In recent weeks, a Switzerland Supreme Court decision
has been hotly debated, not only in Switzerland. The court had ruled that if an
employee was required to work from home, his company must pay a share of his
rent. In that particular case, it was determined as $150 per month. The verdict was given on 23 April 2019. But the judgment has become very relevant now.
This compensation is comparable to an employer
reimbursing business-related expenses incurred on an employee’s personal car or
phone. Currently, many employees are happy saving on the commute, in some jobs
productivity has gone up; introvert workers are enjoying working solo. This is
the first major pandemic where working without leaving the house is possible. Are
the employers taking over the workers’ living spaces without compensating them?
Andy Merrifield calls this parasitic capitalism, where companies are trying to
increase corporate profits by squeezing the public and employees, rather than
generating new value.
Companies like Shopify
have announced their workforce will work from home even after the pandemic. It
is estimated the company will save $10,000 per employee per annum by converting
his bedroom/kitchen into office space.
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If it’s remote work anyway, why should the worker live
in an expensive town? He can move to a cheap city, or rent a shack on the
beach.
Mark Zuckerburg, being Mark Zuckerburg, has warned
that if a Facebook employee moves to a cheaper location, his salary will be
proportionately reduced. Salaries have a relationship with the cost of living. Employees
are asked to notify FB by 1 Jan. 2021 about any change of residence. Zuckerberg
has asked them to be honest about it. (Even if they are not, surely he can
easily trace their location.)
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Work from home was thrust unexpectedly this time. Many unprepared employees
are working at their kitchen table, or in bed. In future, if it becomes the
norm, an employee may need to rent or buy a house with an extra bedroom. The
office space at home needs to be maintained, heated or air-conditioned, made
soundproof. In a survey, employees mentioned their top three requirements:
ergonomic chair, dual monitor and faster wifi. This is followed by a long list:
Standing desk, office equipment, food allowance, garden office, childcare and
noise-cancelling headphones.
Australian tax authorities have come up with a short-cut
calculation. Australian employees are allowed to claim 80 cents for each hour
they work from home between March and July 2020.
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Co-working space near the employee’s house is an
interesting compromise. A residential building can have office space in the
lobby or a particular floor. Residents can rent a desk for their remote work. That
way they avoid home distractions, save on the commute, and still be among
people who work for their respective companies. Such co-working happens quietly
in a Starbucks or McDonalds, where buying a cup of coffee or a hamburger gets
you a working space, wifi and air-conditioning. On their laptops the salesmen
sell, the traders operate the stock market; analysts prepare and dispatch their
reports.
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Rents in San Francisco have started falling. What
happens if companies move a large chunk of work to their employees’ homes? The
commercial real estate will crash. Buying a house in California requires a good
ten years’ salary for a well paid executive. Why live in California if you are
working from home?
The pandemic promises a real upheaval in the real
estate market over the next ten years.
Ravi