For those of us who have been fortunate to be able to continue working from home, you may have noticed that your utility bill has been creeping up over the past couple of months.
This leads to a question. Should employees who are working from home be allowed to claim for utility expenses from their company?
Given that many leading tech companies in the United States such as Twitter have announced that their employees will be allowed to work from home ‘forever’, this could be an important topic that both companies and workers need to consider for the future.
Companies Incur Work-Related Expenses All The Time
Regardless of your views about whether or not you need to be in the office to be productive, or how good or bad your current office space is, you need to remember that companies do incur an additional expense to provide their workers with an office space. This includes rent, and other essentials such as internet access, utility and for some companies, a well-stocked pantry.
During the circuit breaker period, companies that are fortunate enough to have their employees work from home will find themselves with a lower utility bill, as a result of employees not being able to work in the office.
At the same time, it will be incorrect to suggest that this additional utility bill, which the company can save on, no longer exists. Instead, the cost is now transferred from the company’s office to its employees’ homes.
Increase In Air-Conditioner Usage
A simple example will be the usage of air-conditioning. Many of us work in an environment where there is air-conditioning, paid for by our company.
If we have a study room to work from, we will likely want the same working environment that we are used to. This means turning on the air-conditioning in our study room for the duration of our working days.
If we work the same number of hours as we normally do in the office, this could be eight to ten hours each day. Multiply this by 22 days and it adds up to an additional 220 hours of air-conditioning each month on our utility bill.
Should our company be paying for this?
Difficult To Determine How Much Additional Cost Each Employee Is Incurring
Unlike other expenses such as transport and entertainment, it’s difficult to calculate how much more an employee is incurring in utility expenses because they are working from home.
For a start, every employee has a different work-from-home environment. Some employees may be working in their living room without air-conditioning, which will keep their work-from-home expenses low. Others may have a designated study room that they can use with the air-conditioning turned on the entire day, which will increase their utility bill significantly.
Secondly, it’s not possible to expect employees to segment between work utility expenses and home utility expenses. Each month, a single bill comprising of the total usage is charged and paid for. There is no way an employee can accurately split the bill and know how much should be attributed to the company.
How Companies Can Compensate Their Employees For Work-From-Home Utility Expenses?
One possible suggestion is for employees to take an average of their utility bills over the past months before they started working-from-home, and to compare the difference to what they are now paying each month after the work-from-home arrangement started.
For example, if your usual bill is $150 and you are now spending $250 each month, it might be easy to attribute the additional $100 to having to work from home.
While this is not a wrong method, neither is it full proof. As many of us are working from home because of the circuit breaker, it’s likely that our utility bill would have gone up anyway due to an increase in time spent at home, even if we weren’t working. So, attributing the full increase in our utility bill because of work-from-home isn’t accurate or fair to our company either.
Companies Shouldn’t Be Passing Their Cost To Employees
When you work from an office, all your expenses incurred in the office (e.g. water, electricity, air-conditioning, stationery) is paid for by the company. However, when you incur these same expenses while working from home, you are the one paying for it.
So, while employees pay a higher cost for their utility because of work-from-home, the company gets to reduce their operating cost.
One way for companies to show their support to employees is to provide a utility allowance to each employee. This can be done by dividing the utility bill that a company typically incur for its office, and to share it among its employees equally. So, if a company has 10 employees and typically incur a monthly bill of $500, they can consider giving each employee a utility allowance of $50 each month.
Another way is to simply give employees a choice to work in the office or from home once the circuit breaker restrictions are removed. This way, employees can decide for themselves if they prefer working from home, knowing they will incur an additional cost, or would prefer to work in the office.
To conclude, while reducing operational costs is important for businesses during this period, companies shouldn’t do it at the expense of their employees. If saving money for the business means adding cost to their employees, companies should find a way to compensate them for this.
DollarsAndSense.sg aims to provide interesting, bite-sized and relevant financial articles.
Learn together with like-minded Singaporeans at the Personal Finance Discussion SG Facebook Group by discussing a range of personal finance topics.
If you have not done so, subscribe to our free e-newsletter to receive exclusive content not available anywhere else.