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.
Fully remote work has always benefited the employer more than the employee, at least financially. Before the pandemic closed my employer's local office space (we were all told just to work from home), part of the employer's budget for each employee included infrastructure costs (office space, furniture, internet access, maybe food, beverages, etc). My salary did not change when I became fully remote, so the company realized significant savings by telling one hundred to just work from home.
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).
Not just time, but cost also. As my wife also works from home we've been able to scale back to a single car for 2 years now. Since owning, insuring, fueling, repairing, and maintaining a car typically runs $6k-$10k/year (depending on your tastes and mileage) I've gotten a substantial financial benefit from being remote.
Unless it was already a short-term lease agreement, which is not super common in CRE, chances are your company was still footing the bill for their lease on that office space. Most office space is leased on 5-10 year terms.
different contracts. ISPs may or may not be tied to the building. Our bandwidth in our offices was generally on 2-year contracts. We were locked into the building for 10-years, but if we wanted to turn off the power and water and phones we could have.
> I'd love my employer to offset some of my utility costs.
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.
A computer uses 150kWh/year @ $0.42/kWh that is $75/year. Certainly internet is possible at $60/month so $720/year. Say you have a generous $500/5 years for equipment plan and you are still below $1,000/year/employee.
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.
> A computer uses 150kWh/year @ $0.42/kWh that is $75/year. Certainly internet is possible at $60/month so $720/year. Say you have a generous $500/5 years for equipment plan and you are still below $1,000/year/employee.
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.
How would this be a huge admin expense? Any company with remote employees already likely have some expensing process, would be probably as much as adding another expense category at best.
What's the admin expense? Won't it just be another line item in the paycheck? It's only an issue if the employer makes requests that exceed the that budget and get called out.
If it's just a fixed amount refunded to all employees, agreed there's no huge admin expense. If employees have different amounts (depending on their circumstances) that they get refunded, there is a lot of complexity required to set rules around what is acceptable, track receipts for these expenses, and have someone review and approve these.
For example, we used expensify at a previous company, and ignoring the human admin cost, there was a $20 / expense report fee the company had to pay.
This is where a little creative problem solving could come into play. You know, having all those "administrators" actually do their jobs.
One simple way to set this up that minimizes administrative overhead is to estimate a base amount for each remote employee, and automatically reimburse that amount. If the employee's actual expenses exceed the base amount, then and only then do manual processes and $20 expense reports need to be involved.
When I said "for each remote employee," it would probably work best to have the base amount set up individually for each remote worker, based on relevant factors such as cost of electricity and such, when they start working remotely. If the base amount proves to be consistently too low, after a period of say, 6 months, then the employee could file some sort of amendment and have the amount reviewed. If the increased reimbursement based on the amendment request is determined to be reasonable, then just retroactively reimburse the difference to the employee and continue forward with the new base amount. It should also probably be re-reviewed yearly.
That should get it done for every remote employee in the company, with a maximum of around 2 manual interventions per year, rather than an expense report every 2 weeks or anything ridiculous like that.
Simple when someone gets hired they list their internet expenses.
Also isnt this basic admin just the cost of doing business?
I should probably not tell you that in europe its common to be reimbursed for traveling expenses when going to the office. Calculated per commute at 0.19 euro per kilometer. So its unique per employee. No company has gone bankrupt due to administrative weight yet.
> No company has gone bankrupt due to administrative weight yet.
Administrative weight has absolutely been a factor in companies collapsing. That's an absurd statement.
And as a specific example, the company I work at just does a blanket credit for work from home expenses to every employee to avoid the administrative overhead. Yes it's not a huge admin overhead, but it's one more thing a company has to read and understand the rules on (in each state), enact policies / processes for, and have an employee process reimbursements for.
Frankly, as an employee this just feels unnecessary. I'm already comparing the cost of commuting, work clothes, etc when deciding where to work. The "work from home expenses" end up being less than the "work from an office" expenses, so I'm not sure why California finds it necessary for employers to reimburse one but not the other. It's adding extra complexity for fairly limited benefit (something California seems to be great at).
Average Cali salary is 73k. Assume an employee stays for 2 years (I just made this number up, I have no idea what the average retention for a remote worker is, but it’s probably more). It would barely represent 1% of total renumeration for the employee. “Significant” is not a word I’d use to describe a 1-2% cost to an employer.
Gross is silly you need to talk net. Living wage in California is like 37k before taxes 43k if you include taxes on that and assuming a tax rate of around 25% of the rest that means you have excess take home of $22,500 a year.
$2,000 a year would be around 10% extra income not related to staying alive.
I wouldn't call 10% a minor deal.
Also your point about 1-2% cost shows why this is a good bill. Cover the things you need to, pay a few points of payroll and get a significant benefit for your employees.
https://www.eia.gov/electricity/monthly/epm_table_grapher.ph... “Average Price of Electricity to Ultimate Customers by End-Use Sector,
by State, August 2023 and 2022 (Cents per Kilowatthour)” — according to this, both $0.42/kWh and $0.06/kWh would be outliers, relative to any state-wide residential averages.
We're in Alameda, who run their own utility and buys their power from PG&E and our rates are $0.15/kwh. I don't know how PG&E still exists as an entity, they were deserving of the pitchforks a long while ago.
The cost of the power itself is not the driving cost of electricity, it's the distribution and grid maintenance costs. PG&E can sell power delivered easily and in bulk to Alameda in the heart of the bay area quite cheaply. Delivering the same kWh to all of the smaller communities in the rural north third of the PG&E coverage area is where much of the costs are.
Hello fellow Alamedan! AMP is great — very grateful for a little abstraction between us an PG&E, despite it being all the same at the end of the day...
I moved out of CA but it was already 0.40 a couple years ago. My friends told me it’s close to 0.60 now. I’m more curious where you are, I’m in a low(er) cost of living and I still pay 0.17.
We're around there (hand-waving here about exchange rate) in Scotland. What's fucked up is that most of the UK's power is generated in the north and yet electricity rates are based on how far you are from London.
Here in South Africa the rate is about 0.15 (USD, depending on exchange rate), but they keep turning off the electricity because the state-owned utility cannot make enough of it. Load shedding they euphemistically call it instead of the blackouts it really is. Of course they also complain about loss of revenue because we use and thus pay for less kWh if they keep turning it off.
Somewhere with real time pricing. The cheapest normal pricing is down around 12-13 cents per kWh. Granted due to the enormous nuclear base load in Chicago, I routinely pay 1-2 cents per kWh. I paid zero cents at 4am.
> your employer is going to respond by reducing headcount
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.
> If they have enough slack to reduce headcount they're going to do it anyway.
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.
1 having to work harder works when 1 will actually work harder...
The problem is that is a failing paradigm these days and it's not uncommon to walk to up locations that say "closed, no staff".
If the 'no immigration' voices get there way expect to see a rapidly declining population here in the US and these businesses that are used to abusing labor start to freak out.
"Closed, no staff" is quickly followed by "Retail space for rent". If you see that sign you can rest assured that the business is poorly managed.
Beyond the low pay it is quite likely that the manager is an asshole and the reason he can't find workers is because for what he's offering there are loads of opportunities for jobs at better managed stores in the area. This is a person who was spoiled when the job market was tight and now can't adjust to a new reality where people have options and if you suck they won't choose you. If the business isn't profitable without effectively slave labor then it was poorly structured.
I don't think it's puzzling, at all but is instead smart rhetoric that exploits the protestant work ethic. You get to pay people less, and those people get to pat themselves on the back for their superior work ethic. It strikes me as a similar trade to how we pay teachers and NASA scientists less money because they get increased social standing.
When revenues go up (for any reason), companies cut costs. Why have 2 people when 1 will have to work harder?
Your argument is completely wrong, yet you start by berating the other poster. Companies will always cut costs and try to whip their employees as much as they can, regardless of if they're making a profit or a loss. That is business.
> 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.
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.
I've worked retail. Employers try shenanigans like that, but it backfires because the lines get long and people start looking at alternatives. Business suffers, and then either they hire the people back or they go out of business.
There is always the threat of laying off staff instead of paying more, but only a relatively minor portion of management is enough of a maniac to actually go through with it. I worked at a McDonalds during a minimum wage hike (you can tell this was a long time ago), and while everybody said it would result in cut staff few went through with the threat. Sure you could find examples here and there, but at the end of the day they were already operating with the minimum amount of staff they could get away with. There was no slack in the system.
McDonalds corporate even realized this and started talking up fully automated restaurants. I think they even built a pilot store somewhere. They dust it off anytime people start talking about minimum wage hikes, even though it makes no sense economically even if we were to double the minimum wage overnight.
Worked 16 years for an owner-operator in Southern Cal. Every time min wage was increased, the number of hour permitted was limited so that total payroll remained the same. So sure we might not have had layoffs, but we definitely had less people working. This behavior was consistent with all the franchisees in So Cal.
> McDonalds corporate even realized this and started talking up fully automated restaurants.
IMO, this is going to happen at some point anyways. It's only a matter of time.
In the short term, it's going to cost a LOT of money to develop, deploy, and work the bugs out. But in the long term, it means there's literally hundreds of thousands of workers they could replace. They will eventually see an RoI.
>One way or another, the retailer will not bear that cost of increased wages.
They will try to avoid it before the increase, and they will try harder after. That doesn't mean they can have a 100% unmanned mcdonalds if minimum wage somehow shot up to $30. And given that McDonald's main revenue isn't even on food, it's not even a good idea for that specific company to shut down locations over increased wages.*
That's clearly why they are investing more into those automated tellers. automation is the only way to reduce headcount but not affect throughput.
*Other chains might, though. I do wonder in this scenario if this would lead to small business rising up as large business find it untenable to hire entry level labor. I don't imagine so (they will pass the costs to the customer), but it's an interesting thought experiment.
One of many reasons to have a personal LLC/S-Corp in my opinion.
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.
A fundamental business dynamic is that transparently passing on expenses is a low margin behavior, while comping more things for "free" and charging for produced value leads to higher margins. Personally I'd rather workers have higher margins (ie higher pay) while personally choosing how to spend some of that income to fulfill the job requirements, than receiving lower pay while being able to nickle and dime employers for bureaucratically-approved expenses.
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.
One weird thing I learned about one of the Scandinavian countries is that part of the reporting taxes is reporting of labor for DIY home improvement.
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.
No, there is no such thing in "Scandinavian" countries about reporting labor when doing DIY home improvements. You can deduct the material, or bought labor, when selling the house. But no your own labor, unless you run a company and hire yourself. That might work, but then you have to spend taxes in your company for that income.
Clarification: This is in Sweden, a Scandinavian country.
Edit #2: If you have a specific country in mind, please mention that instead. Makes it easier to refute.
Sorry, it was I believe a comment on HN that told a story of having to track their own labor on a home improvements.
This tracking needed to be reported so that economic growth could be better measured.
I couldn't remember the specific country so I referred to it as a country in a region. I also couldn't remember the reporting process and assumed taxes.
I was reminded of the comment when I read the California story. I thought many of the comments were too cynical and narrowly focused. I wanted to broaden the conversation by pointing out that there are many reasons to collect data have new definitions of labor.
I consider HN as a place to throw out thoughts and see the reaction. I don't state anything I don't believe to be true. I'm happy to correct my worldview as needed through dialog.
I certainly do not claim that the notion is true, most likely any false hood is through my poor understanding and expression.
I certainly mean no disrespect to any social effort to create an equitable base line for human existence. I have great admiration for the region of Scandinavia and the Baltic Region as well.
I'm currently from the New England region of the United States.
I wasn't trying to make a statement regarding superiority of one type of social organization over another.
The point I thought was critical is that labor data is used by governments for central planning.
> 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.
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.
I agree, honestly I feel a much better solution to this problem would be to extend the same tax advantages that you allude to when talking about a personal company to W2 employees.
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.
> 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.
Thank you. Businesses don't have some inherent, natural, god-given right to exist. We, the people, through the state, graciously allow them to exist and regulate them so that they operate in accordance with some public good. And even then, they have to earn their existence by being a financially viable business. It's a big hurdle, deliberately so.
This idea that, ohhhhh we can't regulate business because it will make them sad and even make some of them go out of business! The horror! They are not entitled to exist in the first place.
First of all almost all of them don’t make it. They aren’t entitled for anything, they fight for any success. And the odd is heavily stacked against them. Check with your local restaurants.
Second of all small businesses provide the majority of the jobs. Your income directly or indirectly rely on the success of small businesses. Your town is kept safe and clean thanks in no small part to the tax money they pay.
You’d want them to success, not berate them with “the horror”. They have to operate within laws and regulations of course. But there are good and bad regulations. Keep the good ones. Take the bad away.
You might want to retake your constitutional law courses. The Commerce Clause (Article I, Section 8) grants the government power to regulate business. It does not grant citizens the right to do business. The right to do business and participate in commerce and trade is a natural right. You do not allow businesses to exist. You are nobody.
Then being more specific: you do not have a right to a profitable/successful business. Nobody is required to inconvenience themselves for the benefit of your business and pocket.
> Yup. And often those same people will say to others "you need to live within your means".
And it's ONLY when the given expense is labor. That is the only time this small business apologia goes on a rampage decrying whatever it is. Materials? Rent? Consumables? Safety stuff? Nothing. Crickets.
Laborers are asking for something to offset their costs to work for you? The shit hits the fan and we get a round of think-pieces about entitled workers.
> 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.
No, you’re not supposed to say that. You’re supposed to immediately concede when someone brings up the holy institution of the Small Businesses. :/
Honestly my life would get notably better if a few different VC-burning silicon valley companies would hop in a deep fryer, so this really isn't the threat you think it is.
> If that means fewer/smaller startups, small businesses? Ultimately, so be it.
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.
> glossing over the fact that the alternative hurts employees.
...And, potentially, the planet.
In my mind it's reasonable to expect employers to cover costs of things like equipment. But, I do wonder how much CA is considering it's own interests here. It seems like this could be abused to do things like bring people back to downtown areas impacted by COVID or lightly discourage hiring employees who don't live in state (and therefore pay sales tax.) That case could also end poorly for society (and the planet.)
It sounds like these aren’t actually new laws, and aren’t California specific, so it’s probably not the intent. This seems too conspiratorial on the part of the state.
According to the article, it’s mostly driven from lawsuits from employees. The basis is that if the employer uses the employee’s internet, it has to pay for part of the bill, because otherwise it’s an unfair “windfall”.
It rather seems like basic protections to prevent employers from offloading expenses onto employees.
> healthcare startups that want you to BYO device. For working on PHI.
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.
> If that means fewer/smaller startups, small businesses? Ultimately, so be it.
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.
No one has ever tried to ban you from saying no to any of the arrangements you described, but you will advocate to ban me from saying yes? Why don't you mind your own business?
That would be true except the types of companies hiring a lot of remote workers already have a lot of remote workers in California.
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.
This simply isn't true except when you're talking about the largest companies. The vast majority of American businesses don't have a place of business in all 50 states, or retail outlets, etc. etc. -- the majority of American businesses are small, operate in one or a handful of states, and as a result do in fact skip California.
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.
California does not care if some 2 person company in Ohio will be slightly less likely to hire a 3rd person remotely from California - the number of remote jobs going to California from these types of companies is close to 0.
Even if you assume 100% of them go away - I'd wager voters in California would prefer to have current conditions improved than an ever so slight increase in opportunities in the future.
Yes - small businesses employ the majority of workers. Do small businesses from outside of California with no current presence in California making new hires into California in a given year make up even 0.1% of total jobs? No.
On the flip side - close to 20% of Californians work remote full-time. And some estimates are as high as 40% for workers that work from home at least once a week.
Higher cost jurisdictions experience a hollowing out of their economies over time.
Last mile, geographically constrained jobs like transport and retail remain, but higher skill jobs that are mobile leave, either because it was more cost effective for the employer or because the employer couldn't compete and failed.
Australia experienced this and its economy now is little more than primary resource extraction, all shipped overseas for processing and value adding. Some basic service industry jobs, like retail, but none of them go anywhere because the companies don't have any real presence here except a shopfront.
California has been extreme cost since the early 2000s and it's been on a non-stop boom (almost 50% higher GDP growth than the US average - keep in mind that's with CA's outsized weight lifting up the rest of the nation - https://united-states.reaproject.org/analysis/comparative-tr...)
Yes, the middle class is being hollowed out - but is it really significantly more so than anywhere else in the US?
> Higher cost jurisdictions experience a hollowing out of their economies over time.
That doesn't seem to be true of Norway. But Norway retains control of much of its primary resources. Australia could do the same; it's a political problem not a directly economic one.
> 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.
It's not arrogance when history bears it out time and time again.
> So what this kind of stuff does is crush small businesses in California, and leave only the large ones standing.
You are claiming that small businesses will stop existing in California if employers have to pay necessary costs? The same ones they'd have to pay in an office setting, less rent? Doubt.
> Like any economically rational entity, your employer is going to respond by…
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.
GDP is a poor measure of a country’s prosperity or standard of living.
Based on GDP numbers Italy is barely ahead of Mississippi, even though spending 10 minutes in both will make it readily apparent that one is miles ahead in terms of prosperity than the other.
> GDP is a poor measure of a country’s prosperity or standard of living.
So much this. Even if you do "GDP per capita", it's a piss-poor measure.
I think the greater measure of a country's prosperity is wealth equality. There will always be outliers, but how are the people in the 20-80 percentile doing?
It's a small expense for employers, and can be a real difference in costs for the employee. I don't think you're correct. If I spend 100% more on heating everyday because I work from home so need to heat 24/7, that's nothing to an employer (100-200$/m) but could be a significant deduction from a family's budget.
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.
This seems hard to work out (I guess I should read the bill first, but), for example if someone has a stay-at-home house or some roommates, kids, etc, does the company have to work out the incremental cost of heating the house for one additional person?
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.
This is all somewhat settled law. It's the same rules as a home office deduction but with exceptions. They pay based on the square footage of your dedicated workspace compared to your home.
If you don't have a dedicated workspace, you can't take the home office deduction and your employer technically doesn't have to reimburse you anything (so this is more beneficial to wealthy people with dedicated home offices).
But why not then demand that your employer cover your [reasonable] commuting costs, and even pay you for [reasonable] time spent commuting? That would greatly exceed your WFH costs, no doubt.
It's trivial to add demands like this. Employers have more pull in the legislatures than employees, so be careful what you wish for.
I think California already requires employers to do that.
What I find surprising is that everybody thinks employers are going to jump all over these requirements and work their hardest to make sure they are 100% in compliance instead of mostly ignoring them and making only a token effort to be in compliance. "We offered to buy chairs for the workers, what more do you want?"
We’ll start being asked for utility bills during interviews and recruiters will screen for people with heat pumps. “Candidate must have updated insulation and new windows”
There's standard rules for car travel expenses, I don't see why not do the same for offices. People don't expense their Dodge Charger's gas bill, they expense standard reasonable fixed rate. Working from home isn't free, offloading all of the cost on employees seems like a use of employee resources without compensation. I'm not dying on that hill and it doesn't bother me at all to pay for it all myself, but it really strikes me as the same thing as use of personal car for business purpose == reimbursement. It's chomp change to me, but it's probably not for many people.
Who's going to background check every candidate's house on order to save up on like, $4000 a year for a very inefficient energy setup?
The worst reality is they will estimate and then cut that expense from your offer. Still, $5000 less for the kind of work offered remote isn't a deal breaker.
And moreso than even the additional expenses, the expense of tracking these expenses for a small company is non-insigificant. There's the cost of the expense tracking software, setting up rules for what can be expensed, figuring out what this new law requires, and having someone approve those expenses.
The simple solution for fully remote companies is to just exclude CA residents.
I think in the short term, you're definitely right. It does not work in your favor if you want remote work in CA. The key issue is this, from the article:
"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.
They should do it the other way round: employer has to reimburse you for your commute and pay commute time as work time. Guess how quickly companies will put pressure on legislation to solve the housing problem.
Nah. Conventional wisdom says that "front loaded costs" of an employee are anywhere between 50-100% of an employees salary.
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.
Only a availability heuristic, but I closed 2 consulting contracts that were a _hard_ "no we don't hire contractors" by letting them know I don't live in California.
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.
Correct me if I am wrong but the only material differences between contractor and employee status are
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.
I can't speak definitively to this, I wasn't in their seat.
By my understanding is that they were concerned about the liability of a consultant/contractor under CA law because you can retroactively be relabled as an employee at any point in the future causing the business to be liable for unpaid taxes and possibly benefits?
I could be wrong but I think contractors show up as a different kind of expense on the balance sheet vs an employee. In same instances it's more favorable to hire contractors than employees.
Arizona has a similar "right to control" test for IC vs employee that California does, so the legal differences are minimal. If you would be reclassified as an employee under CA law, you're 90% likely to be classified as an employee under AZ law as well.
> 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.
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 no new startups? That ultimately hurts wages and offsets any cost savings from employers paying for your home internet which you’d already be paying for anyways
If a very new startup of 5-10 people can't buck an extra (being very pessimistic) $40k a year in employee expenses in a state that already has high CoL and labor that regularly expects 200k salaries: No, I guess not. That can be something to negotiate at offer time, or to consider relocating the startup for.
>That ultimately hurts wages and offsets any cost savings from employers paying for your home internet
overtime, maybe. It's a win-win for those already employed and not a signifigant damper of salary for those employed in the future. But it's not like salaries will be droppinig 20-30k from this decision alone.
That would be a lot of marginal startups such as lifestyle business running on <5% profit margins, and it's hard to see how making them fold could ever be a good thing.
Plus all the previously slightly-better-than-marginal startups will now descend to being merely marginal.
I don’t think it’s completely either-or. There are companies out there that would try to negotiate favorable bulk-rate home Internet plans. This might not have been possible in the past, but 5G home Internet and Starlink make it more possible since these companies have a BATNA with traditional providers.
Remote people are/will get paid less than on-site people on average, with this in mind I don't think these (relatively small) additional costs will have a significant effect.
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).
No chance in hell that work at home expenses are anywhere near the lease cost (or even taxes!) for office space. Not even in the same order of magnitude.
If you are using your own equipment and resources, how are you an employee and not a contractor? Businesses should compensate because the agreement is the business uses their capital and your labor to make money. But if they also use your capital in addition to your labor, then the employee needs ownership of the business because they are devoting their capital to the business.
My first thought when reading the headline is that I'm ok paying for most personal things if I get to work remote as it means I'm more likely to work remote.
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.
Employers are going to reduce headcount to a minimum regardless. And these millions of dollars of expenses aren't 'additional'. They are already been paid for by the employees. Employees shouldn't have to subsidize the business.
Not to mention I have seen people abuse home office budgets and buy things not related to work. You are already getting paid, as a small business owner this culture of abusing companies runs rampant especially with millennials for some reason.
The only people we should expect to benefit are existing employees for ~1 year. After that it will be priced in. What an administrative and legislative waste.
lets just call it the cost of doing business, if i am working for some one THEY should be the ones bearing the costs of the equipment required for me to work for THEM. I give them my time and they pay me. All that is needed to get the work done is employers responsibility.
This is the tired old Libertarian Anthem of "All regulation that helps [workers or customers] will backfire because it incentivizes businesses to [do worse behavior]." The solution is not to throw our hands up and say we cannot possibly regulate businesses because they're so crafty and will always get around it. The solution is to write more comprehensive regulation with fewer loopholes, such that the other, worse behavior is also regulated.
The good old “the sky will come crashing down” FUD is still in full swing, I see.
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.
What? They save on office space. They don’t have to rent the employees home office or bedroom. Then they lose a little on administrative overhead. It seems like a net win for the employer compared to in-office.
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.
Similar to how California made a law that prohibited charging for access to public restrooms. The intention was free public restrooms for everyone but the result was that most of the public restrooms closed up and it’s harder than ever to find somewhere to go.
The top comment is warning people that these type of laws that attempt to mandate certain behavior often backfire
I find it funny how California causes its own issues, makes laws to fix said issues, and then causes more issues as a result. Living in Utah which tends to be a very anti-business-mandate place, and which does not have any such law, I've never had to pay for a bathroom. In fact, places where you have to ask for a key from a clerk are quite rare as well.
Watching California gradually kill itself through administrative bloat, Orwellian laws, and degeneracy has been quite entertaining.
> Living in Utah which tends to be a very anti-business-mandate place
Very non-coincidental that Utah has one of the highest concentrations of MLM businesses in the country.
Or the "industry" of "youth treatment" that is centered in Utah. Conversion therapy, etc.
Thousands of allegations stretching decades of abuse, physical, sexual and emotional, federal inquiries.
And still the Utah Office of Licensing rubber stamps its inspections of such facilities:
> analysis by APM Reports and The Salt Lake Tribune reveals that those inspectors almost never find violations. More than 98 percent of the time, they check the box marked "compliant." Across the 670 reports, the data reveals inspectors assessed more than 53,000 items in total. But they documented only 861 deficiencies. That means inspectors determined that treatment programs were noncompliant only 1.6 percent of the time.
> The most common ding? Not having the proper employee paperwork.
You might sit back, "entertained", by California. But pretending like Utah is some utopian vision is equally laughable, or would be if it didn't come at such a high cost.
Perhaps there's a middle ground between Utah and California.
I didn't say or act like Utah is a utopia. You invented that. Only that I don't have to pay to use bathrooms. I have my own complaints with this place too. We're gradually getting overtaken by the very things I laugh at California for. Funnily enough, a large contributor to the problem is Californians fleeing the consequences of their decisions. I can hardly afford to live in my home state, but the unaware affluent wine-sipping Californians sure can. But I definitely am much happier here than most other places in the US for the time being.
I have a child, they spontaneously have to pee upon entering any store or restaurant. I have visited far too many public restrooms in this state, I have never had to pay for one.
Perhaps bathrooms had to be charged for due to a sufficiently significant portion of the population causing damage to them.
Perhaps the California law requiring free bathrooms was a way for California leaders to shirk responsibility for providing clean bathrooms to all and foist costs onto private businesses. I always assume this is the case when government requires businesses to do provide something at a price the government sets. The politicians get all the acclaim and none of the headaches of fixing (or not really fixing) the problem, win win for them.
If Utah does not have the population that causes damage to bathrooms, then its politicians would not yet have needed to come up with a law requiring free bathrooms.
They don't have as much of the demographic that causes damage to property because of the religious and cultural backbone here that (decreasingly so) binds this state. For all the complaints people throw at the Mormons, standard of living, average level of education, and crime rate, are all fantastic compared to most other places.
As the culture becomes one to not punish those for bad actions, not shaming bad lifestyle choices, and begins to artificially force an unnatural level of multiculturalism, society rips apart.
I'm not even a conservative either. But this "social progressivism at all costs" disorder that our country has developed is going to have dire, and inevitable consequences.
Dunno about SF, but the mitigating factor in. LA is that the bathroom is locked, you ask for a key, the key is only for customers. Not every place has a public bathroom but they didn't before either.
Don't know if that's illegal but I doubt anyone cares about mom and pop shops. All the large chains still have open restrooms.
It's like that all over Florida and Georgia. Most gas stations where the bathrooms are not accessed from inside the convenience store have locked bathrooms. That isn't something unique to California.
Here is a realistic scenario. Remote firm needs to hire a new employee in a Pacific time zone for a easy to find role. Employer could choose to target the job posting ad in Oregon, Washington, Nevada, etc. but not California.
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.
Many young people or those cheering for minimum wage/child labor laws/workplace safety do not seem to understand that this does more net harm than good...
If government programs where judged by their results and not their intention I would have more faith in trying things via government
But in reality government programs are only ever judged by their intentions, never their results, and if anyone attempts to apply some kind of ROI metric to them the inevitable retort is "we just did not spend enough tax payer money for it to be effective" or "evil rich people lobbied for a loop hole that is just close it then we would have utopia" but of course that utopia never comes
An employer who cuts headcount and salaries to compensate for this, rather than taking it out of the profit margin, is crippling their own ability to hire. Best to work somewhere that isn’t so short sighted.
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...
My company is largely remote at this point and is moving away from CA for cost/tax reasons. For some portion of companies this is just one more reason to move headquarters.
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.
> 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.
This is probably the best equivalent comparison I've seen in the thread. Paying commute costs vs paying home office costs.
i'm unsure if i've mentioned this ever, but i had a company give me a large bonus (to my salary) when i requested remote work, with a contractual rider stating that my salary would go up an additional $15,000 if i moved within 20 minutes of the office within 1 year. The bonus was to entice me to come to the office more often - that is, to offset my pain and suffering, wear and tear, fuel costs, etc.
Where I live, dedicated home office space is about 1/4 the cost of commercial rent, in terms of $/sqft. It would be stupid for companies to not pay for it in lieu of commercial real estate.
As a Californian who has lived here for a quarter century and has never threatened to leave, I’m glad the state doesn’t cater to startups who can’t afford an extra 5% for home office expenses for their remote workers. They have zero loyalty to the state and if all employees are remote there’s little benefit keeping the corp in CA. Everyone has to register to do business here and the FTB will get the bulk of its cut anyway.
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)
confused. If all of this is about remote workers, how are they taking up "the space" here? aren't most of them in the lower COL areas freeing up the space while the company pays the CA taxes?
My rant is directed at the entrepreneurs and companies who scoff at paying their fair share to employees and the state while demanding all the benefits of living and operating in the great state of California. Getting these politically powerful NIMBYs out of the state would do a disproportionate amount of good.
The reality is that California is so economically powerful that any corporation that leaves is almost certainly going to have to register as a foreign business and pay the franchise tax on all revenue earned in California anyway (the minimum cutoff is $500k or 25% of total revenue, whichever is lowest). The employees who stay in California are still going to pay income tax which makes up the bulk of state revenues. Everyone is still going to be paying sales tax on goods purchased from California vendors, the largest source after income tax.
Corporate taxes contribute less than 15% of California's budget so it's a reverse catch 22: either they're so small that the threats to leave are empty (DO IT!), or they're so big that they can't afford not to pay California taxes regardless of where they are. Like I said, either way the FTB will get the bulk of its cut.
And destroy the property values of all the people that worked their whole lives to own a home there. You're being myopic or selfish, neither is fair to your neighbors.
You can't afford a home for a multitude of reasons I'm sure, least of which is your neighbor insisting you shouldn't.
If you want an affordable home move somewhere affordable. You can't legislate affordable housing for yourself without introducing problems for everyone else. Someone just living in a home they bought is not actively preventing you from affording one, at least, they're the last people you should blame (even after yourself).
I think it's as simple as "if no one is living in your home in a permanentmannee you get taxed hard". Landlord shouldn't be able to sit on a vacant apartment unless they can show that literally no one applied for a room. A billionaire shouldn't be able to treat a house like a stock.
But again, I don't know what any of this has to do with small startups suffering from the main topic. Paying some 4k more per employee isn't a singular gatekeeper, it's a deal breaker for those who already are on thr fence.
Property values should not be an investment or retirement fund, it is selfish to think so. Literally, by definition, if you think the value of YOUR home and SOME of your neighbors should increase to price others out, that is selfish.
I don't disagree at all. I like the idea of homes being depreciating assets. America just doesn't subscribe to that and so paying a massive up front cost, there is some expectation no one is going to actively try to destroy your property value.
Because that is myopic or selfish. You didn't or couldn't buy a house when it was smart, now you want to screw over people who bought homes recently because prices are unaffordable. That is either selfish because you don't care about their property values (when they probably much like you had to work hard for it), or myopic because you didn't even consider it.
What exactly are you even proposing? You want the government to mandate cheaper land, construction material, and builder wages? To lower taxes on all of the above? People who think there is some simple solution "duh just build more houses!" are extremely myopic. Again it's not my problem, I'm not against building more houses and I also get NIMBY because "affordable" or government subsidized housing has a direct correlation to crime rates, lowering property values, and lowering the quality of schools.
Property prices are better off destroyed though. It doesn't take away the home from people who overpaid for it, making homes accessible is better for society outside of some myopic nonsense where someone's net value drops, the actual homeowner can just keep using their home as before.
> And destroy the property values of all the people that worked their whole lives to own a home there.
California stands alone as one of the top 5 or 6 biggest economies in the world. The 2008 GFC was a blip in our housing market even when the economy turned upside down. My city experienced less than 18 months of flat real estate prices before growing out of control again.
If an actual economic crisis caused by housing loans doesn't destroy California's housing market, forcing companies to pay their fair share certainly won't.
So if I invent an awesome new car, it's selfish because it's destroying the value of your beater? If I invent a new GPU that costs 1/10 the price of existing ones, it's selfish because your computer is now worthless on the secondary market?
Homes are to LIVE in, I consider them consumables just like cars, just on the order of ~a lifetime instead of ~10 years. I don't give a flying f about neighbors' house or car values, I just care that I have a comfortable roof to live under and that I can afford it.
I know boomers treat houses as investment assets. I don't. They're shitty return and high-maintainence as an investment. But I'd like to have my own so I can modify the hell out of it to my liking.
So basically you want to own a home with all the benefits that come with it but you don't think you should pay the market rate like everyone else because you deserve not to. And boomers are to blame for it. Gotcha.
My commute costs going into the office everyday for a year are far more than $1000/year. I estimate it’s about $4k/year and that’s with taking public transit & biking. Those commute costs aren’t covered by my employer. I’d gladly trade a $4K decrease in commute costs for a $1k increase in internet and electricity. Also internet is fixed so regardless if I’m remote or in office I’m still paying the same bill.
Office costs are easily 10x that. Meanwhile, should employers also reimburse employees for commuting costs? Why not? Those costs probably exceed the wfh costs to the employees.
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?
I've said over and over again that I would easily take a 50% salary cut to stay remote if it were the only option. I don't want to "get one over" on anyone, work multiple jobs, or slack off. I just want a square deal that does not dictate my physical location in life.
I don’t understand why people shouldn’t be allowed to enter into any sort of employment contract that they wish. As long as both parties are well informed then they should be free to agree on what expenses will be covered and what won’t
On principle, yes. The superbowl halftime show is a good example. As an observer, sometimes its hard to tell if the artist in the halftime show is being paid by the NFL to entertain the fans or if they are paying the NFL (effectively accepting a negative wage) for the chance to promote their personal brand. If they can accept a negative wage when they want why can't I be free to negotiate the same for myself?
Yes, it is immoral. You are taking away someone’s freedom to willingly enter into a contract. Plenty of successful societies do not have a minimum wage.
Do those same societies have strong social safety nets or otherwise public, low cost means of education and healthcare. Because if so, that's a really huge difference.
"Libertarian doesn't understand how democracy works"
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.
And how much does a business save by having to buy/rent, insure, secure, power, internet, water, clean, and climate control a large building for all of it's employees vs reimbursing them for working from home?
I would guess even lower than those estimates. Companies only pay a fraction of the gas mileage used on a car for work purposes: I expect they wouldn’t be on the hook for even the full percentage of electricity and data for work devices used from home. This could be a nice offset but I would be surprised if companies start picking up the tab for a full 8 hours of electricity for a home, let alone 8 hours of usage of a single computer. Additionally if it requires tracking and reimbursement the way miles do it will be a burden not all employees will bear.
Yes, although it is pretty good. My gas currently costs only 14 cents per mile so the other 51.5 cents needs to cover the cost for insurance and maintenance and the purchase price which can mean that you could come out ahead or behind depending on the situation. The company isn’t required to pay the full cost of operating the vehicle if they are more than the 65.5 cents so from that I am extrapolating that companies aren’t going to be paying the full price per employee just some averaged price. It will be a help to those who are currently paying out of pocket costs and will hopefully not be an undue burden on employers or employees.
According to the article, electricity costs are not yet decided, so it's probably closer to $2,100/year. Also that's only for workers who are required to be remote, not those that choose to be, so likely doesn't apply to all employees (edit: sorry, required or encouraged to be remote)
Yeah to give some context the average cost that employers pay for health insurance in the USA is $1,251 per month. For the big tech companies it's often higher due to better coverage/location.
So this is nothing. Employers will not flinch at this.
I do think salaries will be adjusted a little bit in new listings but 115k vs 116k is not a huge difference and I doubt most medium or large employers will make a stink over reducing people’s pay over this
I've worked remotely for about 10 years now. I actually don'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.
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.
You can't, that would be a huge legal liability for the company.
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.
If the state requires it to be covered for all employees and it's subject to audit, whether or not I pay for anything additional, I'd still have to follow the policies and provide supporting documentation so my employer would be able to comply with the legal requirement. That's the hassle.
So you don't want more coverage because you don't feel like doing paperwork?
I fail to see the issue. These laws have good faith in them and of you refuse to give paperwork after multiple prompting you more or less waive that coverage. They have to follow the law but they can't force you to hand over your energy bill. Alternatively, they will estimate based on data they already have and throw it into soke benefits account (if one exists).
I also imagine there is a maximum coverage rate to prevent abuse, since existing laws require to pay only a portion based on how much office space you dedicate in your house.
> So you don't want more coverage because you don't feel like doing paperwork?
We're talking about around $85/mo, and in every company I've been at that offered this (voluntarily) I declined, because spending 2-3 hours filling out paperwork for $85 is not a good deal. It's an annoyance. If it's legally mandated, now it's a mandated annoyance.
The article talks explicitly about "a reasonable percentage of" bills. So I think it can totally cover the case where you want a top-notch Internet connection for big bucks and they reimburse you up to N dollars per month.
To be clear, it's common for IRS mileage reimbursement rates to apply for driving for other than commutes (e.g. to drive to the airport or a customer site)--but not for a daily commute.
I can't edit my original comment anymore, but I was wrong. It's not government mandated, just regulated in the sense that there's an income tax break for any travel compensation up to 21ct per km. Most unionized (CAO) employers follow this exactly, and even non-union employers like my own follow this as far as I know.
Fun thing is that it's the same amount regardless of the mode of travel, so if you take your bike to work it's an extra $4/hr tax free income ;)
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.
The case of California / CA is especially bad, since this is the ISO-code for Canada, so the article title is unnecessarily ambiguous.
I was curious about the historical precedent here. The earliest usage of "CA" referring to Canada I could find was a 1913 British abbreviation guide, and it doesn't seem to have been in common use until ISO 3166 was published in the 70s. "CA" referring to California was standardized by the USPS in 1907 to avoid confusion with Colorado, and the term seems to have been in wide use well before that point because it's documented in the 1880's Webster dictionary as referring to California.
It doesn't help that the official subdivision code for California according to 3166 is "CA".
I used to work for UPS at their Ontario California air hub as a sorter. We would constantly get packages for Ontario Canada. UPS must have spent hundreds of thousands of dollars a year shipping packages to Ontario Canada via California.
California has more people, a larger economy, and more mindshare. It's probably safe to assume "CA" outside something obviously Canadian is California. Even Ontario CA is 50/50.
In the past few years, Canada's population passed that of California. Canada's population is growing very fast, while California's has grown modestly for a decade, and slightly shrank over the past few years.
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.
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.
The consequence is that the company will want to improve efficiency by paying for all the utilities for all employees in a single building. E.g. less WFH.
Because i want a job and not an incentive to not hire me because i don't work locally to their office.
I get frustrated at arguments like this that effectively result in "hey, you need to move to a big city because it's 'better' for you". I don't live in a big city right now, i work remote, and i'm thankful that employers aren't punished and incentivized _not_ to hire me.
I get what you're saying, but we need to look at the ramifications of purity arguments like this. Killing WFH "for my own good" doesn't feel as good as you may think it is.
Work expenses paid for by an employee are typically tax deductible. This wouldn't be anything new. The expenses paid for by an employer are also tax deductible. This would also not be anything new. The idea isn't that the "cost" is borne by the taxpayer, it is that the employee/employer shouldn't pay a tax on the money they used to produce the income.
The upthread proposal was "I think it should be done as a tax credit for the employee or the company instead."
That's a proposal to have the cost be borne directly by the taxpayers (a tax credit), not a mere reduction of profit via a valid business expense (a tax deduction).
> The expenses paid for by an employer are also tax deductible
This is no longer true, at least with regards to employee salaries, but maybe other expenses related to their employment are still deductible. Since the headline calls this a "reimbursement" I would imagine it would be
Encourage WFH and then the company doesn't need to pay for an office building at all! It's almost like businesses have to pay for infrastructure for the employees to be able to do their jobs, whether it's in an office park downtown or the home office in the suburbs.
That'd be totally logical if there wasn't a large amount of investment money tied up in commercial real estate - we've seen a deluge of articles about how detrimental WFH is and many of these are coming from investment firms tied to commercial real estate. We're currently losing the battle of advocating for WFH even though logic is on our side - we don't need to give investors more ammunition for the propaganda mill.
The purpose of it being a tax deduction is because it is a productivity cost. By spending that money, you are producing (hopefully!) something useful for others.
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.
Lots of cities disagree with you- they want people to return to office because they're worried their down towns are going to collapse due to lack of office workers.
They'll still fail because they won't be able to twist employees enough to reach the minimum footfall floor required for the economic activity needed to sustain before times downtowns, but it will be annoying while they try.
Mayor of NYC complains about remote work, but then expands it to non union NYC employees because they can't retain talent [1]. Mayor of Minneapolis complains Target and the local county won't fully RTO, but leadership at those orgs goes "meh" and continues because they want to retain talent [2] [3].
This does not work differently in other states as far as I’m aware, California just might be more willing to enforce the laws already in place. Additionally, this not a tax credit which is money owed to you by the tax authority, rather a deduction which is a very standard vehicle in calculating net income (revenue minus costs). Who takes deduction doesn’t matter as far as the IRS is concerned, for example, as long as it’s not claimed twice. As an employee, I would rather be reimbursed for company expenses than have to manage those deductions throughout the year because part of the benefit of being W-2 is that you don’t have to worry about anything except collecting that paycheck. If I we’re on a contract, I would be managing my own expenses.
> Who takes deduction doesn’t matter as far as the IRS is concerned
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).
I kind of like the idea of a simple tax system, but on the other hand it's one of the best levers that the government has for influencing behavior. As long as the tax incentives correctly line up with the behaviors we want to promote or discourage, I think it can be a really good thing.
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.
That's literally NOT the purpose of the tax system. We tax people to pay for government expenses. Encouraging/discouraging behavior through taxes is very popular in the US, but not nearly as much in most other countries.
It depends on the level of government and their sovereignty. If the government controls it's own currency, the purpose of taxes is not to pay for expenses, but to provision the government, create a demand for that currency, and create markets. Sovereign governments are in a perpetual state of deficit on purpose.
Governments in the Eurozone are not Sovereign because they don't have control over the currency and must use taxes to pay government expenses.
US states and cities also must use taxes to pay for government expenses.
So the real answer is complex, it depends on whether you are a sovereign government or not.
True, but America's history means that it has a relatively weak and slow federal government. Tax initiatives are some of the fastest things one can pass on the federal level.
Depends on the level of government. For cities and states, taxes generate revenue, but for the federal government, taxes serve a different purpose because the US federal government is sovereign and controls it's currency.
This following is an excellent short video from the late David Graeber explaining why money is debt and what taxes do. While it's context is the UK, it applies to US or any sovereign government.
For California it's absolutely about revenue. But a dual purpose is to provide incentives/disincentives for certain behaviors. Even states that require taxes for revenue give tax breaks for incentivizing certain things to companies and other groups.
At the federal level taxes serve to mainly provide a demand for the currency, control the levels of money in the broader economy, and incentivize/disincentivize behavior. Unlike cities and states, the federal government must necessarily be in a perpetual state of deficit for the private sector to have a surplus.
To further back up Gaeber's claims, here is a reference from the Bank of England explaining how money is created.
Right, this will also disincentivize companies going folly remote, since this is eating into their savings for not having an office. Companies only have to pay this expense if there is no option other than remote.
My company implemented a temporary reimbursement for internet / phone access when we were all involuntarily WFH a few years ago. Few people bothered, even though it was technically free money.
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.
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.
This is exactly what I think of when considering actual remote work expenses for myself. I live in 600sqft which is not bad for a place to live. But not great for one, let alone two people to work. In terms of quality of life, I think having to work a) within 10 feet of my bed , b) on the kitchen table, having to clean the table of work before every meal, or c) on the couch which is not at all ergonomic; are all huge steps down from the office.
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.
If you have the extra room already then you're probably already using it as a den anyways. But if you don't then you're not likely to move and incur the extra expense of having an extra room -- work from office is definitely for you then.
I've got two monitors and a laptop on 1/3 of my computer desk. I'm huddled on a corner literally the point is right where I work. My mouse is 10cm from the desk edge. It sure feels like I need extra room.
Unless you're going to pay for an extra room--which seems very unlikely (or should be) to be reimbursable as opposed to working on the kitchen table--the actual incremental costs seem pretty trivial. Even if you reimburse some pro-rated amount of internet and/or mobile, that's maybe $100/month in the US.
ADDED: If you don't have an option to go into an office, a stipend for a co-working space may be reasonable.
100% My wife and I both work from home. We are DINK but that still means we need to compete with families for homes with enough space for two offices. I'm not complaining, it's just absolutely a major expense.
Yup. As someone who has WFH for ~10 years now, it's imo essential. Covid obviously didn't affect my working habits much given i was already WFH, but i knew some who were forced home. They lived in tiny apartments and did that.. kitchen table, couch, etc. It was very rough for them, though they had multiple people in the apartment.
My wife and i both WFH, with dedicated offices. I can't imagine not having them, and we've discussed this being a required feature of future home purchases.
It's privileged for sure, as it increases home size which is an astronomical expensive these days. But not having to buy a home in close proximity to SF or Seattle makes this much more approachable. [good] Internet is the most difficult thing as you go rural, in our experience. However in WA for example some counties/towns have objectives to lay fiber, which is amazing to live more affordably with remote work.
Or want actually maintain a desk you don’t spend time setting up and putting away each workday. Imagine setting up 2 monitors on the kitchen table each day.
You're missing the parent's point. Your setup works for you but what if you and your partner both need to work? Do you both work at your desks in your bedroom? How does that impact your partner's sleep? What if you need to work late but they need to get up early? What happens when they have a meeting when you have a meeting? What if their work involves being on the phone all day?
I think you're looking at this from a solo dev's perspective, where all you do is get up, bang on some keys for 8 hours without anyone else bothering you, and then you're done. Of course that works in a corner of your bedroom where you live alone, but that's not everyone's job and living situation.
But the context of this is whether you should be reimbursed for the cost associated with an extra room if you choose to work remotely for a company that has offices, even if those offices are in higher CoL areas. (There's certainly an argument for providing a stipend for a co-working space for a fully remote company.)
No one is arguing that a dedicated office isn't desirable. It's a question if someone else should pay for it if you want one.
I think it's not a matter of want, given the kinds of situations I laid out. In my situation, I have ADHD and I'm autistic. If you want me to work I need to be alone to work. It's not a want or a desire. I cannot work in a room full of people and noises, so putting me in one is just the same as expecting me to code without a keyboard.
My employer gives me a computer, why is it such a stretch that they also give me a room? They want the work done at the highest quality, don't they? It's making them a lot of money, isn't it? So what's the problem?
Of course, there’s no other way to do it in America, that’s the political reality. You can see it in this thread, people wouldn’t want their taxes to pay for accommodations. Just look at our healthcare system, it’s the same thing.
Still not a matter of “want”, and the ADA had plenty of holes in it. For one getting a diagnosis for these disabilities is very difficult, and took me over a year just to find a provider covered under our healthcare system.
A home office costs you hundreds extra per month, at least in my market (London). I work in the corner of our bedroom right now. My girlfriend works in a corner of the living room.
Maybe not unheard of, but currently not allowed for most employees. IIRC, the current test is:
1. Exclusive use
2. Primary place of business (NOT primary workplace - WFH employees usually don't qualify)
That's long been a pretty questionable deduction unless it really is a dedicated space for work purposes. (Also, relatively few people in the US itemize today after the 2018 tax changes.)
It's not just opportunity cost. I have known people buying condo with extra room to use as home office (they picked the one with extra room). It is a very real and significant cost, not merely opportunity cost
> Good luck with your debilitating back issues in 10 years.
i said this up thread, make sure you get a good, solid, office chair. Work at the kitchen table but sit in something that's specifically designed to have a human in it for 8 hrs a day without killing the human.
If you need to do this, especially if you are tall, invest in a good monitor/laptop stand. Does wonders and a good one is only 60-80. If you need to penny pinch you can get a foldable one for 20-30, but the stability is worth the extra cost for me.
i am paying for an extra room, because i have to live in a place that has that extra room, which costs more money. if i didn't need the room, i could save a lot of money by getting a smaller apartment.
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.
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.
It's so slow it's basically unusable for her. I don't know the full details of how her job works as far as uploads/downloads go but it seems that even with something 15x faster than that DSL connection she's often waiting a minute or two, and I know there have been times where she's been uploading something for 30+ minutes. Having those instances 10-15x slower would make it so she literally can't do her job.
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.
Except when the thunderstorm is very heavy and then it doesn't work, according to your post.
So which is it?
'Basically Unusable' is not un-tenable or non-working. The only fulcrum your wife has is if the people she reports finds her slow timing unacceptable due to the connection; use the provided work tools and make everyone feel the pain.
You're subsidizing their connection cost for free.
I think there's been one thunderstorm like that in the day since she's started remote work two or three years ago, and the connection dropped for 10 minutes. We usually get storms like that in the evening, and that happens maybe 5 times a year.
I guarantee the DSL has dropped way more than that. Before Starlink and the hotspot we had that's the service we used, and it was atrocious.
It's just an old policy in a very large company that's slow to update their policies.
I mean your wife could probably explain her employer that the company is paying for a connection that doesn't provide enough bandwidth to do the job and that the money would be better spent on the Starlink connection.
Of course they might just conclude that your remote location isn't compatible with the demands of the job though.
Oh no, she tried. We would have much rather kept the Starlink + hotspot combination, but since they would pay for neither (and required the 'land line') we dropped the hotspot.
So the article says these costs are reimbursable if 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.
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.
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:
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.
It becomes equivalent if the company buys the newspaper subscription for the company and you have access to it.
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).
Add frequent flier miles, "kickbacks" of a couple percent on credit card expenses that are reimbursed, clothing (such as suits) and commuting expenses that are not reimbursed, but uniforms (and related) that are deductible, etc. As you say it's a mishmash that doesn't have a real basis in some overarching principles.
In the US un-reimbursed business expenses are no longer federally tax deductible unless you fit in some very specific niches. That changed under TCJA in 2017 (effective 2018 tax year) IIRC. [1]
Entirely possible. Presumably most people who wear uniforms don't itemize deductions today in any case. The broader point was that people get various random perks that don't get taxed and have various expenses that don't get reimbursed/deducted.
Credit card points aren't taxable because they fall under the IRS rebate rule. They're treated like a coupon. Earning and spending frequent flyer miles is approximately equivalent, from the perspective of the IRS, to a 20% off bread coupon at your grocery store.
It doesn't change your point of course, I just find it interesting.
I expect it's one of those utterly unenforceable small-scale things that the IRS, at some point, decided to twist some logical reasoning around why it wasn't even going to try to enforce.
It never made sense, given that the entity issuing the rebate isn't the same one you're paying. Like if your employer (or really, anyone else) cut you a $1M check because you bought a $1M house from a random person, is that really not taxable income because it was a "rebate"?
The real ruling is that as long as you're not doing obvious scams and scandals with tax avoidance, the IRS doesn't really care.
So if you're getting "the equivalent" of $1k a year untaxed, the IRS yawns.
If you figure out how to run your entire salary through airline points, the IRS wakes up.
(The laws are complicated to decipher, but they basically come down to the above. The tax courts will look at things like "is this available to everyone, how much was it, etc, etc".)
And deductible for the individual is different from the company can buy this and claim it as an expense without having to also account it as salary to the employee.
The pay you get is an expense to the company, and if the company buys and maintains uniforms, likely that is also, but it is not counted as part of your salary even if you get to take the uniforms home.
And self-employment makes it all even more complicated.
My employer will reimburse us for books and pays for conference attendance. The people who seem to benefit from this are the people who would have sought out the information on their own. Most employees won't do anything more than is required of them or demanded by their manager, and conferences are basically seen as an excuse to not work for a couple days by most of my coworkers.
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.
Which is a pretty healthy attitude to have if you're a well-paid professional.
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.
Someone I'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.
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
My ex-employer actually covered that, had verbiage along the lines of "a safe and comfortable" working environment at home. To their credit, though, if you were concerned about something, you could ask.
(But then, how far does that go? A non-slip mat? Shelving? Rewiring your home for old electrical?)
I'm a professional, I buy my own tools whenever possible. Gigabit ethernet, big monitor, nice keyboard, desk, chair, rocket fast machine. I've been remote for 13y. It would be nice to get reimbursed, sure, but also I don't want to deal with the administrivia.
Sure. I'm similar, too, been fully remote since 2007. Within reason. When a healthcare startup wanted to me to work on PHI on my BYOD? No. Not a chance.
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 employee for the employer to take (say) $500 a month from salary and designate it as "remote worker expense reimbursement)".
You lose less than $500 after-tax and gain $500 cash (untaxed).
Yea it seems like a pro-company benefit because all these companies can start treating all this as pre-tax benefits like the good old free untaxed lunch days. So it seems like they are trying to target remote work companies because the shift to remote work means companies were effectively paying employees post tax for home work environments.
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.
> 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.
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?
During the pandemic, Canada had something similar, but subsidized by the government.
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.
“Headquarters” is irrelevant for state employment laws. If an employee is working within the geographic boundaries of state A, then that employee’s employer is an employer in state A and has to follow all the laws of state A. Same for state taxes.
The "correct compensation" 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.
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.
The percentage of utility bills one is entitled to reimbursement for is ripe for fraud and abuse.
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.
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.
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.
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.
Only in a world where businesses are not motivated by profit. It would be far cheaper for businesses to stop leasing an office, or to lease a smaller office, than to force a return to work. Everything they'd have to pay for in a work from home scenario is also an expense in an office environment, plus the lease of the office space itself.
> If you work from home in California, your employer might be required to contribute to your internet bill, electricity bill, and other expenses necessary to do your job.
If a company already has an office near you they may just say you need to come into the office, they will not pay for your internet and electric bill.
If you drive into the office they don't have to pay for your car, insurance, registration, gas, etc.
I think CA had good intentions here, but I think it's going to give employers one less reason to hire remote employees in CA.
> If a company already has an office near you they may just say you need to come into the office, they will not pay for your internet and electric bill.
I've seen multiple employment ads in Seattle, "If you live within 50 miles of our office, this is an office position".
One had the balls to say "within 100 miles". In Seattle? Fuck that, 100 miles each way could easily be 2-3 hours each way.
This was my first thought, but the article mentions the they interpret that situation to not be a necessary expense since your voluntarily working remote. Maybe not as bad as my first reaction.
The expenses listed seemed pretty typical for benefits. My last job already let me expense my cell phoen, internet, gave me a stipend for office equipment
Seems like it could be sorted pretty quickly if employers had to reimburse mileage and "reasonable commute times" for hourly calculations. Just the mileage for a 10 mile one-way commute would be $260/mo
"However, if your organization has returned to in-person work, but you choose to work from home, it's less likely that your business expenses will be seen as "necessary"—as you could have avoided them by working from the office or other worksite."
California regulations aside, my understanding is that's sort of the tax code today. My accountant always told me that home office expenses were a questionable deduction if you had an office to go into if you wanted to.
If it works out as say £150/seat/month to be in the office vs say £600/year for a reliable broadband connection, contributions toward power/heat, and providing a chair/desk/monitor setup, many won't consider the 2/3 cost saving worthwhile.
Asking for employers to pay more for remote workers than they do for in-office employees will either result in fewer remote jobs or remote jobs paying lower salary (which will lead to lower demand for remote jobs).
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
Cute, i wonder if they're reimbursing these days, because they didn't reimburse anything when i was 3/5ths remote 11 years ago.
My personal red line is when the employer insists a camera has to always be on in the working area. That's when I tell 'em, as nicely as possible, with an "aw shucks I'm terribly sorry", that they're gonna have to pay rent.
Florida company got sued for doing it, not because they were doing it, but because they were doing it to someone who was in the Netherlands. NE law overrides right-to-work, even for a US employee, because it's in NE territory.
<Redacted_Name_of_Defense_Prime> subsidiary had a department that did it - "do not turn off computer, do not block camera, if camera inoperative get one from IT" - but it was only for full time WFH staff. Supposedly the machine wouldn't boot up all the way without the camera coming on.
US employees in right to work states probably don't have a legal argument against this. And as always, if you do bring legal action, you're blacklisting yourself pretty badly. Whistleblowing, ethics complains, lawsuits are first filter passes for HR; hell, even for current employees, central "Ethics Hotlines" fire back caller IDs right back to local HR. So the troublemakers can get on the pink slip short list; doesn't hurt that the typical "troublemaker" is mid-late career, so it saves more money too.
Sure, that's a shambling pile of DFARS violations, but that doesn't keep it from happening.
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't deem deductible for full time employees working from home?
You can already deduct many of these and should be. Talk to an accountant but deduction is usually ratio of usage for work vs personal. Also, keep your personal and work expenses very separate in case there is ever an audit.
If I were an employer hiring for a remote CA position I would just do accounting -- we were going to hire you for $150k, but now it will be $146.3k with an expected $3.7k of expense reimbursements.
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?
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.
Real estate is the primary thing that makes cost of living so high, and that's primarily a city problem. California state actually passed laws that require increasing housing supply: https://www.kqed.org/news/11965492/san-francisco-takes-forev... - which cities are dragging their feet on
I work 100% remote, have for over a decade, if my employer/contractor won't cover my expenses it tells me exactly what type of employer/company it is. If you can't recognize the value in me working fm home you won't see the value in me as an employee. Hard pass.
I would prefer that my employer consider some of my expenses for working from home to be expenses rather than things that I pay out of my salary.
Suppose I have $500/mo in "real" expenses. I'm better off if my company reduces my otherwise-salary by $500/mo and gives me an expense reimbursement for even $400/mo. That $400/mo is non-taxable to me and tax-deductible to the company. So, the company saves $100/mo (the difference between $400/mo and $500/mo), and I have an extra ~$100/mo ($400 - $500/mo * (1 - marginal_tax_rate)), assuming a marginal tax rate (combined fed/state/local) of 40%.
Yeah, but the rest of us don't want that because we have to pick up the slack in taxes. Personally, I would prefer if I just didn't pay any income taxes. That way, I would save a few hundred thousand and my employer could pay me a hundred thousand less and I'd come out ahead.
You should be opposed to this California law then, because it is codifying that these are required business expenses and eligible for exactly this treatment.
There's no new law. This is just someone's interpretation of existing tax law. You'll be hard-pressed to gain anything worthwhile from this. Doubt it will even exceed the standard deduction so no one takes it. If you do the whole "this area is my work space" deduction, you increase your chance of being audited. And then all the gains are wasted in handling that thing which is a bloody hassle.
So in the end it’s all part of salary. Not tax-exempting just shows how inept the company’s finance team is more than whether or not they value your time.
Some do some don't. I worked at a place that paid for public transportation or an equivalent amount for gas cards. Lots of employers even provide parking for your car for free. Others require you to pay for your own parking.
"Researchers studied knowledge workers in 2013 and again during the 2020 pandemic lockdown and found significant changes in how they are working. They learned that lockdown helps people focus on the tasks that really matter. They spent 12% less time drawn into large meetings and 9% more time interacting with customers and external partners."
