COVID-19 Germany: Working From Home and Employer Reimbursement of Remote-Work Expenses


Due to the pandemic-related increase in remote work, questions come up who will end up bearing additional costs – such as increased electricity costs and expenses for cell phone and internet plan. There is also a need for clarification regarding occupational health and safety when working remotely.

Remote Work Expenses Must Be Reimbursed if Considered Necessary

Expenses incurred by the employee, for which the employer and employee have not reached a specific agreement, must be reimbursed only under rather strict conditions. In any case, it is required that the employee might deem the expenditure necessary and that it was in the employer's overriding interest. This may concern, for example, the purchase of work equipment, but also housing maintenance costs in case of remote work.

If the employer provides necessary work equipment (e.g. IT equipment, office equipment) for working remotely, there is no need for the employee to purchase any such equipment. These costs would not be reimbursable. Even if an employee temporarily makes his or her private computer or tablet available for professional purposes, reimbursement of these costs will probably not be considered for reimbursement. The employee will usually not be able to provide evidence of the actual costs incurred for business purposes.

However, if the employee had to buy the necessary work equipment, a claim for reimbursement of expenses will generally exist. The reimbursement amount depends on the individual case. In particular, it depends on whether a purchase was actually necessary or whether it would have been more expedient to rent equipment. This is especially true where working from home was a temporary status only. The same principles apply to other work equipment, such as office chairs, desks, etc. Other principles may apply to consumables such as paper, toner, etc. Here it is obvious at first glance that such expenses were primarily purely work-related and probably necessary.

As far as other expenses are concerned, which the employee bears in connection with the temporary work in the home office, it is also not entirely clear to what extent these are reimbursable. This applies to costs in connection with electricity, water, heating. Working from home typically causes higher costs for the employee than working from the office (electricity, water, heating, etc.). But it will be rather difficult for the employee to precisely quantify the costs, but this would be a prerequisite for his claim for compensation. If the employee uses private telecommunications, which are paid at a flat rate, the employee will not be able to prove higher costs either.

The employer's contribution to the employee's housing costs also depends on the circumstances of the individual case. Such a claim would only be considered if the private use of the employee's own home was considerably restricted and the employee could therefore no longer use the room for the time when work is done from home. However, even in this case, the employee would have to explain and justify the costs in each individual case, which he will rarely be able to do.

Better Have Agreement in Place

After all, reimbursement of costs very much depends on the individual case. In order to avoid disputes, it is therefore recommendable to make an agreement. As far as the procurement of necessary work equipment is concerned, which is purchased on a one-off basis, it is advisable to set out an appropriate framework in the contract and to agree reimbursement only on presentation of a receipt. Before doing so, however, it should first be examined whether it would not be more appropriate to rent/lease this equipment. In case of costs which are incurred continuously by the employee during the time in the home office, a lump-sum allowance to the salary is recommended.

Occupational Safety Continues to Apply When Working from Home

The applicable health and safety regulations, notably the Occupational Safety and Health Act (Arbeitsschutzgesetz - ArbSchG) also apply to working from home, so employees must be instructed by the employer accordingly. In particular, they must be reminded that they must also comply with the working time limits and break regulations when working from home. It is essential that employers fulfil their obligations in this respect in order to minimize liability risks. The employer must take appropriate measures to ensure the employees' physical and mental health while they are working from home.

What Else Should Be Considered

Remote work also raises other issues. Many companies are ill-prepared with all the implications of switching to an all-remote model, including confidentiality and data protection when employees have access to company infrastructure from unsecure home networks, personal phones, and tablets.

Please feel free to reach out to our Employment Team in Germany or your usual contact at Orrick to find out more or if you need any help.