The discussion about remote work is ongoing and possibly something everyone’s fatigued about to some degree. We still receive questions regarding remote work, and it continues to be a relevant topic of discussion when it comes to offering the benefit of work flexibility and retention. While not all businesses can offer remote work options, those that can should consider how to make it a long-term, sustainable way of operating. The biggest question employers ask regarding remote work seems to be whether employees are productive when they are not at the office.

There have been several studies conducted in 2022, such as those by software companies Owl Labs and Prodo score. The studies showed that employees who are productive at the office are also productive working remotely. Employee productivity appears to be intrinsically motivated regardless of the work environment. Owl Labs’ research showed that employee retention and satisfaction increase with remote work. Working from home provides added flexibility, a more relaxed and comfortable work environment, and better mental well-being when there is also an emphasis in work/life balance; all of which leads to increased focus and productivity especially for workers who are already productive contributors. The bottom line as it relates to productivity is that employees who are not productive at the office are not going to be productive working from home, whereas employees who are producers will continue to be equally if not more productive with the flexibility of working from home. The real indicator is an individual’s intrinsic ability to use their skills and knowledge in a focused way to prioritize and accomplish the work successfully. The work space itself, whether it’s the business office or the individual’s home, is less relevant to the question of productivity except that the flexibility is a benefit to those who are already productive not a detractor.

Another study of 1,000 full time remote workers found that once workers became more accustomed to the hybrid work style, 56% self-reported an improvement in mental health and work/life balance.  Another benefit has been increase in physical activity with 75% stating that they are able to be more physically active when working from home. When it comes to employee wellness, working from home increases the potential for well-being, which is a key benefit to the workplace given the rise in mental health issues leading to absenteeism and increased need for accommodations and health care usage rates. Flexible work is arguably an important part of a company wellness program given the data.

The bigger question employers should be asking is not about productivity, the data speaks to that question. The real questions should be regarding compliance, particularly for California-based employers. California Labor Code requires that “all necessary expenditures or losses” an employee may incur as part of their job be reimbursed by the employer. Typical expenses for remote workers include the cost of internet, cell phone or other phone lines, computer, and other office equipment.

Cell phone and internet stipends are becoming common place, though there is no set amount in the code for employers to use as a guiding point. According to attorneys at Littler, defensible monthly payments can range from $25-$75 per month and that an appeal process allowing employees to speak up when the amount seems to low should be included in the policy.  Consider the cost benefit of having to review every detail of employee utility bills to determine an accurate reimbursement percentage when it could be disputed. It may be a better option to provide a flat amount to everyone in the same circumstances and document how you arrived at that reimbursement rate.

Remember that in California, expense reimbursements are non-taxable accounts payable rather than pay rolled wages. Providing a separate check to cover expenses such as ergonomic chairs and keyboards as well as printer paper and other office supplies is the best way to provide reimbursement.

We recommend establishing a clear telework policy that addresses expectations, agreements for working remotely, the hybrid work schedule, what is considered the primary work location, and how reimbursements are handled. As an HR Consulting firm, we have experience helping employers establish policies and can partner with you to review or write your telework policy as well as offer advice and training on the complexities of managing remote workers. Overall, the question of remote work should not be approached from the mindset of cost savings for the employer, but instead from the perspective of how remote work increase employee satisfaction and productivity towards better retention in a tight labor market.

Founded in 1987 in Santa Rosa, California, The Personnel Perspective is a full-service HR management consulting firm specializing in human resources, leadership development and training, and recruiting. The firm’s core belief is that a company achieves organizational excellence through its people. Contact us to learn more: (707) 801-0140.