Californians: Would you support this Remote Work Law?
Here are the salient features of the law aimed at addressing the affordability crisis in the Bay Area and the eroding tech middle class:
1) Any white-collar worker who requests to work from home must be allowed to do so by their employer, as long as “home” is located anywhere in California
2) Employers that object to the request must present a thorough “business hardship justification” exemption in front of the California Labor Board
3) The employer may lower the employee’s salary to match the lower cost of living in the alternative California locale, and the employee can either accept the lower salary, or cancel the request to work from home
4) Once designated as work-from-home, an employer cannot ask an employee to come to the workplace more than once a week. The only exception to this rule is if there are a series of designated multi-team meetings that necessitate more than one day for face-to-face collaboration. The employer must also bear all costs of transporting the employee, and providing them with room and board. The employer also cannot force the employee to drive – the employer must either fly the employee in, or let the employee take a taxi.
5) Employees who are interviewing for a new position with a new employer can request that their role be designated as “work-from-home”. At this point in time, the employer can ask for the prospective employee’s home location, and appropriately adjust the salary commensurate with that location’s cost of living.
6) Companies with less than 20 employees are exempt from this law but can still take advantage of it, if they choose
7) As an added incentive, employers who hire work-from-home employees will also receive tax breaks as follows:
a. The difference between the unemployment rate in the work-from-home county and the employer’s main headquarters in California will be offered as a tax break
b. The amount of the tax break will be calculated as follows: average differential between HQ and employee’s home county for the fiscal year.
8) Example of (7). Assume 3 employees for Company A are designated as remote, and that Company Alpha is located in San Mateo County with a 2.8% unemployment rate. Employee 1 is located in Orange County with a 3.7% unemployment rate, Employee 2 is located in Santa Barbara County with a 4.7% unemployment rate, and Employee 3 is located in San Diego with a 4.3%. The differentials for all 3 remote employees between their home counties and headquarters would be 0.9%, 1.9%, and 1.5% respectively, which on average come out to 1.43%. Therefore, Company Alpha can expect a tax break of 1.43% for their fiscal year. Please note: if the work-from home employee lives in a County with a lower unemployment rate than HQ, then that differential will not be included in the calculations and will be considered a zero differential.
9) To make use of the tax break, at least 25% of the company’s Californian employees must be designated as work-from-home.
10) This law only applies to white-collar workers. The definition of a white-collar worker means any “knowledge worker” who performs the majority of his/her work in front of a computer or smartphone.