Major businesses like Google and Twitter are asking their workers to work remotely to keep them safe from the coronavirus outbreak and slow the disease’s spread. For employees, that is prompting a host of questions about logistics — including whether they might incur extra costs.
To be sure, not every type of business can ask its employees to work from home, such as essential services including utilities and grocery stores. Yet it’s clear that millions of professionals are temporarily joining the ranks of the remote workforce. It’s anyone’s guess how long it will last.
There may be a clear silver lining to remote work: it often saves workers money by cutting expenses such as commuting costs, say remote workers and experts in the field. But you’ll likely face some tradeoffs, such as paying for more bandwidth to handle videoconferencing and office supplies – the type of “expenses that are normally provided within a traditional office setting,” says Amelia Green-Vamos, a Glassdoor career trends expert. Some employers say they plan to reimburse workers for those extra costs.
Remote workers typically save about $4,000 a year by working from home, according to a study from FlexJobs, an online job service that specializes in flexible jobs. That comes from saving on commuting costs as well as paring spending on coffee, lunches and a professional wardrobe.
“We joke that the uniform at our company is yoga pants and jeans,” says Sara Sutton, the founder and CEO of FlexJobs. “You save money on laundry and dry cleaning, which is kind of nice.”
Coronavirus impact:What is essential and non-essential during a pandemic?
Lower commuting costs
The biggest cost savings? Commuting costs. That’s something that Laura Forczyk, who runs her space consulting company Astralytical from a home office, discovered when she began working remotely about four years ago. She and her husband switched from a two-car family to one car, saving on insurance and maintenance. It also means more free time because she’s not spending time getting to the office.
“It didn’t make sense to make two car payments,” she notes. Overall, she says, “I can’t think of anything that has been more expensive” by working at home.
Even so, don’t expect to save the full $4,000 estimated by FlexJobs — that calculation includes the home office deduction that freelancers receive under the current tax code. Unfortunately, full-time employees typically don’t get the same tax breaks, says Eric Bronnenkant, the head of tax for financial services firm Betterment.
Tax break? Probably not
The tax reform ushered in by the Tax Cuts and Jobs Act in 2018 eliminated a tax break for unreimbursed employee expenses. Before the tax overhaul, employees could deduct work expenses not covered by their employers if spending exceeded 2% of their adjusted gross income.
But that tax break was eliminated due to the new tax code, Bronnenkant says. And home office deductions for employees are usually only available to small businesses or self-employed workers.
“At this point, at least at the federal level, there are no tax breaks for unreimbursed employee expenses,” he notes.
Even if employees may not incur much additional cost, some companies are spending on equipping their employees for remote work. Take Bungie, a video-game maker known for hits such as “Halo” and “Destiny.” Its location in Bellevue, Washington has placed it squarely in one of the coronavirus hotspots – King County, Washington, which had 793 cases as of March 20.
That prompted the company to develop contingency plans several weeks ago, including how to shift its roughly 700 employees to remote work, says Patrick O’Kelley, chief operating officer of Bungie. As part of the planning, the company purchased about 400 developer-grade laptops, which O’Kelley says they’ve nicknamed “beefy laptops.” Overall, the company is spending about $1 million to equip its employees to work from home.
“They’re basically high-spec developer-grade laptops, versus the typical productivity laptops most professionals would use,” he adds.
That was part of an effort to make sure employees had everything they needed to do their work at home, says Carrie Gouskos, principal producer at the company. She added that employees can also purchase equipment for $50 or less and get reimbursed, such as one worker who discovered he needed 50 feet of ethernet cable to reach his computer.
In the meantime, teams are learning how to work via video-conferencing and how to maintain their productivity, Gouskos adds. Some of these techniques may transfer to the office once employees return, such as learning to give creative workers and coders blocks of time to finish a project, she added.
A long-term payoff
Other flexible work experts say it’s likely that the temporary switch to remote work could accelerate the adoption of the practice after the crisis ends. Tools such as Zoom, a virtual meeting app, can help ease the transition to remote work, notes Gene Zaino, founder of MBO Partners, a services company for independent workers.
TransparentBusiness, which sells a productivity-monitoring tool for remote workers, is seeing new interest from businesses and government agencies as they ask their workers to shift outside the office, says its chief transparency officer, Moe Vela.
Bungie’s O’Kelley says he believes the investment in remote work will have a payoff: “This has led us to evolve, and I don’t think any of us begrudge this investment we made.”