As we look to the future of work, John Cradden examines the financial and legal implications of remote and hybrid working for SMEs
The recent pushback from big corporate employers such as Amazon and Tesla against staff working from home might have prompted a bit of soul-searching among some companies about their approaches to flexible working.
However, there’s no doubting that remote and hybrid working is here to stay. According to a recent survey by recruitment firm Hays Ireland, three-quarters of companies here intend to retain their hybrid working models over the next year, while more than half of workers are still opting for roles that offer hybrid or fully remote roles.
“More useful questions for many firms, particularly SMEs, should centre on how they should embrace flexible working in a way that is balanced fairly between office and home working”
Research by UCC Business School suggests that smaller firms (i.e. fewer than 50 employees) have a significantly higher proportion of employees who don’t work from home at all, but around 25 to 30% of small firms still do.
So perhaps more useful questions for many firms, particularly SMEs, should centre on how they should embrace flexible working in a way that is balanced fairly between office and home working.
How might the potential cost savings for businesses in reduced office space requirements compare with the expenses of making your firm more ‘remote-friendly’ in terms of equipment, technology and HR policy? What are the legal and regulatory issues to bear in mind, including the new ‘right to request’ remote working that came into force earlier in 2024?
Cost savings
A 2022 report by the Irish Government Economic and Evaluation Service (IGEES) found that firms could make savings of nearly €1,500 per employee per year if they downscaled expensive city centre offices.
Certainly one factor that may strongly influence the extent to which some firms will embrace remote working is whether or not they own of their offices or premises. A small start-up that rents or leases may have more flexibility to scale their office space up or down according to demand or need, while others that own their own buildings may prefer to insist that most or all staff are office-based.
Separately, the IGEES report cited past studies that suggested remote working could deliver productivity boosts of up to 22% in some sectors thanks to the reduced time that workers spend commuting, but added that it may reduce it in others. As a result, “individual firms and workers must make decisions as to whether they believe they are more productive working remotely”, but concluded that the overall benefits of remote working are likely to outweigh the costs.
Facilitating remote working can not only boost employee wellbeing and productivity, but also help attract and retain top talent, which in turn can reduce employee turnover and the time and costs of recruitment.
Potential expenses
In terms of technology and equipment, it’s regarded as good practice that employers should compensate workers for a reasonable amount of the costs of electricity, heat and broadband required to complete their work while at home.
The good news is employers can pay remote workers a working-from-home allowance of up to €3.20 a day without deducting income tax, PRSI or USC. If costs are higher than this, then any amounts higher than €3.20 a day will be taxed. Employers are not legally required to provide this allowance, and workers can claim the tax relief themselves from Revenue, but providing the allowance ensures all remote or hybrid workers get the benefit and avoids the hassle of claiming the relief.
You will likely need to provide a computer, a printer, scanner and office furniture to enable your employees to work from home, but there are no benefit-in-kind charges on these items.
In terms of HR policy, it’s strongly advised that all firms should detail and document their policies on flexible working to reduce the risks of non-compliance, provide clarity and enable companies to attract and manage talent. According to GrowRemote, an organisation that supports employers in facilitating flexible working, three-quarters of firms have not yet finalised their remote working policies.
The policy should outline the company’s approach to remote working, and clarify what model they have adopted (eg. fully remote, remote-first or remote friendly). It should detail any rules around office access, working hours, what workers need to work from home, security and data protection, health and safety and a relocation or mobility policy.
Right to request remote working
Earlier this year, new legislation came into force that gave workers the right to request remote work.
On the face of it, the law means that when a worker asks to work remotely, a company must show that it has “seriously considered” the request. If an employee feels their request has not been considered properly, they can take a case to the Workplace Relations Commission (WRC), the state’s labour dispute body.
However, the first case taken before the Workplace Relations Commission against Tik Tok has revealed big limitations in the law as far as employees are concerned. In a nutshell, the law requires the employer to demonstrate that it has following the correct right to request process, but then leaves it free to deny any flexible working arrangement it doesn’t want as the WRC has no power to assess the merits of the employer’s decision – only whether or not the company has properly followed the process.
The case showed that the right under the act is about requesting remote work, rather than a right to remote work itself.
Useful resources:
Grow Remote has a publication called The Remote Playbook for SMEs, which is designed especially for small and medium-sized enterprises. It contains practical guidance and insights gathered directly from some of Ireland’s leading remote-first companies.
The Department of Enterprise, Trade and Employment has a range of useful resources offering guidance to companies looking to implement remote working.
The Health and Safety Authority (HSA) has a guide for employers about making home working as safe as possible, including hazards to watch out for and guidance on ergonomics.
Main image at top: Photo by Luca Bravo on Unsplash
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