Updating reimbursement and expense policies with your remote workforce in mind

The COVID pandemic, coupled with a national labor shortage, has found many not-for-profit (NFP) organizations shifting their employment strategies. In many ways, this has allowed for creative solutions and expanded the potential workforce to allow organizations to find employees to best execute their mission.

The use of technology has allowed teams to stay connected without being in the same physical location and fill open employment roles from a wider net of potential employees. However, this also means many NFPs are now managing employees in a mixture of remote, hybrid and traditional employment structures.

Does your reimbursement policy address the variants between remote workers?

These new solutions can cause concern and inconsistent application when it comes to expense reimbursement. With a workforce model that is all homogenous, an employer can use a standard expense reimbursement policy and generally a ‘one size fits all’ for reimbursement. But with employees who might live in different areas of the country or perhaps don’t have access to the same resources, these policies become concerning and employers struggle with how to best address them.

Do employers need to reimburse remote employees?

According to federal law, you do not need to reimburse remote employees for work-related expenses unless those expenses cause their earnings to fall below:

• The federal minimum wage of $7.25/hour for non-exempt employees, or
• The salary threshold of $684/week for exempt employees

For example, a large one-time purchase (like a printer) could easily reduce someone’s wages.

It is also crucial for an employer to consider individual state requirements. Many states have very specific laws related to employee expense reimbursement. California, for example, requires reimbursement for cell phone usage, air conditioning and other stipulations that employers need to be aware of.

It is recommended to carefully track remote employees’ expenses to ensure they don’t fall below the Federal minimum wage or salary threshold and that state requirements are being met.

Best practices for reimbursing remote employees

First and foremost, understand the difference between necessary and unnecessary expenses.