Workers Are Suing Their Employers Over Remote Work Expenses

Workers are arguing in lawsuits that their employers should cover costs associated with working from home

Many white-collar employees throughout the country have been compelled to work from their couches or kitchens since the start of the pandemic. Remote work has forced employees and employers to develop new social norms, perhaps irrevocably altering the nature of work.

There has been an increase in employee lawsuits alleging that they should be reimbursed for expenses incurred while working from home during the pandemic. This is another consequence of the mass relocation of office workers.

According to more than a dozen lawsuits reviewed by The Los Angeles Times, housing costs like phone and internet subscriptions, as well as additional heating or cooling energy, can total $50 to $200 per month per employee.

If you include the cost of items like hand sanitizer or office supplies, it may cost $5,000 or more for each employee. In addition, some lawsuits seek compensation for the money that employees might have made had they rented out their residence office rather than utilizing it for work.

After eliminating such perks during the pandemic, tech companies that provided free meals, dry cleaning, and other facilities to help in-office workers live better have incurred significant backlash from employees. Meta recently faced criticism when it cut free services such as laundry and dry cleaning and made changes to its free dinner service.

Other lawsuits, many of which are still being argued, have singled out such companies as Wells Fargo Bank, Liberty Mutual Insurance, Visa, Oracle, and Bank of America. The firms sued for failing to reimburse their staff for business expenses have claimed in court that the pandemic caught them off guard and unprepared. A typical response to the lawsuits is that it is a one-in-a-hundred-year pandemic; what do you expect?

According to attorneys, the burden of additional expenses should not be placed on the employees. In a statement from Wells Fargo, the bank claims to have provided instructions on how to seek reimbursement for reasonable and necessary expenses incurred due to conducting Wells Fargo business at home. These expenses might include office supplies and cell phone and internet services, and the bank insists its policy complies with California law.

The lawsuits highlight one of the most significant changes the pandemic wrought in the commercial world: the mass movement of staff from business offices to home offices to minimize the transmission of coronaviruses.

In a survey of nearly 6,000 Americans conducted by the Pew Research Center, 71 percent of those employees who could work from home in 2020 were working from home all or most of the time. However, before the coronavirus pandemic, only 23 percent of those employees teleworked frequently.

Because few employers had clear rules in place for reimbursing employees for work-related expenses at home, legal disputes have arisen, according to academics and legal specialists.

Although the federal government has no requirement that firms pay for costs incurred by employees who work from home, many states, including California, have enacted legislation on the subject. The California labor commissioner's office has yet to release COVID-specific cost reimbursement standards.

The state's labor code is skewed in favor of employees. The law requires employers to pay workers for “all necessary expenditures or losses incurred by the employee as an indirect consequence of the discharge of his or her duties.” Those fees are defined as all reasonable costs, including but not limited to attorney's fees incurred by the employee in protecting their rights under this section.

According to research by Stanford economics professor Nicholas Bloom, employees were far more inclined to pay for home office equipment such as computers while they were making much more significant wage increases than they are now. According to him, fewer than 10 percent of businesses reimbursed workers for things like new furniture or internet fees.

Some believe it is reasonable for a company to cover the cost of equipment like laptops, webcams, microphones, and a workstation. For more broad expenditures like home office refurbishment, enhanced broadband, or lunch, these would be determined case-by-case.

Many organizations have implemented rules to compensate for the typical costs of new work. Several technology firms, such as Google and Shopify, announced initiatives to reimburse staff up to $1,000 for work-from-home equipment early in the pandemic.

Employees may be hesitant to sue their employer over home business expenditures because, while the expense is greater, working from home provides several advantages, such as a more flexible schedule and relief from daily commutes and associated costs.