Nick Golding establishes the ground rules for employees working from home
Case Study: BT
Article in full
Last spring the Office for National Statistics announced that out of the 28.7m UK working population, 3.3m were working from the comfort of their own homes. And as flexible working grows in popularity, this figure is set to rise.
Yet employers which grant their staff the luxury of disregarding the news of a signal failure at Watford Junction or a blockage on the M25, should be aware of the tax issues and ethics that surround homeworking.
The National Group on Homeworking (NGH) campaigns for equal rights between employees that work from home and those who are office based. It believes that although travel expenses are avoided by the homeworking population, there are certain drawbacks to working from home that employers need to acknowledge, such as the need to adapt potential living space.
Nesta Holden, campaigns and policy worker at the NGH, explains: “Employers can save huge amounts on office space when their staff work from home, and homeworkers should be given contributions towards bills such as heating and lighting.”
HM Revenue and Customs (HMRC) allow employers which have staff working from home, not through choice but through necessity, to contribute to bills such as heating on a tax-free basis, subject to a cap of £2 per week, or £104 per year. Holden believes all employers should pay this sum.
“We certainly think that all employers should be paying this amount to their homeworking staff, and although they are not being forced to, it would encourage best practice,” she says.
The HMRC also allows employers to contribute to bills tax-free above the this amount but it must be a proven expense, whereas the £2 per week can be paid tax-free without approval.
Peter Thomson, director of future work forum at Henley Management School, agrees that the £104 per year is a fair amount to ask employers to pay. “£104 is fair because the argument that employees save a large amount on travel is a good one, but much must depend on the benefits that are already in place for the office-based staff. Free lunches, for instance, would be a huge benefit for some employees in the office, and this should perhaps be balanced by other benefits being made available to homeworkers.”
Clearly, some employees are more suited to homeworking than others, and it is a matter of ethics on the part of the employer to accurately assess which employees would benefit from a home-based role and which ones would not. “You cannot force an employee to work from home. It is a decision that must be taken carefully, as some sections of a staff population such as young graduates who should be in an office environment in their first job, would perhaps struggle,”
Thomson explains. Overwork Ethics and homeworking cross paths regularly, not least at the point of over and under performing. Although employers’ initial fears may lie with staff taking the opportunity to avoid work while not under their manager’s watchful eye, it is usually the opposite that causes problems.
“There are boundaries that exist in the office, such as start and finish times, but these do not appear in the home. It is easy for employees to be working all hours at home. Employers must be careful not to assume they are, and so a balance needs to be found,” Thomson says. This balance is best achieved by ensuring that line managers who are managing home-based employees are properly trained, so that they can understand the different needs of homeworkers. Inexperienced managers can get it wrong, and under-trained managers will seek to monitor and control employees who are out of sight, whereas other managers will look to empower.
“Managers can’t expect to be able to know what their employees are doing all the time, especially if they are based from home, so they have to manage by results, and trust their staff are making the right decisions,” says Thomson. Claire McCartney, senior researcher at Roffey Park, agrees that managing from a distance is based on trust from both sides, with employers trusting that homeworkers are fulfiling their duties and employees trusting that they are not being kept under constant watch by their manager. “For it to work, it is a two-way street. Once trust and flexibility is shown towards the employee, they should show it back,” she says. Employers should also have a responsibility towards the health and safety of homeworkers, and must ensure that their working environment is safe.
Some organisations avoid any possibility of breaching this duty of care by providing work furniture for employees, so the company can be sure home offices are safe and fit for their purpose.
What is more, companies that provide equipment can do so as a business expense and so will not be liable for tax. Where a company is providing the furniture, it remains the property of the company.
And, it is not just physical wellbeing employers must maintain responsibility for. They must also be alert to problems such as stress. “There is a difficulty for managers to monitor stress levels among employees based at home. Without seeing employees each day managers will not be able to spot the warning signs,” says McCartney. Yet, there can be solutions to the isolation problem, and employers should be looking, wherever possible, to encourage meetings to reiterate a sense of team among the remote workforce. “There has to be a social side to any job. Employees must be able to interact with other members of staff and feel as though they are working in a team. It is essential,” explains Holden.
Case Study: BT
BT sets up chat room It has 10,000 employees working full time from home, while a further 70,000 work between home and the office.
Increases in both retention and productivity prove that the telecommunications company’s flexible approach to work is effective, and one that the company intends to expand over the next few years.
Joanna Randell, people networks manager at BT, explains: “We have experienced a 20% increase in productivity since adopting our homeworking policy, and we also have a 98% return rate of women on maternity leave who need a flexible role.” BT keeps in line with government recommendations as far as contributions to bills are concerned, and most employees who are based at home full-time are given the £104 tax-free contribution.
“We now pay the £104 per year, and if employees can prove that they have endured extra expenditure, we will pay that too. It is usually for heating and lighting, but we also pay travel expenses for employees who are requested to come into the office from their home if they are based there full time,” she says.
But Randell admits that isolation can be a problem especially when employees are based at home full time. To overcome this, BT has worked to provide different interaction outlets for home-based staff. “Homeworkers are encouraged to communicate with each other. We have set up a chat room for employees to make this interaction easy, and regular team meetings are encouraged,” she says.
Cost criteria
Types of homeworkers
Homeworkers fall into two main groups, those who are based at home full-time, and those who have a flexible arrangement whereby they split their working time between the office and home. But, only full-time homeworkers qualify for available tax breaks should their employer contribute towards heat/light bills.
Cost
Employers should look carefully into the cost implications. Although there is an ethical obligation for a company to contribute towards bills such as heating and lighting, this can be balanced out by savings on office space. Furthermore, tax savings can be made on £2 (capped) per week in respect of contributions to bills.
Motivation
Homeworkers may feel isolated, so it is important for managers to learn to manage from a distance. Employers should not seek to monitor too closely those who work from home. They should trust and empower staff. Health and Safety Despite not being based in the office, employees working from home are still the responsibility of their employer during working hours. Employers should therefore ensure that all staff work in a safe environment. Regular checks on work space and providing approved company equipment for homeworkers can help to ensure this is carried out.
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