Who Pays the Rent for Your Work-From-Home Office—You or Your Company?
Rick Gillis, Author, Leveling the Playing Field
Covid has changed how we work.
However, one thing that has not changed are the leases corporate America is responsible for, at least until those leases expire. When that happens one of two things will occur. Corporate America will see a potentially huge (gigantic, actually!) cash windfall, or their employees will rightfully receive rent for the space they occupy in their homes on behalf of their company.
While you have been figuring out whether to work from the bedroom or the kitchen, there is a good chance your company has been paying for vacant office space. This could be space in the hundreds of sq. ft. or thousands and thousands of sq. ft. that your employer is obligated to pay for until lease termination.
Should your company determine not to renew existing leases the question then becomes who will bear the cost of your workspace going forward?
When Covid first struck a couple of things happened to prove the efficacy of the world working from home—principally the backbone of the Internet was tested, and it held up just fine. A big win for the Zooms and Amazon Web Services of the world! The other big change to the world of work was the overnight exodus to our living rooms, kitchens, spare/existing bedrooms and learning how to wear enough clothes to look acceptable from the waist up. And for those people still concerned with the appearance or the ‘legitimacy’ of working from home, receiving rent for the space in which you work validates the practice.
Prior to doing what I do today (from home I might add), I was in the commercial office space leasing business. I managed and was responsible for several hundred thousand net sq. ft. spread across 14 buildings situated on 20 acres of property. Besides being responsible for the physical assets (grounds, parking lots, lighting, physical buildings, restrooms, roofs, HVAC, etc.), I also negotiated leases with Fortune 100 companies, the U.S. government, as well as the local insurance agent and accountant.
So, what ARE companies going to do with all that space (much less the furniture and equipment) when all those commercial leases across the country expire? Futurists are you feeling me here? There will be a lot of space to fill with luxury apartments or restaurants or hydro farms or…? Office buildings will have to ‘multi-task’. Things will shake out eventually, but I digress.
Let me put on my commercial-leasing hat. How are those previously occupied space leases being paid out at this time? How many companies are reducing, subletting, or buying out their leases? Companies will do what they have to do, and lessors will do the same. But AFTER the changeover for workers from commercial office towers to apartments and homes and RVs, I don’t think companies can just quit paying for the real estate their employees occupy— whether it be in a single building or spread out in homes and apartments across the country, or yes, even on the road.
Why? Because Larry and Keshia and Juan and Ursula’s ‘facilities’ (their homes) have now become ‘commercially’ rentable square footage.
With a company no longer paying an annual rate of $12 to $300 per sq. ft. for office space, said company will reap a huge windfall that, if we are to be fair about it, should be used to pay for the square footage their employees are utilizing to keep their businesses humming.
When I leased commercial office space in the past, monthly rent included the cost of security, insurance, utilities, janitorial, general maintenance, parking, etc. When I work from home, I am providing to my employer not just my square footage but also the cost of maintenance, utilities, ‘janitorial’, security and insurance for the square footage I use and, at least in my case, this includes my break room (my kitchen or den) and facilities (um, the restroom). Personally, my actual working office space physically occupies approximately 12’ x 12’ or 144 sq. ft.
It is important for you to understand that rental rates are quoted annually. Therefore, were I to quote you $12 per foot rental you would pay me $1 per month for each sq. ft. you occupy. In my case, at 144 sq. ft. at a monthly quoted rate of let’s say, $24 per foot, I would receive $288 monthly ($24 x 144 sq. ft. = $3456 annual rent ÷ 12 mos. = $288 per month rent).
The question then becomes, am I not entitled for office space reimbursement? I think yes.
About the Author: Rick Gillis has been in the business of employment since 1997 when he was involved in the highly successful launch of the first local employment website to serve the Houston, TX market. His newest book, LEVELING THE PAYING FIELD, is the sum of his varied and colorful career in sales, as a manager, author, speaker, award-winning media host, and now, as an indisputable thought leader.
