What are remote work stipends?

Last updated on 
August 24, 2020

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One of the biggest perks of remote work for companies is its perceived cheapness. Many businesses approach it as an opportunity to cut costs – to reign in expensive office rent, furniture, bills, supplies and maintenance. But the remote work model doesn’t come entirely for free, and failure to recognize its costs just shifts operational expenses to employees

As more companies look to develop remote work offerings post-lockdown, they need to acknowledge the hidden costs of distributed working and create tangible solutions to cover them – understanding that corporate responsibility extends to wherever employees are working. Remote work stipends are a great place to start. But what should you offer and why should you offer them?

The hidden costs of remote work

When you examine the overall cost of remote work, it might seem like it’d be considerably less than heading to the office – after all, you don’t have to pay fuel, train or bus costs, and you can wear whatever old clothes you have lying around at home. But successful remote work relies on other factors. Other than a laptop and phone, you need high-speed internet, you need a desk and (comfy) chair, and you need to have access to a suitable working environment. As a remote worker, you suddenly lose out on other “softer expenses”, like company-bought coffee, snacks, and lunch (the latter is paid by employers in many Nordic countries). There’s also the issue of the portion of electricity and heating bills that go entirely towards working for your employer – who pays for those?

If you’re lucky enough to already have a spare room set up as a study, great – but what if you don’t? As many of us now know, working from your couch gets old fast. If your laptop is too slow and you need to buy a new one, who pays for it? If your internet isn’t fast enough, who forks out for an upgrade? If you need to turn a spare bedroom into an office, who pays for a new desk and chair? If you’re unable to work from home, who pays for a co-working space? Most of us would agree that expecting employees to shoulder the costs of working from home is wrong – and this is the precise reason why many people are talking about remote work stipends right now.

What are remote work stipends for?

Remote work stipends are sums of money given to employees to improve their working situation. These can be used to buy new office equipment, like ergonomically designed chairs, or a new laptop. They can be used to buy food, coffee, or anything else you need to make sure you stay productive and comfortable. You can use these stipends to pay for a coworking space, or for a more expensive, but faster, internet connection at home. These stipends can be paid monthly, along with a salary, or given out as a one-time payment.

Since the pandemic hit and millions began working from home, remote work stipends have become increasingly prevalent. In May, Google paid their employees $1,000 to set up or improve their home office, and Twitter quickly followed suit; they weren’t the first companies to pay out, though, as back in March Shopify gave their workers $1,000 for office supplies, furniture and equipment. While it was generally agreed that these stipends were a good idea, many also saw them as “The tech industry’s new perk”. But others would argue that remote work stipends, like remote work itself, should not be considered a benefit, or a reward, or a bonus, but as a basic employee right.

Do you need to offer remote stipends?

Too often, companies treat remote work as an employee perk, or an opportunity to cut business costs. The truth is that remote working benefits companies just as much as it does employees. “We looked at the cost savings from office maintenance, snacks and travel during this time and we repurposed it back towards a $500 stipend,” says Marco Osso, VP of employment success at mobile retail platform app Tulip. “We provide quite a few employee perks in the office. So there are significant savings.”

Rather than simply pocketing the savings made from remote work, ethical companies understand that their most important assets are their people – and it’s in their interest to look after them. At the start of this year, many people weren’t sure if working from home would be a long-term solution – but now that it seems it is, more and more companies are realizing that if they want their employees to be as productive and happy as they were before, they will have to fork out.

While remote employees can’t expect stipends for everything – allowances for “non-essential” work equipment are given entirely at an employer’s discretion – certain operational costs should certainly be covered by their companies. Rightful compensation for incurred business expenses is not something employees should have to trade for the “desirable” opportunity to work from home; it’s a basic right.  

Corporate responsibility and remote work

As remote working continues to rise, more remote work stipends will be paid out. Just taking the lockdown remote work experiment as an example, while many companies offered to pay for their employees’ internet and phone bills at the start, many have quickly expanded their policies to cover the costs of computers, desks, chairs and other home office essentials.

Some experts believe that the issue of stipends could soon become a legal one. While many countries and US states are already legally required to pay workers back for certain expenses, there may be new arguments over what expenses employees should cover; in May, Switzerland’s top court ruled that employers are required to contribute to employees’ rent if they’re expected to work from home.

While some might say that’s a step too far, almost everyone can agree that remote work stipends are a necessity. They are an essential response to the idea of “individualization of risk” – an insidious, decades-long shift transferring work risks and costs from institutions to individuals. Crucially, they aren’t just about ensuring employees can work from home productively; they make sure employees are comfortable and happy doing so too. Beyond that, remote work stipends are about showing support and appreciation. Receiving benefits and financial support from your employer can go a long way in feeling trusted and recognized – and when you get that support, you want to reciprocate.

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