Q: I recently became the boss of a small business. During the coronavirus pandemic, some of our remote-working employees decided to move out of town without asking for or receiving employer approval. Who is responsible for their expenses when they come back to town for a meeting or conference — the employer or the employee?
The remote workers who have moved out of town seem to think the employer should pay for their transportation, hotels and meals when they come back to town for work. Besides being an added expense for a small business, it also seems unfair to local employees, since we don’t cover their commuting costs when they come to the office. Any thoughts on this?
A: As the dust settles from the Great Resignation / Great Resettlement / Great Whatever-we’re-calling-it-now, remote work has enabled more workers than ever to move out of their offices — and in some cases, far away from them. Some seek more affordable and spacious housing, or to be closer to family or live in an area that suits their overall well-being.
But employees who abruptly and unilaterally change the terms of their working conditions, under the theory that it’s easier to ask forgiveness than permission, have to understand that they’re still at risk of hearing “No.” With a worker-favorable job market and employers desperate to retain talent, many workers have decided they’re willing to take that risk.
This employee-driven exodus has forced many employers to rethink their business model and how they manage their dispersed workforces. Some, including Meta/Facebook, Novartis, Dropbox and Slack, are embracing a remote-first, “work from anywhere” model for many or all employees. Others, including Apple, Amazon, Microsoft and Tesla, are choosing to limit or prohibit remote work. Between those extremes are employers like you, looking for a hybrid solution that’s legal, cost-effective and fair to both out-of-town and local workers.
First, there’s the question of what’s legal. As you note, regular commuting costs between home and work are not usually covered by employers, and that commute time is not generally considered work time. But when a worker’s home becomes their primary workplace, it can change how the law views travel between that primary workplace and other employer-owned sites.
Federal law doesn’t require employers to reimburse employees for any expense unless it reduces their pay below minimum wage. But California and other states do require reimbursement for some work-related expenses including travel. So you should start by determining whether you are legally required to cover the cost of transporting employees to your office, or have the option to refuse to do so.
Then there’s the question of cost. Covering travel costs would be an added expense. Allowing remote workers’ homes to become their primary workplaces, especially if they’ve moved to another state or country, can also mean additional tax exposure and other new expenses. But refusing to allow these changes can also cost you if those workers quit and you need to replace them.
If you decide paying for travel is the better investment, you can control those costs with a clear, consistent expense policy; limiting the frequency of required office visits; and revising your compensation structure to account for variable cost of living in different geographical areas, including pay cuts or leveling off future raises and bonuses for workers in lower-cost areas. You may even be able to lessen the financial blow if the new expenses you’re paying are tax-deductible. In any case, you should be talking to tax, legal and benefits experts to determine the most cost-effective options.
Finally, there’s the question of what’s fair. As you say, it doesn’t quite sit right that employees who made a unilateral decision to move out of commuting range should travel, sleep and eat on the company’s dime when local employees bear those costs themselves. And don’t kid yourself that the local employees won’t notice or care about that disparity.
But as with any personal lifestyle choice that can result in workplace friction — workers with kids vs. those without, early birds vs. night owls — there are ways to balance the plates. If you’re not already doing so, you can offer local employees transit and parking perks; provide group meals at the office; and, of course, allow local workers the same kind of flexibility and autonomy over their work hours that their out-of-town colleagues enjoy. And you should design a policy laying out how your company will handle remote-work and relocation requests in the future.
There’s no guaranteed solution to make everyone happy, but if you are deliberate, consistent and transparent in your response to these changes, your company can come out stronger for it.