We’re expecting employee reimbursement entitlements to be a hot topic in the near future. In several states, California included, employees are entitled to reimbursement for reasonable work expenses when they’re required to work from home.
In the past, telecommuting expenses haven’t been reimbursable under California law because it has been optional. Employees have had the option of coming to the office to use company supplied internet, equipment, and supplies. But this wasn’t the case during the pandemic.
A huge portion of employees have been required to work from home during the pandemic. Depending on the work your employees undertake, you may need to reimburse your employees for a portion of their:
- Cell phone plan;
- Personal computer, tablet or other device;
- Teleconferencing software;
- Teleconferencing hardware, including cameras and microphones; and/or
- Desks and computer chairs.
For employers, recruiters, and HR managers, you need to be aware of these potential entitlements and develop appropriate policies and procedures for reimbursement. You will need to create and implement a process for submission and review of reimbursable expenses.
Helpful tips for developing your employee reimbursement policy:
- Your policy should include a process for employees to submit reimbursements and also to request additional funds or a review of their expense claims.
- Your policy should outline that expenses should, where practicable, be approved in advance. This will help limit the number of unnecessary expense claims.
- Equipment paid for by the company for workers to use at home belongs to the company. Your policy should state that employees will need to return the desks, computer chairs, and other equipment and hardware supplied – or purchase their own upon request by the company or at the time of termination.
- You must pay a ‘reasonable percentage’ of expenses where those expenses are prorated between personal and professional use. Your policy should outline the methods you use for determining a ‘reasonable percentage’ and the factors you consider. You can use some discretion. For instance, you may not need to pay one quarter of your employee’s home internet plan if that plan is also used by their children and partner. Employees should be permitted to submit a request for additional coverage if their work expenses exceed the “reasonable percentage” provided by the company.
- You should routinely audit expense reimbursements to ensure proper coverage.
- Providing a small monthly stipend may leave you vulnerable to claims. If you do offer a monthly payment, you should outline exactly what is covered by that stipend. You should also implement a process that allows employees to request additional reimbursement for costs not covered by the stipend.
For now, we aren’t seeing a lot of these claims because workers are happier working from home. At this point, they may not want to stir the pot. The reality is, however, that it’s an area of law where employees can claw back money so they are bound to start trickling in, and may result in a flood of claims.
If you need help determining your workplace obligations or creating your employee reimbursement policy, reach out. We’re here to help.
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