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What is the Proposed Work-From-Home Tax?

What is the Proposed Work-From-Home Tax?

With employees forced to work from home in early March, there was no choice other than to quickly adapt to the new normal. Months later, as cases have surged across the United States, many workforces are still working from home. As employers start to discuss what the future holds for working from home, a London-based researcher at Deutsche Bank proposed a heavily-debated work-from-home tax for employees who work remotely after it’s deemed safe to return to the office. Read on for more details on the story and how it would impact remote workforces.

 

What’s the Story?

Luke Templeton, a London-based researcher at Deutsche Bank, proposed a 5% work-from-home tax for employees who work remotely after it’s deemed safe to return to the office. 

The article, which has sparked conversation arguing for both sides, was part of a larger report by Deutsche Bank called What We Must Do to Rebuild. In it, Templeton proposes, "The tax itself will be paid by the employer if it does not provide a worker with a permanent desk. If it does, and the staff member chooses to work from home, the employee will pay the tax out of their salary for each day they work from home." This excludes workers who are low-income and self-employed. 

The rationale behind the tax is that working from home is financially rewarding and remote workers are contributing to the economy less since they aren’t commuting or buying lunch while working at the office.

 

How Would This Impact Employers and Their Teams?

Before the COVID-19 outbreak, some companies viewed remote work as a rarity, used only as a last resort, or even as a reward. Besides the obvious necessity--keeping employees safe and healthy during a global pandemic--there are other advantages to remote work that makes this tax unfavorable for employers.

A partner at McKinsey & Co. recently argued that the pandemic has led to more collaborative, adaptive employees, while gaining knowledge in virtual tools such as videoconferencing and soft skills like flexibility. The option to work from home also helps accommodate for employees with disabilities and chronic illness, according to HR Dive

While the tax isn’t likely to gain traction--it is just a proposal, after all--it’s important for employers to consider how to best support their remote workforces and help them remain productive and healthy during this ongoing, unprecedented time.

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