The COVID-19 pandemic has had a profound impact on the way we live and work, with remote working becoming a widespread practice. However, three years on from the initial shift to working from home, some employees are now questioning the costs associated with this arrangement. As household utility bills continue to rise, working from home has become more expensive than ever. Many workers are unaware of how they can recover some of the direct and indirect expenses incurred.
Direct expenses are relatively easy to quantify and reclaim. These expenses are directly related to the tasks required for work, such as purchasing a laptop, monitor, printer, stationery, or postage. Employees can claim these expenses back from their employer, who will reimburse them in full. Most employment contracts include a clause stating that reasonable work expenses will be reimbursed. Companies should have straightforward procedures in place for employees to recoup these costs, and it is advisable to resolve any issues informally before considering formal internal redress procedures.
In the event that an employee is not reimbursed for work expenses, their legal options are limited. They can file a complaint under the Payment of Wages Act through the Workplace Relations Commission (WRC) if they have been paid less than what they are owed. Unfortunately, expenses are excluded from the definition of “wages” under this legislation, making it challenging to recover unpaid work expenses through legal means.
Indirect expenses, on the other hand, are costs that arise due to remote working but are not reimbursable work expenses. When employees work from home, they use electricity, gas, and broadband for lighting, heating, and connectivity. While employers can contribute €3.20 per working day to cover utility expenses, most do not have a legal obligation to do so. However, employees may be eligible to claim a portion of these utility costs back as income tax relief from Revenue.
Currently, workers can claim up to 30% income tax relief on electricity, gas, and broadband bills. For each day spent working from home, employees can claim relief on approximately one-third of their utility expenses, which is equivalent to a typical working day of eight hours. To calculate the relief amount, employees should combine their total utility costs for the year, multiply by the number of days working from home, divide by 365, and then multiply by 30%. It is crucial to upload copies of the bills as part of the application to avoid rejection.
Employees must be able to provide evidence of an agreement with their employer regarding remote working and the specific periods during which they worked from home. While some employees may have remote working arrangements clearly outlined in their contracts, others who transitioned to remote work may not have the same level of certainty. In the absence of contractual provisions, employers should establish comprehensive working-from-home policies that define the terms and conditions of remote work arrangements.
While remote working offers increased freedom, it comes at a cost. As household utility bills continue to rise, employees should be aware of their options for recovering direct and indirect expenses. By following the proper procedures and maintaining clear communication with their employers, workers can ensure that they are fairly reimbursed for the expenses incurred while working remotely.
Barry Crushell, an employment law expert and solicitor at Crushell & Co, advises employees on the legal aspects of remote working and the reimbursement of work expenses.