I’ve been working from my home office since early 2004 and have learned quite a lot about what it takes to successfully do such a thing, both as an employee and as a business owner. This post is first in a series about working from home where we’ll discuss many things to benefit not only entrepreneurs and professional bloggers, but also talk about things to help business owners put telecommuting to work for their company.
It’s been said before…
“I could never work from home, I’d never do any work.”
It’s also been said…
“I could never hire anyone for my company and let them work from home. They’d never do any work.”
Let’s put aside independent contractors and freelancers and so on for the time being and talk about why it makes sense to work from home or have your employees work from home. Here are the pros and cons:
Employees
Pros
- Stay in your pajamas all day if you like!
- Save on gas and lunches out.
- Be a “work at home parent”.
- Less distraction from others who are trying to avoid their own work by coming over and talking to you.
- Working late doesn’t seem so daunting anymore.
- Stop having to get up at 6am to shower, dress, and drive to the office for 9am. Use those three hours to do household chores, or get started on emails and such a little early.
Cons
- Less interoffice socializing can sometimes make you feel “out of the loop”.
- At-home distractions calling your name. Laundry, kids, dishes, a dirty bathtub.
- You might tend to spend too much time working, because you get engrossed in a project and since you’re at home, you have nowhere to leave from or go to.
Employers
Pros
- Less office space needed, so you can save on your lease/rent/utilities.
- Putting trust in an employee encourages them to perform even better for you.
- You can pay a little less in wages because your employees don’t have fuel or car maintenance costs.
- VPNs (Virtual Private Networks) ensure end-to-end security between your employee’s home and your network.
- Main office network goes down? Phone lines go down? Not necessarily the case at your telecommuters’ homes.
- Employees less distracted by office politics and socializing are more productive.
Cons
- No “stopping by” a cubicle to make sure your employees aren’t playing solitaire.
- Phone calls, emails, or instant messages are the only way to reach them.
- You may have to still require them to come to the office for meetings and project evaluations.
- Lack of face to face connection between employees can make it difficult for them to relate.
As you can see, the benefits do outweigh the potential problems, and it’s not a decision that anyone should take lightly. Keep reading our Telecommuting series to help discover if telecommuting is right for you or your employees.
Can you think of any other pros or cons? Let’s have a discussion…
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October 9th, 2007 at 8:33 am
Employees working for organizations outside their home states may face double taxation as a result of telework. For example, New York State maintains a rule known as the “convenience of the employer” rule. Under this rule, if a nonresident works for a New York employer and sometimes telecommutes, he may be forced to pay New York taxes, not only on the income he earns when physically working in New York, but also on the income he earns when working from home, in a different state. Because his state of residence may also tax the income he earns at home, the employee may be taxed twice simply because he telecommutes.
The rule can make telecommuting needlessly expensive. It is also especially counterproductive in New York in light of the New York City Mayor’s current interest in a federally financed congestion pricing program. If New York City and State truly want to reduce traffic - and if they want the nation to subsidize it - the State should be encouraging telework, not penalizing people for doing it.
There is proposed legislation currently pending in Congress that would prohibit New York - and all other states - from double taxing nonresident telecommuters. The bill is called the Telecommuter Tax Fairness Act. To help the nation use telework to reduce traffic, fuel consumption, air pollution and greenhouse gas emissions, Congress should pass this bill. Lawmakers from states across the country should actively support the bill to enable more of their constituents to use this highly eco-friendly commute option.
October 9th, 2007 at 10:02 am
Nicole - Thank you so much for the enlightenment on this issue!
Personally, I’ve never had that issue because when I did telecommute, it was for another New York State business. However I was regarded as a full time employee of the company, as opposed to being an independent contractor or freelancer.
I think sometimes it might be more beneficial in a situation where there are state borders involved (at least until that bill you mentioned is passed) that employers and employees consider going the route of considering independent contractors for telecommuting positions.
In that instance, the employer is not responsible for ensuring that taxes be taken from the paycheck, but rather it’s completely on the head of the IC to manage their own tax payments and deductions. In that train of thought, any monies received by the employer are to be considered official “income” be it in the form of a computer or other office equipment, the payment of phone bills, etc. That’s all taxable income.
Thanks again for the info Nicole - that’s really important for people to consider right now!
February 6th, 2008 at 3:58 pm
Your informartion is very much appreciated.