Reviewing Your Employee Stipend Policy for the Now

The move from centralized offices to hybrid and fully remote workplaces has changed the conversation around stipends for staff. For example, a commuter benefit might not now be as valuable to employees as a budget for speedy internet access or a productive home office.

And that shift leads to questions about what, exactly, employees can or should cover.

It can also present an opportunity to stand out in a challenging hiring market, said Laurie Enke, a human resources consultant with the Employers Council  (opens in a new tab). She noted that many employers have been slower to make changes with the presumption that a return to the office would be happening in short order. But as that hasn’t happened, the mindset might be changing.

“You are starting to see more organizations provide stipends as they’re making their plans for the future in terms of remote work or hybrid remote work for their workforces,” she said.

How Organizations Have Adapted to Remote Stipends

In some ways, the Florida-based association management company Arden Solutions  (opens in a new tab) was well-positioned to move to a fully remote environment ahead of the pandemic, with employees largely working remotely but occasionally going to the office for in-person meetings or a work session.

The pandemic nonetheless shifted the company’s approach, according to Arden’s founder and president, Ginger Phillips.

“When the pandemic hit and we couldn’t be together, I tore down the office and handed out the equipment, [such as] a preferred desk,” she said. “Mostly, in all honesty, we kept doing what we had been doing.”

While the setup mostly remained the same, it still required some shifts in policy to account for added costs that the now fully remote staff was taking on. The AMC took steps to ensure that people were properly equipped so that they could continue to work comfortably. This meant providing them with the right desks, and with stipends for mobile phones and fast internet access.

“You have to have really good internet at your home office,” she said.

Arden Solutions isn’t alone. The National Volunteer Fire Council has also taken steps to support employees through stipends. NVFC CEO Sarah Lee, CAE, noted that employees use their personal phones for handling expense reports, emailing, and scanning, as well as using them as a primary work phone. So it made sense to offer a stipend for them.

“We feel that providing stipends to ensure that our employees have the right tools they need to work effectively and efficiently is a small price to pay and yet reaps great rewards,” Lee said.

Stipend Policy Considerations for Associations

Of course, covering employee expenses may not be optional, depending on where your association is based. As Enke pointed out in a recent blog post  (opens in a new tab), a number of states and localities (including California, Illinois, Iowa, Montana, Seattle, and Washington, DC) require employers to offer reimbursements for employment-related expenses.

“Be sure to see if your state or location requires reimbursement of business-related expenses,” she said.

And then there’s the question of how the cost-covering should pay out from a tax standpoint. Reimbursements covered after the fact tend not to be taxable to the employer, while stipends issued ahead of time will be.

“Some organizations may say, ‘I want to make sure that you get the equipment; I’ll do a reimbursement’—then it’s not going to be taxable to [the employee],” Enke added. “Other organizations may say, ‘Hey, you know what, I’m going to give you that $300, and you know what you need, and you can use it however you want.’ But that’s going to be taxable further under the IRS.”

The Benefits for Employees

As Enke noted, in cases where reimbursement is not required by law, offering reimbursements and stipends is an effective way to improve the total compensation package. “It’s enticing to new employees, but also to retain our current employees,” she said.

Of course, there is one other thing that needs to be kept in mind: What happens to staff members who can’t take advantage of a remote benefit, for whatever reason? That’s something Enke said you need to account for.

“The other side of it you need to consider is, part of your workforce can’t work from home,” Enke noted. “How do you balance that benefits package with your team that can’t work from home, where they have to come on site?”

In offering advice to other organizations looking to support employees through remote work, Arden’s Phillips pointed to the importance of employee comfort.

“Buy people a good chair, a good, comfortable desk,” Phillips said. “The equipment still belongs to the association, so if they leave, you’ve got to collect it back. But I think that associations spent a lot of time arranging for nice offices to work in, and that same thinking needs to apply to people’s home offices.”

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