the government.
A weak argument that can be made about any general improvement to worker pay snd conditions. Its clear that societies that encourage workers rights have the strongest economies.
Meanwhile the employer would have otherwise heated up an office space and paid all bills there.
I've been remote for a decade now and it always struck me as odd, but I didn't care enough to push for it. But as the remote concept is being used by many employers to cut on office expenses, employees with no alternative should be compensated for the extra expense they incur. It's just common sense, like paying for your mileage when you drive for business.
Does the company get some input as to what the thermostat should be set to?
If you are a renter with included utilities, do they pay the landlord instead?
If you are living in a van, do they pay for your oil changes and parking tickets? Ok, I guess this last one is kinda silly.
It's trivial to add demands like this. Employers have more pull in the legislatures than employees, so be careful what you wish for.
The simple solution for fully remote companies is to just exclude CA residents.
"While the determination of whether an expense is "necessary" varies depending on the circumstances of a particular case, generally speaking, California employees who work from home are likely entitled to reimbursement"
Notice that necessary is in quotes, and the words generally, varies and likely, etc. Basically, none of this is hashed out and business owners have no idea what to pay and when. Expenses can be budgeted around but uncertainty makes this hard. And the risk of a significant surprise charge is real.
I think it's likely many businesses are just going to want to sit this out while the details are all worked out. Once the dust settles they'll do the math and make a decision.
So in the long term, it could be beneficial. In the short term, probably not.
These costs cover a lot of things, to include health insurance, retirement (401k, Superannuation, etc.), but also cost of things like a desk, licenses for an employees computer & software, building/rental insurance for the office, and expected costs of heating and AC for said office (which can be costed and amortized out over a number of employees per year, per floor, etc.).
Most of that is built in, and the cash you save by not having to heat a giant fucking office can be turned into a $1500-on-hiring stipend for office gear and licenses. That corporations got themselves locked into terrible leases, or beholden to state and local tax incentives that drive RTO is not the worker's problem.
And that's a pittance compared to the amount of cash you can save by sending the jobs out of SV or NYC to Denver, or Nashville, or Upstate NY, and paying well, well above market but still $50k less than big city rates. If I have to eat a $1500 buck remote-worker-chair-subsidy to outsource to Shasta or Redding, and save $10k in the process, then so be it.
Conversation changed as soon as they realized I was under AZ law for contracting/consulting services.
I was charging $10k per week, and one contract was a total of 6 months. The total value of that contract was $240k (before my expenses and taxes). That pool of contracting work appears to be closed to CA contractors.
1. Who pay's the employer side income taxes. Contractors pay both sides. 2. Not eligible for benefits, you have to go to overpriced open market. 3. The contractor can deduct reasonable expenses they incur. 4. A contract will not necessarily be renewed whereas for an employee, the assumption is the job will be there in perpetuity.
OTOH, like any "economically rational entity", even if the company could afford to pay expenses for its employees without needing to cut costs elsewhere, they wouldn't unless forced to by the law, whereas companies that actually have the optimal number of employees aren't going to just sabotage their business to try and fail to maintain unmaintainable profits. And if they could already take all of those measures you mention without harming their business, then not having already done them would make them irrational. The situation you describe isn't a rational business being harmed, it's an irrational one being subsidized by its employees.
So your proposal is "just pay your employer hundreds of dollars out if your own pocket".
I hate it when paying a portion of my employee’s internet bills totals in the millions for my small business
The only issue I see is with the extra paperwork this will bring.
Having said that, I still think this is a wrong measure which creates bad incentives (not trying to save money on the costs since they're partially covered by employer). This should just be a part of the compensation. Alternatively, a fixed rate for all remote workers (which would also solve the bureaucracy).
Obviously the company should be supplying laptop, monitors, etc, but unless I'm going through an egregious number of pens, paper, etc, I'm completely ok supplying it myself.
Things will estabilize at some point and it's better for 99% of people if there are pro-workers laws in place by then.
Ah yes, they pay 300k salary to devs in CA but paying for the monitor and chair is a dealbreaker.
with this attitude, we'd neber have any rights at all
Government is like XML, if it's not working just use more!
also this is not just CA. your employer is literally stealing money from you when you are using your own resources to get the job done.
Meanwhile, requirements like this have been commonplace in the EU. As well as employers having to pay mileage or the cost of public transport for their daily commute.
Similarly, laying off people is strictly limited. Instead of the US style under hiring or barely hiring enough people to cover the job at hand, which leads to animosity when people take their PTO, most companies there hire enough to account for employees not being present despite the high statutory PTO days.
Are those companies all going under? No. The only downside is that they can't reach trillion-dollar market caps, big whoop.
The companies and investors simply adjust their expectations, and the sky is still where it always has been.
Also, this isn't what's killing small business.
One can always complain that raising wages or anything else that benefits the employee directly will just make them fire you because the “small businesses” can’t afford it. But now we’re talking about some small administrative overhead in exchange for not having to provide office space, so this seems even less relevant.
The top comment is warning people that these type of laws that attempt to mandate certain behavior often backfire
No evidence.
I reject your claims. Prove that people billing their employers for certain home workspace costs “will amount to millions of dollars” over and above my regular employment burden.
/s
We just have to do it...
We just have to do it...
If your company can’t pay for the resources needed to do business, they can’t afford to be in business.
Say you work 100% remote, 8 hours a day. That's 2080 work hours a year, out of 8760 hours.
That means you need to be connected to internet, have electricity, etc. 23.74% of the time - let's round that up to 24%
Say a worker pays $600 / year for internet, $2400 for electricity / year, and - dunno - $1500 for your cellphone / year.
So that's $4500 / year, and your employer must cover approximately $1080 of that. If the company has 1000 employees, that's a million in extra costs.
Doesn'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.
Also, employers would probably start to offer a bit lower salaries to the workers that don't live in very high cost of living areas...if you pay 1000 employers on average $100k / year, that'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...
That being said, I live in a pretty population dense area and my largest cost by far is dedicated home office space. It would be nice for my company to pay for that but it would have also been nice for them to pay for gas for my commute when I had one.
I think CA is likely overplaying their hand. They are not the place of choice for many remote employees (because of taxes) and are trying hard to not be the place of choice for remote companies.
This is probably the best equivalent comparison I've seen in the thread. Paying commute costs vs paying home office costs.
Good riddance. We need the space more than we need the tax revenue. (no offense intended, the housing situation is just dire and I’ll use any excuse to convince people to move out cause so few actually people want to)
Does CA require the reimbursement of commuting costs? If not, is it not fair to view this new requirement as a backdoor way to increase return-to-office pressure?
It doesn't matter if both parties are informed, the balance of power is what matters. It doesn't matter how well informed you are if your other option is starvation.
Everyone, and I mean everyone I've ever met that makes this argument is coming from a position of power themselves. They some rare ability in a labor constrained market and want to generalized their situation to everyone without realizing the massive abuses that already occurred that mandated these rules in the first place.
How so? Are you arguing that the IRS 65.5 cents per mile doesn't appropriately compensate for costs?
So this is nothing. Employers will not flinch at this.
"You did the math wrong. You cheated me. I'm getting a lawyer!"
For the ~$1k/yr or so in expenses that I'd get back, I'd rather eat it. This is less than you spend on gas to commute and that's not covered, so frankly I don't care. Just pay me a fair salary with reasonable benefits and stay the fuck out of my personal life/home as an employer.
Specifically, you can as an individual, but the company would be obligated to enact policies that require its employees to document everything to shield itself from liability, the likely end result is that not documenting such things could be grounds for termination.
The case of California / CA is especially bad, since this is the ISO-code for Canada, so the article title is unnecessarily ambiguous.
It doesn't help that the official subdivision code for California according to 3166 is "CA".
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.
I also think that it would be more equitable since an employee’s home office setup belongs to them and not their employer.
Of course, there are loopholes, this model breaks down when you're talking about deducting a random boat you take clients out for fun. In this case we're talking about remote work.
I think that the taxpaying public receives benefits from the remote work arrangement; such as less traffic, noise, pollution, and consumption of public resources such as roads.
Strictly speaking, if we're talking federal taxes, then post TCJA the IRS does care who takes the deduction. W-2 employees can't deduct expenses like that anymore. Not that big a deal for Internet costs, but it hits some professions pretty hard (e.g. professional musicians where the instrument is quite expensive relative to their income).
That said, I think it should be more on the business than on individuals. Individual taxes should probably be handled nearly entirely automatically for most people, with nothing more than an approval step required.
This was my thought as well. By increasing the burden, companies will just stop remote positions, something they are inclined to do already.
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.
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.
If you already have an office/den to work from, I can see how it's not a big deal. But if you're looking at buying a first home and your requirements go from one or two bedrooms to three bedrooms/1 bedroom & two offices, that's brutal.
From the link
> Although the law regarding these expenses is not yet decided, remote California workers may also be entitled to reimbursement for: > * the cost of dedicated home office space (reimbursement is more likely if the employee was renting or had plans to rent the space to a third party prior to beginning remote work). (Cal. Lab. Code § 2802 (2022).)
If that actually happens I would be very shocked/impressed. But I'm highly cynical of how wants vs needs are going to be interpreted there. To me the mental health benefit of being able to physically leave work is a need, but I know not everyone is likely to see it that way.
That room is more than wanted...
ADDED: If you don't have an option to go into an office, a stipend for a co-working space may be reasonable.
Good luck with your debilitating back issues in 10 years.
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 25/1 mbps DSL that never actually reaches those speeds. The Starlink and hotspot both are/were closer to 200/10.
We never use the DSL, apart from the very occasional heavy thunderstorm.
Sometimes what companies think you require doesn’t match up with reality.
Why would your wifes employer compensate for a tool that doesn't meet their needs?
The hotspot worked just fine in thunderstorms and was significantly faster. I even had our router set up to automatically bump over to the hotspot for the rare occasions the Starlink went down.
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.
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.
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 "necessary" for you to do your job and would not be reimbursable.
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 "necessary" 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's job, is often a taxable benefit.
This whole area is a gray mishmash of arguments (does buying pizza for the office count as an expense or a salary item? Depends on frequency, the tax courts, etc).
I personally pay for O'Reilly's service, which my employer used to provide, and just see it as an expense of my profession. I'm also paid drastically more than average because I'm knowledgable about more things and have more ideas to draw from.
I'll happily let my employer pay for things that also benefit me personally. But I'm also not going to begrudge every equipment purchase or travel expense to buy/do things I want even if they're also connected to work in some manner.
Going from the growth in GDP, that does not seem to be true.
He made the point that, what happens if your employee gets hurt working from home? It's a silly example but the employer could be liable for some reason since the employer could have failed to provide a "safe working environment".
Not sure if this actually could happen in reality, but an employer has to think about these possibilities and determine the risk (and mgmt overhead) of remote vs in person
(But then, how far does that go? A non-slip mat? Shelving? Rewiring your home for old electrical?)
You lose less than $500 after-tax and gain $500 cash (untaxed).
I don't necessarily disagree with the principle, but this seems like an accounting headache that's more trouble than it's worth.
Especially for bills that are at a fixed monthly cost - I already am paying for internet, the marginal cost to me is nothing.
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 "hooks" into their personal life and finances? Do I really want to be in a situation where I go to my employer and say "as you can see, 40% of my time online was spent working" 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?
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.
If he/she provide just the walls it's up to the employer provide and get back the rest. If it's already fully operational it's up to the employee keep it up and running.
For the IT part, it's up to the company IT choosing a fully managed or partially managed setup, case by case.
This might sound complex and long, but it's the way to avoid problems on both sides and a way to mitigate on both sides the "quick&easy" 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.
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'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'm sure they don't want to, either.
Me, I don't care to do the paperwork required for this, and don't do a home office deduction.
P.S. I'm not a CPA and this is not tax advice.
Note that it may only apply if the employee lives in CA.
The office is in Kansas City… they hired me remote day 1, the role was remote, and I never lived in Kansas City.
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.
Cute, i wonder if they're reimbursing these days, because they didn't reimburse anything when i was 3/5ths remote 11 years ago.
> the cost of dedicated home office space
If that actually happens, expect lots of RTO. That extra bedroom for the home office is priced similarly to 100 sqft of office space.
There has not been a point in the last 40 years where they shouldn't be
https://www.irs.gov/credits-deductions/individuals/home-offi...
In an ideal US world, where healthcare insurance premiums aren't insane and aren't skewed toward large corporations, then everyone should be a contractor.
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.
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.
Furthermore, isn'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?
I’d much rather have them pay hourly workers for commute time and reimburse in-office workers for gas/bus/subway costs.
Otherwise why don't companies pay for my gas/tire/shoe soles/&c ?
https://hbr.org/2020/08/research-knowledge-workers-are-more-...
