Employers May Be Responsible for the “Hidden” Cost of Employees Working from Home

Cameron Baker, Associate Attorney

At the onset of the COVID-19 pandemic, federal, state, and local government ordinances required certain companies to have employees work from home. As COVID-19 infection numbers decreased and COVID-19 vaccinations became more available, some employers called their remote-working employees back to the office. Other employers, at times responding to their employees’ requests, allowed their employees to continue working from home. The company benefit of providing flexibility for employees working from home, however, may require employers in certain states to pay the hidden cost of working from home, such as increased costs associated with the employee’s internet service, mobile telephone, and electricity.[1]

Amazon is the latest company to face a class action lawsuit from employees seeking reimbursement from costs borne out of remote work.[2] The employees claim Amazon violated the California statute which provides for business expense reimbursement for certain expenses incidental to employment. Cal. Lab. Code § 2804. Amazon argues it is not responsible for paying the costs associated with remote work because its employees were simply following the government’s stay at home orders, and claims Amazon had no legal obligation to reimburse employees for costs when the expenses were caused by the actions of the government. The federal judge denied Amazon’s attempt to dismiss the lawsuit, stating that businesses may be liable when the expenses were incurred within the scope of employment and were a direct result of the employee’s discharge of duties for the employer.  

Whether employers should pay for the costs associated with working from home has become a prevalent issue amidst the COVID-19 pandemic, as employers are faced with the decision of continuing to allow employees work at home, or calling them back into the office. Although Colorado does not yet have a similar law to that in California, Colorado employers should consider the potential cost of prospective reimbursement for employees working from home in the future, as this idea gains popularity across the country.[3]

[1]Reba Letsa, Does Your State Require Employers to Foot the Bill for Employees’ Remote Work Expenses? https://www.jdsupra.com/legalnews/does-your-state-require-employers-to-3053571/

[2] See Williams v. Amazon.com Servs. LLC, No. 22-CV-01892-VC, 2022 WL 1769124 (N.D. Cal. June 1, 2022).

[3] Patrick Lucas Austin, Working From Home Is Driving Up Our Energy Costs. Should Employers Foot the Bill? https://time.com/5935050/remote-work-energy-bill/