California employers must reimburse remote workers for all necessary expenses
nolo.com
nolo.com
We just have to do it...
We just have to do it...
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
The top comment is warning people that these type of laws that attempt to mandate certain behavior often backfire
Watching California gradually kill itself through administrative bloat, Orwellian laws, and degeneracy has been quite entertaining.
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.
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.
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.
To quote you... You invented that.
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.
I'm sure that's a major factor and not the fact that Utah has 1/10th of the population of California.
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.
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.
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.
It's trivial to add demands like this. Employers have more pull in the legislatures than employees, so be careful what you wish for.
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?"
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.
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).
Companies want it both ways.
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).
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).
I also value my time, so I am not inclined to push for such a law in my state.
Really? Just ask for a raise.
All work in a roughly capitalist system does, except by temporary accident, that's sort of a defining feature.
Yes 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.
/s
There's an adjustment needed. I have worked for and applied to healthcare startups that want you to BYO device. For working on PHI. In Production.
We're not "all in this together". We all know that equity is worth nothing until proven otherwise.
Stop cheaping out and expecting your employees to invest in your success without compensation.
If that means fewer/smaller startups, small businesses? Ultimately, so be it.
This is really what it comes down to. If your business can't afford to employ people then people don't need to work for less, your business needs to cease operations.
This bizarre entitlement entrepreneurs seem to experience baffles me. I don't care if the cost of labor makes your business inoperable. Tough shit. The last year or so I've had to make a lot of adjustments to my life to account for everything getting more expensive, it happens. If your business is on such a razor's edge that you can't deal with new expenses then it sounds like your business is poorly operated.
I don't even understand how this isn't the norm. When I was hired on to my current job, they were prepared to send me home from my onboarding with everything I could need, including monitors and an expensable amount to equip an office. I didn't need really any of it because I was already setup for remote, but like, why wouldn't you be ready to do this? Asking workers to use their personal devices to do their jobs is some top tier horseshit, not only from ethics but from security perspectives too.
But when it comes to their business, all of a sudden they're entitled to a lot of things.
I'm all for small business, and vehemently support many.
But there's no constitutionally guaranteed right to a successful business.
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.
Fuck off. Just fuck all the way off.
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.
keep driving people out of business then get ready for lots more "adjustments" to your life and standard of living.
how?
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. :/
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.
...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.)
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.
When I did a gig for Statnett in Norway (the state owned company that owns and manages the high voltage power system) a couple of years ago; they provided a Windows laptop for me even though I was a contractor not an employee. There is no way that they would allow a device out of their control to connect to their network and services! The risks are far too high.
I could use my own more powerful laptop but only as a Citrix client.
Think this through. What happens? What happens, when it's harder and harder to build and scale small businesses? You only have big players owning everything. I am struggling with that every week here in the EU and I'm very glad I don't produce anything, as it would be even harder. So this is a fine line, where we should be cautious of both extremes. There's a word for big enterprises calling for regulation to prevent competition and hinder small companies.
California has the luxury of being able to do whatever it wants and companies not really having much of a choice to say - we'll just skip the California market.
It's a bigger market than Germany & Japan.
This would go over less well if a state like Mississippi tried it.
Sames goes I expect for "businesses hiring remote workers," only a Californian would have the arrogance to believe that all those businesses are somehow addicted to hiring in California.
So what this kind of stuff does is crush small businesses in California, and leave only the large ones standing. By the way small businesses drive most of the growth in the US and owning one used to be a way to have control over your own destiny while making a good living, but hey I guess all that stuff's out of fashion in this brave new world where only five companies matter and they have a revolving door set up between their boards and the government.
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.
Is this a good policy? Who knows.
Is it going to be popular? I think so.
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.
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.
Yes, the middle class is being hollowed out - but is it really significantly more so than anywhere else in the US?
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.
The simple solution for fully remote companies is to just exclude CA residents.
>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.
Plus all the previously slightly-better-than-marginal startups will now descend to being merely marginal.
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.
1. https://www.betterbuyenergy.com/ - Zip 43215
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.
Much of your energy bill is distribution costs, which is a combinational of infrastructure costs and transmission losses.
Transmission losses will be small anywhere in the UK (because it's tiny), but infrastructure costs will vary a lot based on population density.
It's cheaper to erect a few large transmission lines to London than it is to distribute power around the less dense North.
I figured I should aim high since the number was so low.
https://www.pge.com/tariffs/Res_Inclu_TOU_Current.xlsx
average billing is currently 38.2c/kwh
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.
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.
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.
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.
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).
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.
$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.
Government is like XML, if it's not working just use more!
Conversation changed as soon as they realized I was under AZ law for contracting/consulting services.
I was charging $10k per week, and one contract was a total of 6 months. The total value of that contract was $240k (before my expenses and taxes). That pool of contracting work appears to be closed to CA contractors.
1. Who pay's the employer side income taxes. Contractors pay both sides. 2. Not eligible for benefits, you have to go to overpriced open market. 3. The contractor can deduct reasonable expenses they incur. 4. A contract will not necessarily be renewed whereas for an employee, the assumption is the job will be there in perpetuity.
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?
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.
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.
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.
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.
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.
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.
Provision a home office? All of those expenses should be tax deductible.
BYOD? You should be able to expense a portion of the costs.
Pay for internet and power? You should be able to deduct a percentage of costs.
Have a work related meal? Tax deductible.
Drive your car to work? You should be able to deduct your mileage or depreciate your vehicle.
Pay for public transit passes to get to work? Tax deductible.
Etc, etc
No evidence.
I reject your claims. Prove that people billing their employers for certain home workspace costs “will amount to millions of dollars” over and above my regular employment burden.
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.
So your proposal is "just pay your employer hundreds of dollars out if your own pocket".
If your company can’t pay for the resources needed to do business, they can’t afford to be in business.
If they have enough slack to reduce headcount they're going to do it anyway. Companies strive to hire enough people to get the job done and no more. They may not always get it right, but minor changes to expenses aren't going to affect headcount unless the company was already overstaffed and looking for an excuse to cut employees.
This is the same mistaken thinking you see from people who oppose minimum wage increases. The McDonalds down the street isn't going to cut staff because the wages went up, they need those staff to serve customers. In face the opposite can occur. The increase in money at the bottom is a huge stimulus to demand which increases traffic and requires even more staff.
This is so incorrect that it's hard to take seriously.
When revenues go down (for any reason), companies cut costs. Most employees are a cost. Why have 2 people when 1 will just have to work harder? A company rather cut and see what happens, when push comes to shove. Many company initiatives are also re-evaluated with a bottom-line mentality when revenues are down. That project that's 4 weeks overdue for a milestone? Time to cut it and everyone involved. When revenue is up, the opposite effect. "slack" is relative to market conditions. Job security along with it.
Small companies are often lean, but it's never surprising how much leaner they will run when money gets tight. Big companies can always pare down assets and associated headcount. These are just the things I see every time revenue is down, but far from an exhaustive list.
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.
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.
If there's a shortage of wheat, everyone expects the price of bread to go up. Everyone shrugs their shoulders and accepts it.
Shortage of oil? Gas prices go up. It sucks, but that's life.
Shortage of labor? NO, WE CAN'T INCREASE WAGES. UNACCEPTABLE. NOBODY WANTS TO WORK ANYMORE!
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.
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.
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.
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.
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.
also this is not just CA. your employer is literally stealing money from you when you are using your own resources to get the job done.
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.
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.
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?
"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.
Ah yes, they pay 300k salary to devs in CA but paying for the monitor and chair is a dealbreaker.
with this attitude, we'd neber have any rights at all
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.
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.
Things will estabilize at some point and it's better for 99% of people if there are pro-workers laws in place by then.
I hate it when paying a portion of my employee’s internet bills totals in the millions for my small business
Also, this isn't what's killing small business.
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.
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.
Say you work 100% remote, 8 hours a day. That's 2080 work hours a year, out of 8760 hours.
That means you need to be connected to internet, have electricity, etc. 23.74% of the time - let's round that up to 24%
Say a worker pays $600 / year for internet, $2400 for electricity / year, and - dunno - $1500 for your cellphone / year.
So that's $4500 / year, and your employer must cover approximately $1080 of that. If the company has 1000 employees, that's a million in extra costs.
Doesn't really sound like it is going to break the bank, especially not if your employer is also able to cut previous office-related costs.
Also, employers would probably start to offer a bit lower salaries to the workers that don't live in very high cost of living areas...if you pay 1000 employers on average $100k / year, that's a minimum $100m in annual salary expenses. If employees are willing to take a $99k salary for guaranteed 100% remote work, with the above expenses covered, then those costs are offset for the employer...
That being said, I live in a pretty population dense area and my largest cost by far is dedicated home office space. It would be nice for my company to pay for that but it would have also been nice for them to pay for gas for my commute when I had one.
I think CA is likely overplaying their hand. They are not the place of choice for many remote employees (because of taxes) and are trying hard to not be the place of choice for remote companies.
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)
I'm simply saying those who were stuck buying at inflated prices might be opposed to that.
My home is paid off and I got it for half of it's market value. I have no skin in the game either way as I'd never sell.
They never said that.
> I'm simply saying those who were stuck buying at inflated prices might be opposed to that.
No, you were calling someone "myopic or selfish" because they suggested ways more people might be able to afford housing.
> My home is paid off and I got it for half of it's market value. I have no skin in the game either way as I'd never sell.
You're being myopic or selfish, neither is fair to your neighbors (who can't afford housing due to market dynamics and bad policies).
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.
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.
Housing should not be an investment, period.
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.
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).
That's the exact issue. They aren't.
But none of this has to do with small startups
While they're all good ideas, I don't think they'll totally solve the issues of affordability here.
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.
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.
This is probably the best equivalent comparison I've seen in the thread. Paying commute costs vs paying home office costs.
I still did 3/5 days remote.
So this is nothing. Employers will not flinch at this.
How so? Are you arguing that the IRS 65.5 cents per mile doesn't appropriately compensate for costs?
Does CA require the reimbursement of commuting costs? If not, is it not fair to view this new requirement as a backdoor way to increase return-to-office pressure?
It doesn't matter if both parties are informed, the balance of power is what matters. It doesn't matter how well informed you are if your other option is starvation.
Everyone, and I mean everyone I've ever met that makes this argument is coming from a position of power themselves. They some rare ability in a labor constrained market and want to generalized their situation to everyone without realizing the massive abuses that already occurred that mandated these rules in the first place.
The solution is a social safety net, not minimum wage and not both.
"You did the math wrong. You cheated me. I'm getting a lawyer!"
For the ~$1k/yr or so in expenses that I'd get back, I'd rather eat it. This is less than you spend on gas to commute and that's not covered, so frankly I don't care. Just pay me a fair salary with reasonable benefits and stay the fuck out of my personal life/home as an employer.
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.
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.
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.
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 ;)
The case of California / CA is especially bad, since this is the ISO-code for Canada, so the article title is unnecessarily ambiguous.
It doesn't help that the official subdivision code for California according to 3166 is "CA".
Doing so creates positive incentives for companies to hire remote workers in California. Requiring the company to pay up by force of law disincentivizes companies from hiring remote workers in California.
I also think that it would be more equitable since an employee’s home office setup belongs to them and not their employer.
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).
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
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.
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.
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].
[1] https://www.nyc.gov/office-of-the-mayor/news/805-23/mayor-ad...
[2] https://kfgo.com/2023/08/26/downtown-businesses-ask-target-t...
[3] https://www.minnpost.com/twin-cities-business/2023/10/why-ar...
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.
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).
This was my thought as well. By increasing the burden, companies will just stop remote positions, something they are inclined to do already.
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.
https://www.youtube.com/watch?v=LxJW7hl8oqM
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.
https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
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.
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.
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.
ADDED: If you don't have an option to go into an office, a stipend for a co-working space may be reasonable.
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.
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?
But see, this isn't my problem. The money the company gives you might be a lower pay raise for me and others who don't care
> but that's not everyone's job and living situation.
That's 99.9% of the cases
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.
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.
That room is more than wanted...
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.
Her company requires her to have some form of wired internet. So, instead of paying for the Starlink or the hotspot they’re paying for 25/1 mbps DSL that never actually reaches those speeds. The Starlink and hotspot both are/were closer to 200/10.
We never use the DSL, apart from the very occasional heavy thunderstorm.
Sometimes what companies think you require doesn’t match up with reality.
Why would your wifes employer compensate for a tool that doesn't meet their needs?
The hotspot worked just fine in thunderstorms and was significantly faster. I even had our router set up to automatically bump over to the hotspot for the rare occasions the Starlink went down.
Of course they might just conclude that your remote location isn't compatible with the demands of the job though.
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 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.
But instead, this will just be a signal to any employers still on the fence to get out of California as soon as you’re able.
I work remote. I’m happy to work remote. And for that convenience, I’m willing to accept that there are some costs - electricity, water, heating and cooling - that I’m taking on. Why the government (and my fellow voters who choose to empower their government in this way) doesn’t allow me the agency to choose my own employment cost-benefits and trust that I can take care of myself continues to baffle.
If, on the other hand, you feel you are a more effective leader if you stay abreast of developing news, but doing so is not part of your job duties, then subscriptions to various newspapers are not "necessary" for you to do your job and would not be reimbursable.
This is a discouraging factor for employees, employers and office holders to develop ancillary skills that would improve their work because training, materials, and courses for such are not considered entirely "necessary" to do the job. The government then sits around wondering why per employee productivity growth has flatlined when self-improvement and education, even entirely within the scope of someone's job, is often a taxable benefit.
This whole area is a gray mishmash of arguments (does buying pizza for the office count as an expense or a salary item? Depends on frequency, the tax courts, etc).
Not after 2017, I think?
It doesn't change your point of course, I just find it interesting.
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".)
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.
[1] https://turbotax.intuit.com/tax-tips/jobs-and-career/employe...
Going from the growth in GDP, that does not seem to be true.
I personally pay for O'Reilly's service, which my employer used to provide, and just see it as an expense of my profession. I'm also paid drastically more than average because I'm knowledgable about more things and have more ideas to draw from.
I'll happily let my employer pay for things that also benefit me personally. But I'm also not going to begrudge every equipment purchase or travel expense to buy/do things I want even if they're also connected to work in some manner.
He made the point that, what happens if your employee gets hurt working from home? It's a silly example but the employer could be liable for some reason since the employer could have failed to provide a "safe working environment".
Not sure if this actually could happen in reality, but an employer has to think about these possibilities and determine the risk (and mgmt overhead) of remote vs in person
(But then, how far does that go? A non-slip mat? Shelving? Rewiring your home for old electrical?)
You lose less than $500 after-tax and gain $500 cash (untaxed).
I don't necessarily disagree with the principle, but this seems like an accounting headache that's more trouble than it's worth.
Especially for bills that are at a fixed monthly cost - I already am paying for internet, the marginal cost to me is nothing.
And furthermore, if I knew someone who was so insistent on penny pinching their employer in such a way, I would ask if they really want to give their employer such "hooks" into their personal life and finances? Do I really want to be in a situation where I go to my employer and say "as you can see, 40% of my time online was spent working" and then they get to audit my records and find that 50% of the time I was spent working was also on Netflix? Is that change in precedent worth the few bucks you save?
For 2020 and 2021, if you worked remotely during part of the year because of the pandemic, you would get a tax credit. The value of the credit was either flat (a few hundred dollars) or proportional to things like the size of your home office (multiplied by work related expenses like internet, power etc). It was a sizeable credit.
https://www.latimes.com/politics/story/2023-10-31/remote-wor...
If he/she provide just the walls it's up to the employer provide and get back the rest. If it's already fully operational it's up to the employee keep it up and running.
For the IT part, it's up to the company IT choosing a fully managed or partially managed setup, case by case.
This might sound complex and long, but it's the way to avoid problems on both sides and a way to mitigate on both sides the "quick&easy" change that allow employers to drop employees as objects, and employees to treat employers like stakeholders in a consulting setup witch is by far the main friction point in full remote work.
BTW, if you have a home office, you can already deduct from taxable income a cut of those, but if you cheat on it the IRS is going to fix your wagon. The home office tax deduction also is going to reduce the basis of your profit on selling the house, meaning more taxes. Companies aren't set up like the IRS to audit your utility bills. Besides, do you really want your employer auditing the percentage of your electricity use? I'm sure they don't want to, either.
Me, I don't care to do the paperwork required for this, and don't do a home office deduction.
P.S. I'm not a CPA and this is not tax advice.
Note that it may only apply if the employee lives in CA.
The office is in Kansas City… they hired me remote day 1, the role was remote, and I never lived in Kansas City.
I don’t know if I’m glad that this does not affect them or if I wish it did. On one hand it’s ~$900 more a year. On the other hand, more pressure for them to kick me if they had to do cuts.
This will force them to enforce it, with the threat of having to pay a big bill if any employee claims to be working from home.
"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."
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.
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
After all, the whole point of this decision is to equalise the "windfall", as the article says.
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.
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).
Cute, i wonder if they're reimbursing these days, because they didn't reimburse anything when i was 3/5ths remote 11 years ago.
> the cost of dedicated home office space
If that actually happens, expect lots of RTO. That extra bedroom for the home office is priced similarly to 100 sqft of office space.
<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.
There has not been a point in the last 40 years where they shouldn't be
https://www.irs.gov/credits-deductions/individuals/home-offi...
In an ideal US world, where healthcare insurance premiums aren't insane and aren't skewed toward large corporations, then everyone should be a contractor.
The person hiring you sends you payment and you do the work in accordance with your contract. At the end of the quarter, you total up your expenses (as already allowed under existing law) and subtract them from your revenue. You owe taxes on what is left.
With remote work, its really hard to anticipate costs you do not control e.g electricity. Furthermore, even the IRS insists that only subtract expenses that are substantially used for work. Years ago, anyone with a home office would consider their entire mortgage a business expense. Now, its subject to a complex set of rules taking into account the time spent actually working and the relative square footage of your work area relative to your home.
Furthermore, isn't this creeping into the territory of company towns? At what point would it just be cheaper to throw people into barracks, deducting room, board and laundry and simply remit the rest to the worker?
I’d much rather have them pay hourly workers for commute time and reimburse in-office workers for gas/bus/subway costs.
Otherwise why don't companies pay for my gas/tire/shoe soles/&c ?
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%.
It's part of the overall value proposition to the employee, but it cannot be part of salary.
https://hbr.org/2020/08/research-knowledge-workers-are-more-...