Barry Crushell: Working from home brings more freedom, but it comes at a price

Three years on from being compelled to work remotely, some workers are beginning to question the associated costs

Many workers remain unaware of how they can claw back some of the direct and indirect expenses, that arise from remote work.

The arrival of covid-19 significantly changed the way we live, and work, forever by accelerating the practice of remote working to an extent unimaginable before the pandemic.

Three years after most employees were initially compelled to work from home, despite some obvious advantages, some workers are now beginning to question the associated costs.

As household utility bills continue to skyrocket, working from home has undoubtedly become more expensive than ever. Many workers remain unaware of how they can claw back some of the direct and indirect expenses, that arise from remote work.

Direct expenses are quite easy to quantify, and reclaiming back these types of costs shouldn’t be problematic.

Direct expenses are those most closely related to doing one’s work. Obvious examples might include expenses such as a laptop, monitor and printer, or incidental costs such as stationery and postage.

Most items a worker purchases, to ensure they can carry out the tasks assigned to them, should reasonably be considered a direct expense.

These expenses are claimed back from the employer directly, as if the company had made the purchase themselves, reimbursing the employee the full value.

Most employees have a clause in their contract of employment, which notes that all work expenses, reasonably incurred, will be reimbursed.

Recouping costs

Companies should have simple procedures for recouping these costs.

Employees should keep copies of all relevant receipts and be able to provide a very clear explanation as to what business use the expense related to.

If issues do arise, it is always best to try and attempt to resolve them informally at first. If unsuccessful, employees may consider invoking the internal redress procedure, if they feel aggrieved that a legitimately incurred work expense, has not been refunded.

Save for costly civil proceedings, employees have very limited legal remedies, to recover unpaid work expenses. 

When an employee has been paid less than the amount owed to them, they could raise a complaint under the Payment of Wages Act, through the Workplace Relations Commission (WRC). 

Unfortunately, expenses are specifically omitted under that legislation as “any payment in respect of expenses incurred by the employee in carrying out [their] employment” are excluded from the definition of “wages”.

Indirect expenses

Indirect expenses are those that an employee may incur, because of remote working, but are not reimbursable work expenses. 

When an employee works from home, they are using electricity, gas and broadband, for light, heat, and connectivity. 

While employers can contribute €3.20 per working day from home, to cover utility expenses, most employers do not, nor do they have a legal obligation to do so. 

However, employees may be able to claim a proportion of these utility costs back, as income tax relief, from Revenue.

Presently, workers can claim up to 30% income tax relief on electricity, gas, and broadband bills. 

For every day that a worker spends working from home, Revenue will allow them to claim income relief on roughly one-third of their utility expenses, eight hours, which equates to a typical working day.

To calculate the amount of relief payable, simply combine the total utility costs for the year, multiply by the number of days working from home, divide by 365 and multiply again by 30%. 

Copies of the bills relied upon must be uploaded as part of the application, otherwise, the claim can be rejected.

It is important that the employee can, if challenged, be able to prove there is an agreement with their employer that they can work from home and the periods when that work was undertaken.

While a new generation of employees may have remote working arrangements clearly articulated in their contracts of employment, most employees, who ‘fell’ into remote work, may not have the same level of certainty. 

In the absence of contractual provisions, employers should ensure they have adequate working-from-home policies, that sets out the terms and conditions of those arrangements. 

While working from home certainly brings more freedom, that freedom comes with a price.

Barry Crushell is an employment law expert and solicitor at Crushell & Co