For the past five years, remote or hybrid work has become increasingly common for many Ontario businesses. While this shift has brought benefits in terms of flexibility and reduced commuting, it has also raised important legal questions about workplace rights and employer obligations. Chief among them is the issue of home office expenses, and whether employers are required to pay for the costs employees incur while working from home.
This question continues to generate confusion among both employers and employees, particularly as remote work arrangements become more permanent. The answer depends on several factors, including the terms of the employment agreement, the nature of the expenses, relevant employment standards legislation, and evolving tax and workplace policies.
The Legal Framework for Home Office Expenses
Ontario’s Employment Standards Act (ESA) establishes minimum standards for most employment relationships in the province, including requirements for wages, hours of work, vacation, and termination. However, the ESA does not explicitly address whether employers are obligated to reimburse employees for home office expenses such as internet, electricity, furniture, or equipment.
Because the ESA is silent on this point, the issue of whether the employer must cover such expenses generally falls to the terms of the employment contract or company policy. In the absence of an agreement, there is no automatic requirement under Ontario law that obliges an employer to reimburse an employee for expenses related to working from home.
Other legal principles, such as the employer’s duty to provide the tools necessary to perform work, human rights obligations regarding accommodations, and tax rules around employee deductions, can influence whether reimbursement may be appropriate or even required in specific circumstances.
Employment Contracts and Company Policies
One of the clearest ways to determine whether an employer is required to cover home office expenses is to examine the employment contract or remote work policy. These documents may set out specific entitlements, such as reimbursement for internet costs, ergonomic furniture, or use of personal devices.
Where a written policy or agreement exists, its terms will generally govern the employment relationship. For example, if a contract states that the employer will provide a monthly stipend for internet or cover the cost of office supplies, those obligations are enforceable.
However, ambiguity in such policies can lead to disputes. If a contract is silent or vague on the issue, employees may argue that an implied term exists requiring the employer to cover reasonable work-related expenses. Employers are therefore encouraged to include clear language in employment agreements and remote work policies addressing:
- What types of expenses are eligible for reimbursement;
- What documentation is required (e.g., receipts);
- Any caps or limits on reimbursements; and
- The approval process for claiming expenses.
Inconsistent or unclear policies may cause internal confusion and result in legal challenges or complaints, particularly if expenses are denied arbitrarily or treated differently across employees.
The Employer’s Duty to Provide Tools and Equipment
Another consideration is the employer’s general obligation to provide the tools, equipment, and support necessary for employees to perform their work. In traditional office settings, this includes desks, computers, software, printers, internet access, and ergonomic accommodations in traditional office settings. In remote or hybrid environments, this responsibility may shift, but does not disappear.
If an employee is required to work from home, either temporarily or permanently, the employer may be expected to ensure that the employee has the tools necessary to do the job. This does not necessarily mean reimbursing all expenses, but it may mean supplying a laptop, granting access to cloud-based systems, or ensuring compliance with health and safety obligations related to home workstations.
Courts or tribunals reviewing such cases may consider whether the employee had a choice in working remotely. If remote work is voluntary or flexible (for example, employees are allowed but not required to work from home), the employer’s responsibility to pay for expenses may be reduced. Conversely, if remote work is a mandatory condition of employment, whether due to business decisions or public health measures, employers may face a greater onus to support home office setups.
Health and Safety Considerations
Ontario employers have a duty under the Occupational Health and Safety Act (OHSA) to take every reasonable precaution to protect workers. While the OHSA does not specifically address home offices, employers may be expected to take reasonable steps to ensure that remote work arrangements do not expose employees to preventable risks, including those related to ergonomics.
This could involve providing ergonomic assessments, offering guidance on proper workstation setup, or contributing to the cost of ergonomic chairs or adjustable desks. Failing to do so may not only affect productivity and employee well-being but could also result in health claims, particularly where musculoskeletal injuries are sustained due to inadequate equipment.
Human Rights and Accommodation
Employers in Ontario also have a legal duty under the Ontario Human Rights Code to accommodate employees with disabilities to the point of undue hardship. This obligation applies regardless of whether the employee works on-site or remotely.
If an employee requires specific equipment or software as part of an accommodation plan (such as a specialized monitor for vision issues, speech-to-text software for a disability, or a particular type of office chair), the employer may be required to cover the associated costs.
The duty to accommodate is individualized and fact-specific. Employers cannot refuse to provide accommodation solely because an employee works from home, nor can they offload the financial burden of accommodations onto the employee. In such cases, reimbursement or direct provision of the necessary tools is typically expected as part of the duty to accommodate.
CRA Guidance on Home Office Expenses
While the Employment Standards Act may not compel employers to reimburse home office expenses, the Canada Revenue Agency (CRA) provides guidance on whether employees can deduct such expenses on their personal income tax returns.
In 2020 and 2021, the CRA introduced simplified rules that allowed eligible employees to claim home office expenses if they worked from home due to the pandemic. Under these temporary measures, employees could claim up to $500 in expenses without submitting detailed receipts, provided their employer confirmed the remote work arrangement via a signed form (T2200 or T2200S).
While the simplified method has now ended, traditional rules still permit employees to deduct reasonable home office expenses if:
- They were required to work from home by their employer;
- They use their home workspace regularly and exclusively for employment duties;
- They did not receive full reimbursement for the expenses; and
- Their employer provided a completed T2200 form.
Common deductible expenses may include a portion of electricity, heat, rent, and internet, as well as office supplies. Capital expenses, such as computers and furniture, are generally not deductible unless the employee is self-employed. Notably, these deductions only benefit employees who meet the CRA’s criteria and file accordingly; they do not create a legal entitlement to reimbursement from the employer.
Evolving Workplace Norms and Best Practices
Although employers in Ontario are not generally required by law to reimburse home office expenses, growing employee expectations and the normalization of remote work have changed the conversation. Reimbursement policies, while once rare, are becoming more common as companies compete for talent and seek to foster equitable, productive work environments.
Many leading employers have implemented flexible reimbursement programs, monthly stipends, or wellness allowances to help cover the costs of home office setups. Others provide in-kind support, such as shipping office furniture to employees or allowing them to take home equipment from the office. These practices not only improve employee satisfaction but may also reduce health-related claims and support better performance.
Transparency and consistency are critical. Employers should avoid ad hoc or selective reimbursement decisions and instead develop clear, written policies that outline eligibility, approval processes, and expectations. These policies should be communicated clearly at the outset of employment or when remote work arrangements are introduced.
Employers should also monitor changes in legislation and policy. As remote work continues to evolve, so will the legal and regulatory landscape. Federally regulated employers may face different obligations under the Canada Labour Code, and ongoing discussions around digital labour standards and the “right to disconnect” may further shape employer responsibilities in the coming years.
Contact Bader Law for Comprehensive Employment Law Services in Oakville & Mississauga
If your business employs remote or hybrid workers, it’s essential to clearly define responsibilities regarding home office expenses. Unclear policies can create disputes, compliance risks, and employee dissatisfaction. At Bader Law, our innovative employment lawyers can help you review or draft employment contracts and remote work policies that protect your organization while supporting your workforce. Contact us online or call (289) 652-9092 for tailored legal guidance on managing workplace expenses and remote work obligations in Mississauga, Oakville, and surrounding areas.