[Real Beat] "Pay for Remote Work Costs!", Employee vs Company Conflict [Office Shift] (21)

'Clash' Over Indirect Costs Like Internet and Electricity Fees
Amazon Employee Class Action Lawsuit, Countries Establishing Regulations

Editor's Note[Jjinbit] is short for 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in the changing nature of work. The segment within Jjinbit called 'Office Shift' carefully examines changes in offices triggered by the COVID-19 pandemic and aims to lay the groundwork for exploring answers to new work styles through experiments we have experienced together. It will be delivered to you every Saturday and Sunday morning. After 40 installments, it will also be available as a book.

Bevi, a U.S. digital water purifier startup, can quickly check how many employees from over 5,000 client companies have returned to the office. This is because the amount of water consumed through Bevi's water purifiers can be used to estimate occupancy. When employees come to the office, they naturally drink water and gather near the water purifier to chat. Sean Grundy, Bevi's founder, revealed in an interview with Bloomberg last month that hedge funds and market investors interested in office occupancy trends contacted him to request related data.

When people stay in a specific space, they use something. It is natural that companies incur direct and indirect costs when operating offices. In addition to rent, basic infrastructure costs include water consumption, electricity, gas, and internet fees used in restrooms. Furniture such as desks, chairs, laptops, as well as beverages and snacks, are all accounted for as expenses. Cooling and heating costs are enormous in summer and winter. If there is a cafeteria, the cost of 'free meals' is also significant.

(Photo by Bevi on Instagram)

If employees work from home, who should bear these costs? The experiments with work arrangements during the COVID-19 pandemic made it clear that operating an office involves substantial expenses. From the employees' perspective, these costs, which the company usually covers, became a burden when working from home. Early in the pandemic, employees pointed out that "the company is renting my home for business" and demanded compensation for these costs. From the company's perspective, although office operating costs may have decreased due to reduced use of furniture and other items, new expenses were incurred to build IT infrastructure, and office rent had to be paid for the contract period. The calculations around work-from-home arrangements became complicated for both companies and employees.

◆ "Pay for Internet Usage" ? A Lawsuit Dragging On for Two Years

Last month, a lawsuit related to Amazon, the world's largest e-commerce company, drew attention from foreign media in a California court. David Williams, an Amazon engineer, sued the company claiming that during the pandemic, the company did not sufficiently reimburse his personal internet and phone expenses incurred while working from home. Williams filed the lawsuit alone in 2021, and last year other employees joined, expanding it into a class-action suit. About 7,000 Amazon employees participated in this lawsuit.

What was the outcome? According to reports from Bloomberg and other foreign media, the California court dismissed Williams' lawsuit. Among the 7,000 participants, about 600 received an average of $66 from the company, and some were fully reimbursed. The court explained that it was difficult to accept the claim since not all plaintiffs made the same argument.

However, the court left room for the lawsuit to be refiled with improved content, noting some defects in the current case. The court also rejected Amazon's claim that it had no obligation to reimburse costs because the work-from-home order was issued by local authorities to prevent COVID-19 spread. This suggests that the obligation of companies to reimburse costs related to work-from-home may be contested again.

Williams' side expressed their intention to refile the lawsuit excluding those who were reimbursed adequately, noting that less than 10% of participants received sufficient compensation. This major lawsuit to recover internet usage fees has been ongoing for two years since the start of the COVID-19 pandemic. It is truly a 'showdown' over who should bear the costs of working from home.

◆ How Far Should Work-From-Home Support Go?

When large-scale work-from-home arrangements began suddenly in 2020 due to COVID-19, support was needed to help employees set up appropriate work environments at home for smooth operations. Some large companies provided support during that period. They covered initial costs for equipment and infrastructure such as laptops, monitors, and chairs, or ongoing maintenance costs like electricity and internet fees incurred during work.

Google, relatively early in May 2020, provided $1,000 for initial costs to purchase necessary equipment and furniture. In Korea, Woowa Brothers, operator of Baedal Minjok, made headlines in December 2021 by gifting about 1,700 employees one of the following: the 'Chanel of chairs' Herman Miller chairs, electric desks, or ultra-high-resolution monitors. SK Telecom also provided 400,000 mileage points (equivalent to about 400,000 KRW) as IT work support funds in early COVID-19 to purchase laptops and other equipment.

Some companies went further by starting to pay maintenance costs. These were generally companies positive about adopting work-from-home. Japan's NTT Group, expanding remote work in 2020, began paying water and communication fees that were not previously provided, and in July 2022, removed residence restrictions and decided to support commuting costs without limits when employees come to the office.

In Korea, Woowa Brothers started paying a monthly support fund of 100,000 KRW to all employees due to COVID-19 and continues to do so. From this year, they implemented a 'workplace autonomy system,' allowing all employees to work anywhere, such as the company or home, but the so-called 'work-from-home support fund' is still paid to everyone.

Naver, which maintains a work-from-home policy, provides employees with 300,000 KRW monthly support. It can be used anywhere needed for working from home. Naver's affiliate Line Plus announced in July last year that it would officially implement the 'Hybrid Work 2.0' system and provide cash-equivalent points worth about 170,000 KRW monthly.

SK Telecom continues to provide the IT work support fund given at the start of COVID-19. Since 2021, it has provided 50,000 mileage points quarterly, totaling 200,000 annually. Although it limited work-from-home to once a week from February, it maintains the 'Work From Anywhere' policy by actively utilizing base offices, which is interpreted as continuing to provide IT equipment costs.

A deputy general manager A at a major Korean IT company said, "It started as work-from-home support, but it is a support fund given to maintain productivity and achieve good results regardless of where you work. Suddenly stopping the support fund would lower employee morale and cause backlash. Now, work-from-home support funds should be considered a form of welfare."

In fact, companies with well-established support systems like this are not common. According to a survey by the Korea Labor Institute from July to September 2021 targeting 620 domestic companies implementing work-from-home, 77.6% responded that they provided PCs such as laptops, followed by office equipment and supplies (31.5%), internet usage fees (16.3%), and indirect costs like electricity (15.8%). Most focus on providing PCs for work, and it is difficult in reality to demand internet or electricity fees from companies.

◆ What Are the Regulations in Various Countries on Employer Reimbursement?

As many companies adopted work-from-home during COVID-19, governments worldwide created legal regulations or manuals regarding cost issues. Although some global companies have started reducing work-from-home this year, many still adopt it, so discussions on cost issues are expected to continue for some time. Cases requiring dialogue and agreement to find solutions will likely arise occasionally.

MIT Sloan Business Review reported in February, "Regulations related to work-from-home are being created, but companies are unprepared," and "As costs to comply with work-from-home regulations increase, more employers may try to bring employees back to the office."

The International Labour Organization (ILO) stated in a 2020 manual, "Usually, there are no laws or regulations regarding reimbursement of work-from-home costs, but during the pandemic, even without legal grounds or direct government demands, employers should reimburse reasonable and necessary costs." Costs to be reimbursed include communication fees, internet usage fees, personal computers, and tablets. However, additional items for employee convenience such as extra computer monitors, ergonomic chairs, and printers are not necessarily mandatory to support.

According to the National Assembly Legislative Research Office's report 'Study on Overseas Legislation and Policy Cases Regarding Work-From-Home,' France already regulated cost issues in the 2005 national agreement on work-from-home. Communication-related costs must be borne by the company, and appropriate technical support services must be provided to teleworkers. Germany recommends that employers provide necessary tools such as computers, printers, desks, and chairs for 'home office workplaces,' and employees have the right to claim costs for these.

Spain enacted the 'Emergency Legislation on Remote Work' in September 2020, stipulating that companies must determine the amount to bear for equipment, consumables, and other costs necessary for work-from-home.

In Korea, the Ministry of Employment and Labor created a comprehensive manual in September 2020 outlining procedures, management plans, and expected legal issues when implementing work-from-home. According to the manual, additional costs incurred due to work-from-home should, in principle, be borne by the company. There is no need to provide transportation or meal expenses to teleworkers, but additional communication fees and consumables should be borne by the employer. However, since it is difficult to realistically distinguish between work and private use of electricity and communication fees, it is suggested to consider paying a fixed amount as a work-from-home allowance for actual cost reimbursement.