This article was updated on Sept. 6, 2018.
In today's technology-driven business landscape, work-from-home tools have never been more important. When your small business begins to allow employees to work off-site, you must take the initiative to establish and clarify the boundaries of the remote relationship. It's also crucial to provide your remote workers with the tools they need to succeed.
Does the Law Require You to Reimburse Your Employees for Business Supplies?
According to the United States Department of Labor, the Fair Labor Standards Act (FLSA) establishes the principle that "an employer may not lawfully require an employee to pay for an expense of the employer's business if doing so reduces the employee's pay below any statutorily-required minimum wage or overtime premium pay." As such, you must reimburse any work-related expenses that fall into this category. In general, it is a best practice to reimburse employees for reasonable business expenses.
In addition to FLSA requirements, consider consulting with applicable state and local laws, too. After all, different states and local jurisdictions may have different minimum wage restrictions, and certain states have their own specific requirements with respect to deductions and reimbursements. For example, some states, such as California, require employers to reimburse employees for business tools. Under California labor law, employers must provide employees with all the necessary tools and equipment they require to perform their jobs. In some circumstances, employers may require employees to supply their own hand tools—for example, when an employee earns at least twice the state minimum wage rate and when hand tools are routinely required by the employee's trade.
However, even in cases where both federal and state regulations do not require you to reimburse your employees, you may still choose to do so as the gesture can help boost morale by showing your employees that you care about their financial well-being.
Here are three ways in which you can manage your remote workers' need for office supplies:
1. Provide a Stipend
In order to offer a stipend, you must define a mutually acceptable amount of money that can be paid quarterly or annually to a remote worker in order to cover the cost of office supplies. With this approach, you have the certainty of a ceiling on your office supply costs, and you also give the remote workers the flexibility to buy the supplies they need when they need them, from whichever supplier they choose. If you decide that this option makes the most sense for your business, you should create a clear policy outlining the amount and payment schedule of the stipend, and you should apply the policy consistently among your employees. You will want to make sure that the stipend is sufficient enough to prevent employees from falling below minimum wage requirements.
2. Offer a Reimbursement
In this scenario, the remote worker would buy the work-from-home tools they need and then send you the receipts, making a reimbursement request for the expense. You should ensure that you have a sound policy outlining which expenses will be reimbursed, and a procedure for tracking and recording reimbursed expenses.
3. Provide an Office Supply Account With Your Preferred Supplier
This arrangement helps ensure that your remote worker gets access to your bulk purchasing program and the ensuing lower prices. The worker will not have to front his or her own money, as the bill will go directly to you, allowing you to closely monitor ongoing costs.
By having a clearly defined system to manage office supplies for remote workers, you can help ensure that these off-site employees are able to be as engaged and productive as possible. As an employer, you may want to consult experienced HR counsel to help ensure your remote work arrangements meet applicable expense reimbursement and other employment laws.
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