If there was any novelty to the kitchen offices, dining table desks and bedroom workstations that sprang up or were screwed together in haste as the coronavirus crisis unfolded, it will for many have worn off by now.
The economy is in the first phase of its reopening and some employees have already ventured back to the office. Others, however, will be wondering if they will ever get back to their old place of work, how many days a week they will spend there if they do, and what it means if they never go through that revolving door again.
"The workplaces that we had eight weeks ago, they are gone for ever. They are not going to return. We have suddenly moved from the 19th-century model to a 21st-century one, and we are skipping a whole 100 years," says Richard Grogan, employment law expert at Grogan Solicitors.
Even in the fifth stage of the Government’s lockdown exit plan, due to begin on August 10th, the official advice is that “remote working continues for all that can do so”.
"I do think we're a long way off normality right now," says Christine Keily, tax director at taxback.com.
The consequences for our energy bills alone may leave even enthusiastic remote workers longing for their old commute
Social-distancing requirements, employees’ inability to find childcare places and employers eyeing the break clauses in their office leases could all usher in a new semi-permanent era of working from home, pushing into focus a range of finance, health and safety, career and employment law issues.
The consequences for our energy bills alone may leave even enthusiastic remote workers longing for their old commute.
You may have heard talk of a payment of €3.20 a day to cover home expenses. Alas, this is not a tax credit that working-from-home employees can claim from Revenue, but a sum employers can choose to pay “e-workers” per working day to cover their expenses. They can make this payment to their staff without having to deduct PAYE, PRSI or the Universal Social Charge.
The problem for employees is that not many employers are doing so.
“I don’t get the feeling that they are paying it,” says Keily. “Employers are being quite cautious as it is still early days and there is a lot of uncertainty out there.”
Workers can tot up their utility bills for days spent working from home and claim tax relief on it – well, some of it. Revenue permits only 10 per cent of allowable utility expenses (heating, electricity and broadband) to be eligible for tax relief.
So how does it work? Keily gives the example of an employee who has combined heating, electricity and broadband bills of €2,000 in 2020, a year in which they officially work from home for 80 days. The two figures are multiplied, then divided by the number of the days in the year (which for this leap year is 366). This gives a sum of €437.
But because Revenue says this expense also relates to personal use, even on workdays, it allows only 10 per cent of the bills relating to those days to be eligible for tax relief, or €43.70 in this case.
If the employee’s marginal rate of tax is 40 per cent, he or she will then receive €17.48 into their pocket, while a lower earner whose maximum rate is 20 per cent will receive €8.74 for that 80-workday period (16 weeks for someone working five days a week).
There is no relief from PRSI or USC in this instance, and the 10 per cent rule applies regardless of how many rooms are in the house or how many people live there.
And these measures apply only to formal e-working arrangements, not cases where office staff end up doing extra work at home outside normal working hours.
If employers decided to pay the allowance of €3.20 per workday, it would make a difference, notes Keily
The small sums involved here will worry people who find they are still working from home when winter comes and they need to turn the heat on during the day where once they might have left it off until the evening. It is not hard to envisage energy bills swelling by considerably more than the Revenue figure of 10 per cent.
If employers decided to pay the allowance of €3.20 per workday, it would make a difference, notes Keily. Over 80 working days, as in the example above, the worker would have €256 to cover their utility expenses, regardless of expenditure. That’s clearly a lot better than anything that could be claimed in tax relief.
And if the worker’s heating, lighting and broadband costs are higher than €3.20 per workday, one of two things can happen: the employer may choose to cover the rest of the cost, but will have to deduct tax, or the employee can claim tax relief on the balance.
Check for deals
If you have been with the same energy providers for years, 2020 will be a good year to check if there are better deals out there that will help keep bills down.
But what will also be dawning on many people thrust into the world of working from home is that neither employer HR policies nor government measures have caught up with the implications of the office exodus.
The tax treatment of home-working expenses described above existed before the pandemic, but the explosion of e-workers since then is shining a fresh light on their adequacy.
It would be “helpful”, says Keily, if the Government increased the payment employers can make without deducting PAYE, PRSI or USC above the current €3.20 per workday rate. “But the employer still needs to be able to afford to pay it.”
Keep a record of your utility bills, while you may also need a letter from your employer to confirm the number of days that you were working from home
The earliest tax relief can be claimed for 2020 is January 2021. Despite the modest sums, next January could see PAYE workers who might not normally fill out an annual tax return taking the plunge. And while they are signed into the Revenue’s online MyAccount system obtaining relief for home-working expenses, they might remember to claim any eligible medical expenses or other common tax reliefs too.
“January is the time when it will all kick off, and that’s when people will be feeling the pinch,” says Keily.
The important thing to do between now and then is keep a record of your utility bills, while you may also need a letter from your employer to confirm the number of days that you were working from home. As with other tax reliefs, you can make claims for the four previous tax years.
As far as “home offices” are concerned, your employer should by rights supply any equipment you need to do your job, which in an office situation means a laptop or home computer, software, a desk and chair. Certain employees will also require stationery, printers, scanners and other technical apparatus. Such items provided by an employer for business use do not count as a taxable benefit in kind – it would be galling if they did.
Grogan believes that to prevent job losses, home office set-up costs should be allowed as a tax-deductible expense at a rate of 100 per cent in year one
But the provision of the necessary equipment to their network of dispersed workers comes at such a “significant cost” to employers that it actually might deter some from keeping staff on, says Grogan, who thinks politicians need to shake off “ostrich syndrome” and talk to small companies.
The bind for small firms isn’t helped by the fact that, as a form of capital expenditure, companies can only claim office equipment expenses as a capital allowance at a rate of 12.5 per cent over eight years. Grogan believes that to prevent job losses, home office set-up costs should be allowed as a tax-deductible expense at a rate of 100 per cent in year one.
“The Revenue will say this isn’t the way we do things, but we haven’t had to deal with this before,” he says. “The cost of home working needs to be facilitated by the Government. Every job that can be saved is going to put money back into the exchequer.”
Health and safety
Back in mid-March, when employers were racing to catch up with the speed of events, employees may have dusted off or assembled makeshift home workspaces that were fine in an emergency or on a temporary basis, but less than adequate for the medium to long term.
“Kitchen chairs aren’t really meant to be used for working at laptops all day,” says Keily.
Employers who don’t pay sufficient attention to the health-and-safety aspects of home working put themselves at risk of personal injury claims, according to Grogan. If they are unable to go into the homes of their workers to check on the ergonomics of their set-ups, they may request that staff who remain outside the office send in pictures of their workspaces.
Other disputes could centre on the health damage caused by excessive working. Employers should have instructed home workers to take breaks as they normally would in the office, but that doesn’t absolve them of all responsibility, says Grogan. “The burden of proof is on the employer to comply with the Organisation of Working Time Act.”
It is a pertinent issue, given the repeated findings that people tend to put in longer work hours at home than they would in the office, with lines between home and work life comprehensively blurred.
Indeed, in one survey by LinkedIn of 2,000 people, Irish people working from home reported putting in as much as 38 hours extra per month – the equivalent of an extra week’s work – due to the current arrangements.
Another point of concern for remote workers and employment experts alike is the chance of lasting inequality between employees who can return to the physical place of work, or are permitted to do so, and their colleagues who either can’t or are told they must stay at home. Such a two-tier workplace could exacerbate sexism, ageism and ableism.
While he doesn’t want to uphold the gender division of labour, Grogan says the reality is that the likely reduction in creche capacity and “a serious issue” about how the school year will function from September is going to have a detrimental impact on mothers in particular.
“I have not received one phone call from a man with concerns about going back to work in the absence of childcare. I have received many such phone calls from women,” he says.
Some employers are also worried, “to be fair”, about their ability to retain valued staff, though others are keen to shift to only full-time positions, “which will cut out a huge number of people” from the workforce. It’s an issue that should be attracting greater political attention, he says.
As heavy as this weighs on both household finances and morale, clear-cut resolutions aren't readily available for some of the issues now cropping up
We are yet to perhaps fully grasp the knock to earnings prospects faced by workers who keep their jobs, but feel increasingly “divorced” from the workplace.
"You are now going to have invisible employees," says Grogan. "You may meet them on a Zoom or Microsoft Teams call, but if there's a meeting in the boardroom, they're not going to be there. There could certainly be an issue when it comes to promotions and moving on."
As heavily as this weighs on both household finances and morale, clear-cut resolutions aren’t readily available for some of the issues now cropping up, Grogan warns. Some are simply unique to this pandemic.
“We don’t know what a lot of the answers are, because the law has never thought about this.”