How to Make Telework Work for your Small Business

It’s no longer uncommon to witness neighbors, colleagues and partners taking a “work from home” day.  In fact, telework practices are considered a highly desirable perk, if not a downright necessity, for today’s increasingly agile and mobile workforce. 

As a small business owner the benefits are also significant – cost-savings can be realized in abundance – from reductions in office space, to decreased absenteeism (employees no longer need to take a full day’s leave if they need to stay at home with a sick child). In some states employers can also benefit from tax credits to start or expand telework programs.

An established and functioning telework program is also an absolute lifesaver in the event of a disaster or severe weather event that limits employee mobility. Missed sales can be a significant cause of economic loss to a small business simply because employees can’t get to work to service customers.

If you are ready to consider introducing teleworking into your business practices, here are some considerations, how-to’s, and tax incentives to bear in mind:

Who Should Telework?

It’s unlikely that everyone on your team will be able to telework, so start by identifying types of positions or job types that can be performed at home practically. For example, if an employee needs to perform physical labor or operates specific equipment in the workplace not available to them at home, then that employee is clearly not a good candidate for teleworking. 

Understand your employee's needs and assess those needs in light of your knowledge of their work habits. Because (let’s face it) some employees just aren’t cut out for telework, you may wish to restrict teleworking as an option for managers and employees who can work well without constant oversight.

What about performance? Do you want to consider introducing telework as a reward for meeting certain performance goals?

Start with a Trial Period

Before you fully implement the policy, initiate a trial period and track results. Get feedback from managers and other employees as to the benefits and any challenges they are seeing. You can then fine tune and possibly expand the program to best suit everyone's needs.

How’s It Going?

Don’t be afraid to check up on employees. After all, you are putting a significant amount of trust and good faith in their ability to work from home. This doesn’t mean you need to be big brother, but you do need to know that work is still getting done to standard and on time. Set goals and follow through to ensure deliverables are still being met by those who telework.

Set Up Remote Office Tools

You don’t need to set up a company virtual private network (VPN) to help employees stay productive and connected at home. Free audio and video conferencing tools such as Skype or Google Voice can help employees stay connected for free, and online collaboration options such as Google Docs, Box.net and other file-sharing options can help ensure your employees deliver work on time and seamlessly. Many unified communication suites offer online and cloud computing options that also allow you to add Web- and mobile-based email, calendar, and collaboration functionality to your existing email service for a few extra dollars per user/per month.

Telework Tax Incentives for Employers

While your federal tax obligations do not change because your employees telecommute, certain states, including Georgia, Virginia and Oregon offer tax incentives of several thousand dollars per employee, while others offer free assistance to employers to help you start up and manage telework programs. Refer to your state government website for more information.

Tax Savings for Employees

Setting up a home office can provide some tax savings for employees in the form of home office deductions, however your employees need to be aware that the IRS is very strict when it comes to claiming this deduction. Unless you work from home 100 percent of the time, you need to provide evidence that this area of your home is used regularly and exclusively for business. Very specifically, the IRS states in its Business Use of Your Home (PDF) guide that “…if you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use.” However, in addition to standard eligibility requirements, you must:

• Use your home office for the convenience of your employer, and
• You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

“If the use of the home office is merely appropriate and helpful…” i.e. it’s your employee’s preference to work from home, not yours, they cannot deduct expenses for the business use.

 Additional Resources

• Teleworking Basics for Managers– From Telework.gov(a government employee site, but full of useful resources for business managers too).
• An Employer's Guide to Implementing Effective Commuter Choice Programs (produced by the government’s Commuter Choice program).

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