How would you compensate employees for commuting to work?
Suppose there are two employees: Alice and Bob, who do the same job at the same factory. Alice has a 10 minute (20RT) commute, Bob commutes 35 minutes(70RT).
If you're the owner of the factory, would you compensate them for their commutes? How would you do it?
Employees living far away is not something I would want to incentivize for so many reasons.
But that's not what compensation for the commute would incentivize. I don't understand why people think getting paid to drive to work would mean employees would spend most of the week driving. It would mean employers would only hire employees who live upstairs.
If someone enjoys driving more than their actual job, and they're getting paid to do it, it's arguably an incentive. At the very least, you're no longer decentivizing the commute by paying for it.
Paying money for a behavior is an incentive for that behavior.
Does that mean every employee would choose to live far away to maximize their commuter mileage benefit? No.
Does that mean some barriers to living far away would be reduced, thus increasing odds that some employees would live further away, or that some prospective employees that live at distance would consider applying to this company over a company that doesn't offer a commuter mileage benefit? Yes.
Companies also aren't worried employees "would spend most of their weeks driving". Most companies don't include drive time as hours worked.
I would think free time is still more valuable in most cases.
Never had an employer that cares about what I do with my free time nor how optimized it is.
The question is what a person might offer as an employer, not what benefit a person might like to have as an employee.
In my opinion, I don't think employees should be compensated for their commute. How an employee chooses to arrive to work and how far they live away from a company is not a responsibility of the company. Their job is to be ready to work when their shift starts.
However, this is an X-Y question. The overwhelming majority of jobs historically required you to show up to work. We didn't consider paying for their commute unless they had to travel for work outside of commuting. This was never an issue.
You asked the "X" question, but the "Y" question (the question you're probably asking) is how the burden of commuting should be handled for employees being asked to come in when they have been working remotely.
I think that there are many more nuances to this than simply compensation. If the employee has a working agreement with the company, and they have been managing their time with full-time remote hours, then they should consider that as part of the work agreement.
If they're being asked to come in (when they would normally be WFH), that's outside of the work agreement. It's basically like being asked to get coffee for your boss or something. If it was advertised as part of the job, and you accepted it, then that's fine. If you started work, and a year later, your boss asks you for daily coffee runs under the threat of being fired, that is not acceptable.
You have to keep in mind that the recent WFH popularity has challenged a lot of companies by making their own interests difficult. A lot of it is shitty stuff that the company doesn't want to say out loud, like:
This kind of thing. Realistically, from an employee perspective, they're doing the same work, and they don't see any issue hanging around their house in their pajamas. From a higher-up perspective at some companies, though, they don't have the same goals.
It makes sense that a lot of employees are leaving their positions with companies forcing them to come into the office. In my opinion, they're breaking their working agreement. It may not be written down and it may not be a legal difference, but there is no doubt that they're radically changing the work requirements, which might not be what they signed up for. And what if you're in a wheelchair?
Unfortunately, if Alice and Bob live in the US, there is hardly any hope for them if the company doesn't have goodness in its heart. The workers' rights laws in the US are almost non-existent. There are even about three dozen states that can even legally fire you for being gay. It's that bad.
In my opinion, workers' rights should be highlighted, and side effects like working agreements and compensation for commuting should be solved problems by proxy.
I believe my company's arrangements are agreeable for remote workers.
For those who are classified as fully remote, they can claim travel expenses on mileage up to a certain range. Basically, the radius of the city that their "core" office is based out of plus the surrounding towns. But they can't claim more than that (unless they're out of state and they'll pay for like plane tickets and whatnot).
For those who are hybrid (expected to show up at least once a week) and fully onsite, they don't get any mileage for travel to their home office but do get mileage to satellite offices, calculated by distance from the home office.
The compensation is also very generous. While I am hybrid, I have one day per week at my home office and one day per week at another, and that is more than enough to pay for my gas (even factoring in non-work related travel, which I admittedly don't do much of).
But there are definitely some people who are able to benefit from this more than others. If you live a 5-minute drive away from the furthest office from your home office (would that I could be so lucky), you get to claim a lot of travel reimbursement with minimal actual travel, which seems unfair for those who are routinely asked to commute even further than their norm.
Yeah why not. That shit is normal in my country. People get paid per kilometer or they get a transit pass. Of course the amount is capped and it’s a tax write off for the company anyway. Not sure why some of the comments here are against it. I guess they are all Americans
of course the Americans are against it
"BuT WHY IS SHE GEAtatING PaId MORE"
Pretty normal here in the San Francisco / Silicon Valley area. Although it usually comes in the form of chartered busses, transit passes or free parking. And parking in San Francisco can be like $400 a month, so free parking is nice.
The commute in this area averages 1-2 hours one way for many. So transportation perks are important to retaining high value employees.
And because the commute sucks, remote / hybrid work options are also key for many gigs.
I would put then on the same shift so they eat lunch together. Soon they will fall in love, get married and move in together. Problem solved.
What do you mean compensate employees for their commutes? If I were a self-respecting factory owner, I would figure out how to get the municipality to scale back any public transit options so I could lease vehicles to my employees. They should be paying me to get to work, ha!
Spoken like a true businesstorian.
like a subscription!! yes!!!
they would pay you everyday to get to and from work. would it be a flat rate or by the length of commute? length in minutes? miles?
They'd just be typical leases at competitive rates, but with expensive penalties for going over milage limits (those limits being the yearly necessary travel distance to and from work for each employee). The cars will be underpowered, "environmentally friendly" electric vehicles.
Blowjobs
If we have to be hypothetical, let's go wild
You've got union rep written all over your post.
I'm gonna be all over the union rep
It's none of the company's business how an employee gets to work. It's just not.
The company should compensate the employee fairly or well for the COL in the area the job is. That's it. It's not their job to worry about how the employee gets to work.
Other than allowing/encouraging WFH where it makes sense the company shouldn't try to tell the employees how to live.
I disagree. If a company chooses to NOT be in a huge city, yes. But if they are in a city just to flex with the address, and basically noone actually lives there (which is a very big thing here), then yes it is their responsibility
Then they can pay their employees more for the trouble as a whole. Which is what generally already happens for employers in high cost of living areas anyway.
Anything short of my commuting time being considered part of my working hours is a non-starter for me. I value the time I gain by not commuting a lot more than most employers do. If my day starts the moment I close my front door, then we can start talking about additional concessions.
Any compensation for commuting to your regular work place is considered taxable income.
The government allows for a tax deduction if commuting costs exceed a certain amount.
I would not do anything about it as is the custom in Sweden. If they want to change it their union can negotiate it, but they are generally more interested a bigger raise than misc benefits.
That's cute that you think America is unionized. Many, many places do not have unions or support for their workers past base things at government level. More often than not, we are shat upon and expected to thank our corporate overlords for the opportunity.
In the U.S., employers can subsidize bus passes, van pools, and bicycling to work (I guess provide bikes?) as a tax-free benefit. I'd certainly offer that.
I would not provide more $ to the employee who took a job further from home, unless I was doing on-site jobs on various job sites, work that moved around. Events, construction, etc. My employer pays for airfare or mileage for event work, that is not taxable to the employees.
Even when I did temp work I wouldn't take jobs far from my house, or any that were not one bus away, even though I have a car because cars break sometimes.
I DO think of commute time in a car as unpaid work but manage that in my life by working near home, or living near work.
My employer gives us a commuting payment based on the distance from home to work (paid per km) on days we go to the office. We get an additional €60 a month to cover our working from home costs.
No. I don’t know or care where they live. I will provide parking.
Easy to dump the burden of the commute on the staff as the cost of living close to city centres keeps climbing way faster than you’re raising their pay.
Times change, and the old standards don’t make sense anymore.
you mean, you'll give them a discount on parking? ;)
Some countries actually pay your commute fees or part of them. In Argentina it's called viático. It can be advertised as part of the job payment or discussed upon closing the agreement, regardless of whether the job is legal (by the books, officially taxable) or otherwise.
I think it's pretty standard in the EU.
I had no idea! Cool
lol Argentina is a strange place to use as an example. I see what you mean though
I know... lol I'm not trying to say it's any better. Wealthier countries don't see the point in compensating this way, because the expense in the grand scheme of things is just petty change for the workers.
But if it was necessary, then it's not too bad a system, which is what OP was after.
A high static number, like $100/week. The people who live closer will get a little extra and that's fine (a mild incentive)
This is how a lot of companies in my area do it. They might offer either a transit card, a parking pass, or a small extra cash bonus each month. Generally the transit card and parking passes are more valuable than the cash.
I wouldn't do it for time I'd do it for distance
And I'd have a cap for compensation for distance
I'd probably also offer a percentage coverage for monthly public transit passes to encourage workers to use public transit more
Now Alice and Bob both live 10 miles away. Alice drives a GMC Yukon Denali and Bob rides his bicycle. Since Alice's commute is more expensive, should she be compensated at a higher rate than Bob?
No, they both get compensated for 10 miles and if they bring proof of purchasing a transit pass for the month a percentage reimbursement
No, that's Alice's problem.
No. It's not the employers fault that Alice spent more money on her mode of transportation.
This is why paying people for their commute is unreasonable. Payment by mileage is based fuel costs mostly. Some wear and tear, but mainly it's to offset the fuel cost. If someone rides a bike to work, they don't have fuel costs, therefore should not be compensated.
In my country the cap is at 12 km I think. So within that distance from work no one gets compensation. Beyond that distance, everyone can get compensation. Motorcycle, car, and train get the same per km compensation, and bike/moped/scooter get a slightly lower ammount. If you have to travel over 60 km (one way) the per km ammount goes up.
Compensation is normally in the form of a tax deduction, but some companies have their own compensation schemes where they pay you for travel. If you get paid this way there's no tax.
Why would an employer care how far away their employees live, or compensate them for their travel?
Unless the employer also gets to decide where they can and can't live, why should they compensate them?
Why would an employer care how far away their employees live
Commute obviously has an impact on overall satisfaction. In roles that can be done remote or in person you can effectively trade commute time for pay.
This logic can be extended to employees working in person with contrasting commute times. Thus op's question
It's dependent on how competitive the job market is. You either pay the person more to get them to do it or you don't. You set a value on their relative skills. Everything else comes out in the wash.
First: a company should pay at a minimum a wage that can afford housing nearby (probably within 15 minutes' drive). The company should pay everyone for work hours + that round trip nearby commute time
If the company is paying that wage, then employees who live farther away are making a free choice to do so. They still get that round trip nearby commute time paid, but time beyond that is not paid. Or paid at some diminishing rate.
Companies should recognize a worker's time list for the company's benefit. But there has to be a balance because of the temptation to game the system.
Intentionally living farther away from your job doesn't sound like such an appealing thing though because you are still wasting however much of your day having to drive to work. Like sure you get paid more but the pay is hardly ever worth more than the extra free time.
I commute an hour, but I only do so because it's cheaper to live where I do instead of in the city I work in. I'm already compensated.
If I wanted a short commute I would be paying for it.
If they can take public transit I'd pay for it. I'd give them up to $2,000 hiring bonus to buy an electric bike (maybe find a good company and get a discount) and offer relocation fees to get within range of either. If you're driving, use park and ride and I'll pay for it.
Other than that, WFH.
Fuel card, or static rate for travel costs that actually covers the cost
What if Bob rides a bicycle? Should he be compensated at a lower rate because his actual costs are less?
The easiest two ways are to either pay per mile, or just add the round trip time to whatever their pay is. There might be some small complaints and attempts to abuse. But the complaining is easy to deal with and I think the abuse would be small and could be dealt with in similar ways as other time theft is dealt with.
Let's make generalizations to answer the bigger problem here.
Most jobs that people are talking about are in cities.
Some people choose to not live right in the middle of a city for various reasons, but still want that job. They may live in a nearby community, the edge of the city, a county or two over, etc.
Predatory companies like Amazon resolve this by telling someone like Ryan homes to build a few 300 house communities right next to their new warehouse, resolving the issue and making their own non-city town. Normal companies do not have this ability.
There has to be a balance.
Businesses need to not be involved in commute repayment. They should instead invest into their local communities to make them more desirable to live in.
"choose" is doing a lot of work there. Have you priced housing lately? The real "choice" I see is that companies "choose" their location such that their employees can't afford to live nearby on the wages they're earning, or the companies "choose" to pay employees to little in wages to afford to live nearby.
You could also say the employees choose to work for the company that's not paying them enough. Of course they have constraints in how many jobs there are and how many other job seekers exist and which jobs they are qualified for... but then the problem complexity explodes to "how do we build a fair society" very quickly.
although it is also true that near areas with lots of jobs rents will be higher and this is a case where the bourgeoise is actually relatively innocent and landlords are to blame instead. This is to a far lesser extent than it is for the proletariat an issue for the bourgeoise as it makes hiring more difficult to hire and takes money out of the economy that would likely otherwise be spent on commodities
Half assed ideas.
Option 1) % of hourly pay rate, capped at an two hours for a total round trip (but flexible) + a stipend depending on mode of transportation. Could try to get receipts from workers and have a purser issue cash/credit on their next paycheck or issue re loadable debit cards that get filled at regular intervals. (So a card for paid public transit and fuel for combustion vehicles) If we're working in a place that taxes employee wages, the more taxes the employer can carry the better on the workers.
Option 2) Everybody gets a debit card and a list of approved places/items to be purchased for the purposes of "commuting to work compensation". Workers could be expected to keep as many receipts as possible to turn in weekly just to verify stuff.
Option 3) Some subcommittee tracks worker commute times and how they commute and every quarter or something a stipend is paid in a lump sum like a bonus or it is used to give a paycheck by paycheck payout.
Easiest idea would be like JohanSkullcrusher said, full hourly pay rate the second I get into my car to start driving. Though workers would wind up paying more in income taxes and there'd probably be some issues with workers getting different compensation, like somebody walking 10 minutes to work and somebody driving 1 hour to get to work are going to have significantly different income levels at the end of the year.
I would turn the company over to the workers so they can decode. Also prevents my death when a revolution inevitability occurs.
solidarity
Government has power to put it on trial.
As a public test, it'd show if it works. Then, it can be pushed onto students, then on other spheres.
Then, as a large amount of workers has this benefit, it's not a wet dream but a real thing to consider and demand. One that private businesses would see.
I do find that not paying for commute has a good competitive value. It means I start to earn money right from the time I clock in, not spending my first minutes to compensate getting there – and that's a bitch for low-paid workers. Compared to those working from home, I still wake up earlier and am trapped on company's ground, but it's a first step to bridge and accept this difference.
In some cities I visited (ex-socblock) some big factories provide their own transport to take workers from their district and then bring them back. Since they are based way out of cities' limits due to health concerns, it's an obvious solution to that. By managing the commute of workers, factory may also be sure everyone in production line gets there at the same time, reaching full efficiency.
If I am travelling to a location purely to do my job at that location, then travelling to that location is part of my job. I must be reasonably compensated for it either as part of my salary or as an extra (tax adjusted) payment.
Switch the pronouns and such to apply for Bob and Alice both.
I'll offer Bob a place near the workplace if he's a good employee. If he asks me to pay for his transportation expenses, it won't happen. I think I'd formally invite him to find another job at the end of the contract.
If I were to do it, I'd take the mileage of the drive as the most important factor, as companies in the US know the addresses of employees. Then I'd assume a gas price of $4.5/gallon at all times (Midwest prices aren't like the coasts) and assume a gas mileage of 25mpg. The person is paid this every day of the year without exception
No, the one with the longer commute should be taxed extra to account for all the damage caused to the environment, increased traffic, road wear and tear, etc.
Commuting should never be encouraged. Live where you work.
Not everyone has that choice. Living where you live prevents upward mobility.
I would negotiate that with them because maybe Bob doesn't care but Alice does or vice versa. Now if I was either bob or Alice. Yes I'm calculating fuel, maintenance and meal cost into pay.
Offering to finance all or part of the tickets is a good option IMO. My company offers the German "job ticket" or whatever it was called again to a percentage.
If it were me I'd just get an average commute, provide a stipend of gas or transport costs within your city, e.g. 15km distance, or a monthly pass for local area transit. If I'd want to relocate someone I may offer a signing bonus to help with moving and settling costs.
It's a reasonable expectation that if your job is at a workplace in Toronto, being within city limits is not an unreasonable expectation.
The compensation could be capped at 15 miles or 30 minutes or something, which would encourage people to live closer to work.
This is idiotic. No one compensates employees for their commute.
So many ridiculous variables that would need to be factored in and so much room for abuse. Are they going to be compensated based on distance or time?
You just asked exactly the same question as the OP
I asked that question rhetorically. I was actually going to list a bunch of other questions as well to show how difficult this could turn out being, showing how stupid the idea is. What if one person is 15 miles away but no car, versus someone 40 miles away with a car? Or 2 people are the same distance away but one drives and the other doesn't? Do they get the same amount? What if someone moves further away... does that mean they get a raise?
Where I live (NL) €0,21 per kilometer (untaxed) is typical. Some get a cross country public transit pass which can be used for unlimited private trips or even car which can also be used for private trips, though for cars this is seen as income and taxed. But with tax incentives for EVs it isn't too bad.
There are also companies that pay something like €600-1500 per month mobility budget (taxed as income if not used, partly tax free is used for transportation options named above or KMs.) This is more typical in higher paying jobs of course.
It's less typical to see time paid.
This is idiotic. No one compensates employees for their commute.
Yea, thats not true. Where I live any employer legally has to do it. They either pay a certain amount per kilometer (defined by law) or pay your public transportation fee. I rack in about 300€ of travel compensation every month which covers fuel costs. Having to pay to get to work seems to bizzare to me.
Also wait till you learn our lunch breaks are paid and on top of that the company has to either provide a meal or compensate you for that too...