At the start of the coronavirus pandemic, businesses worldwide rapidly adopted work-from-home strategies. Eventually, they realized this new way of working was not a temporary ordeal. Instead, working from home could be a lasting situation.
While many companies have plans to return to the office, many others — like Dell and Twitter — have said work from home would be a permanent component of their workforce accommodation. This prolonged change affects an organization’s work-from-home reimbursement policy, especially with regard to network technology expenses.
In a work-from-home reimbursement policy, employers pay for certain items to support their employees as they work remotely. Some of those items might include internet connectivity, phone services and office equipment.
To start, companies should consider their existing expense reimbursement rules and procedures and assume that any new work-from-home reimbursement policy is in line with their current guidelines. Understanding that network technology will be key to any reimbursement plan, companies should establish some minimum guidelines around work-from-home technology expenses.
For instance, establishing a minimum connection rate and equipment standard ensures that work from home is as close to an on-premises experience as possible. Some employees may have opted for a lower-speed ISP package and now must also contend with children at home doing distance learning, leading to an overall connection experience back to headquarters that is lacking.
Establishing a reimbursement rule for internet connectivity should include some parameter about the connection as well. The goal should be using reimbursement to drive better overall network connectivity, not just offsetting an employee’s existing bills.
Home office internet reimbursement policy
If a company requires internet connectivity for home-based workers, most employees — who receive W-2 forms — can’t deduct this required expense on their taxes. This implies employees must potentially spend money in order to do their jobs. Companies should recognize this as they roll out initiatives and plan on offsetting the expense in some manner. A 40-hour workweek represents less than 25% of the total hours in a week, so reimbursement targets should probably be below 25% of the typical bill for that region.
As of 2019, 90% of U.S. households have broadband connectivity; any employees in the remaining 10% should be handled as an individual exception.
For most companies, establishing a per diem that is paid through a paycheck will be a more cost-effective solution than requiring employees to file expense reports. As companies begin to return to the office, this per diem can be stopped or scaled down to match the percentage of employees who return to on-site jobs. Companies should assume a gradual ramping up of on-site participation, not a quick transition.
Phasing out the internet per diem should consider overall community infection rates and office participation; it should be tied to a company’s overall work-from-home strategy and communicated within that framework. Considering the potential business liability should be part of this strategy, this decision should involve business management, HR, legal and safety functions as applicable.
A company should differentiate between those employees who moved to temporary work-from-home policies versus those employees who are working from home permanently. Any new permanent home-based function should have a broader overall reimbursement strategy that encompasses more than just internet connectivity.
Align investments with job functions and productivity
As employees will be connected to headquarters via a VPN in most cases, VPN monitoring is essential. With the proper monitoring tools, a company can see how employees are connecting and at what rate.
For some knowledge workers, like engineers, lawyers or executives, high-bandwidth connectivity could be critical. In these cases, instead of reimbursing a monthly ISP bill, it may make sense to extend the network edge and provide a software-defined WAN appliance and connection to the employee at home.
Just because employees are now working from home, don’t assume any and every technology expense is a net positive. Investments in different areas can benefit a company if they are aligned to actual job responsibilities. Building a work-from-home reimbursement matrix — like the sample below — can help target company investments into the right areas based on job function.
While most companies will probably need to start some type of reimbursement for employees who work from home, these costs will not necessarily offset many of the existing expenses that a company will continue to accrue. A comprehensive and deliberate strategy of tying the work-from-home reimbursement policy to areas that are driving the greatest productivity can bring more success in these trying times.