Fully Remote: Home Office Should Not Be a Financial Burden on Employees
We’re excited to announce our new Replicated home office reimbursement program, and thought it would be best to outline the thinking and work that went into this new policy.
Like many of our peers, in 2020 we decided to take our team fully remote. We let go of our LA-based office and began to hire as a fully remote company throughout the US (we’re hiring.. A LOT.. btw). To us, that meant being able to hire the best talent wherever they chose to live. For the majority of our team members, this transition to fully remote meant they were now working from home, setting up the environments needed to feel comfortable and productive.
We thought about the fact that most of the home office setup involved actual expenses for the employee and then thought about the savings from letting go of our physical office. It was a no-brainer for us to look at how we could invest those savings into taking the financial burden off our employees.
It was an idea I was excited about and when our VP of People, Melina Murray, joined, she was equally enthused by the idea and took on the project immediately. And so, as part of that transition and to illustrate our commitment to creating the best possible work environment for our team, in May we officially launched our “Home Office Reimbursement Program”. Replicated reimburses all employees for various expenses related to setting up and maintaining their home office, or getting a co-working space, up to $10,000 per year, per employee.
We’ll dive into a few details on why this is important to us and valuable to our team.
It Just Makes Sense
One of the benefits of working for Replicated was that we had a great office in the heart of the westside of Los Angeles. While we had some remote folks previously (for whom we’d often get a co-working desk at a local WeWork or similar facility), most of the team came to the office. Going fully remote gave team members back their commute time and offered many other benefits, but it inadvertently shifted the burden of maintaining, or even having, a great work environment to each employee. These expenses are real. Several people on our team moved into bigger apartments at their own expense in order to have the space they needed to be productive at home. Witnessing this shift was what started the idea that it might be worthwhile to consider how to help with this.
We believe that the best work we do is done in a comfortable and focused setting. Cal Newport’s Deep Work does a great job of explaining how we can get the most out of ourselves. We believe that having a dedicated space is ideal and we want to encourage our team to make that work for them.
New 2018 Tax Change Impacts
Before 2018, anyone who primarily worked from a home office could deduct office and work-related expenses via IRS form 8829. In 2018 federal tax policy changed so that W-2’ed employees can no longer take these deductions. This actually prohibits employees from writing off their home office expenses… ouch. Melina and our Head of Operations delved deep into this topic to figure out how we could adapt the premise of the form and calculations into a non-taxable expense as part of our program and to our delight, we found the solution.
What Can Be Expensed
When new team members join Replicated we provide or reimburse them for the purchase of one-time home office essentials (often called “direct expenses”) like a standing desk, quality chair, monitors, keyboards, laptops, mice, headphones, webcams, etc (usually around $3k in expenses). Additionally, we’ve had a policy in place since the start of COVID to reimburse home internet expenses as it’s critical to have a fast, stable internet connection to work (usually around $100/month). Starting now, we’re adding on a per employee, per month budget to pay for home offices in accordance with the IRS’s rules for indirect expenses. We set up an Accountable Plan to manage this program, along with other expenses to ensure we are aligned with the appropriate laws and regulations.
What does this mean? We realize that the decision to become a fully remote company places an additional burden on our employees to construct and maintain a productive work environment. It means that we are not going to burden our employees with the cost of our decision to be fully remote. It means we are providing them with the ability to set up the environment in which they work best without worrying about having to cover it out of their own finances. It means that instead of holding onto the savings from no longer having a physical headquarters, we are investing that money into improving each employee’s day-to-day working experience.
This is the breakdown of our Home Office Expense Program:
We’re doing all of this because we think it is the right thing to do for our employees. Hopefully, this post will encourage other companies to take the same steps and join us by adopting similar policies.
We want everyone at Replicated to be comfortable, refreshed, and energized in their home office. That is why in addition to the home office setup, our paid time off policy asks that every employee take a minimum of 3 weeks off each year with no cap on the number of days. We are results-driven and we know that happy employees provide the best results.
For talented individuals stuck in a job where these are not the policies, but who would like to work remotely and not worry about bearing the cost of their home office expenses… we’re a Series B funded enterprise software company with amazing customers (like HashiCorp, Puppet, UiPath) that is hiring into most positions for the best software engineers, managers, marketers, product managers, AEs, TAMs, and so much more!