$4 gas could test whether your company cares more about your financial well-being - or office attendance

Andrew Keshner and Venessa Wong

'If you are making employees drive to a corporate office daily right now, you don't have a chill work environment,' says one co-CEO

Rising gasoline costs are a new challenge for workers - and their employers.

Millions of commuters are painfully aware that gas prices just hit $4 a gallon on average for the first time in more than three years. In California, prices averaged nearly $5.90 a gallon as of Tuesday, according to AAA.

Driving to the office less could save workers some money and some stress. Now they'll have to see if their bosses agree. "If you are making employees drive to a corporate office daily right now, you don't have a chill work environment. Let folks work remote," Fuego UX co-CEO Alex Smith wrote in a LinkedIn post about $4 gas. His company has always been remote, he told MarketWatch.

Oil and gas prices have jumped in the first month of the war with Iran. August 2022 was the last time the national average for a gallon of gas hit $4, during the early months of Russia's invasion of Ukraine.

The world is currently facing the largest oil-supply disruption in history, according to the International Energy Agency. Working from home when possible is one way to blunt demand and prices at the pump, the agency said more than a week ago. Officials in Vietnam, Thailand and Sri Lanka have already encouraged remote work. In Canada, the British Columbia General Employees' Union is now asking for workers to be allowed to work from home.

Yet in the U.S., employees do not appear to be telecommuting at greater rates, according to experts and data. Kastle Systems said office occupancy rates in 10 major cities increased slightly last week compared to the prior week, as spring-break vacations concluded in parts of the country.

The stock market SPX soared Tuesday on the hopes of a truce to end the conflict.

But if the fighting in Iran stretches into a second month, heightening financial pressure on U.S. workers, the written and unwritten rules about office attendance could get put to the test.

"For some employees, the added cost of gas in addition to all of their other household expenses is a financial setback," wrote PwC's workforce-solutions director Ashley Klein and total rewards and financial well-being partner Cornell Staeger in a social-media post this week.

Rising gas costs, along with higher costs for groceries and rent, create financial stress that can follow employees into the workplace, they noted. As return-to-office expectations for employees ramp up, "Less flexibility means fewer ways to offset rising costs."

Soaring fuel prices are expected to lead millions of American workers to quietly talk to their managers about staying home more frequently, according to Nick Bloom, a Stanford University economist who has studied work-from-home trends and the rise of hybrid work schedules.

Related: $4 gas is here - but one group of drivers could cruise through this 'psychological wall'

Many "return to office" mandates and expectations started as decrees from C-suite executives, after the pandemic broadened the appeal of working from home. The latest survey data from Gallup shows that 21% of U.S. workers are fully on-site, 26% are fully remote and 52% are hybrid.

Work-from-home policies are now "more about localized enforcement than top-line policy," Bloom told MarketWatch. "It's like jaywalking - it is clear what the rules are, but mostly people don't enforce them except for the most extreme cases. Typically, firms have rules on working from home that high-performing employees are allowed to skirt while low performers are held to."

In the face of "sky-high gas prices, everyone will be cut more slack," said Bloom.

If high gas prices continue, it's possible some companies will become more open to some extra work-from-home days, said Ron Porter, a senior partner at Korn Ferry. When commuting costs are high, employers have to consider morale and productivity, he said.

If workers get the green light for a couple of extra days working from home, in all likelihood it would be coming from their immediate managers instead of the company's top leaders.

"As you get to the most senior levels of an organization, they are going to toe the line," said Porter. As for mid-level and front-line managers, "there's a greater pragmatism there."

If gas prices stay high for a long time, Porter said it's even possible that, at the margins, some people will leave their jobs to find work that's closer to home, offering cheaper commutes.

"You lose talent if you don't give the option to work from home," Rich Patterson, vice president of sales at MasonHub in Florida, told MarketWatch. Patterson has been working remotely since the pandemic and estimates he is saving $200 in gas each month by skipping the commute. Due to these savings and improved work-life balance, "I will only take roles that are 100% remote now," he said.

MarketWatch reached out to a number of major corporations, asking if they have temporarily modified their office attendance policies. None immediately responded.

Bloom isn't expecting businesses to widely broadcast any changes. Executives also don't know how long gas prices will stay high, he noted. "It's like bad weather," Bloom said. "During big snowstorms, firms often let employees work from home for the week, and similarly they cut them some slack when gas prices hit $4, or in California $5 or even $6."

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Andrew Keshner -Venessa Wong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-01-26 1057ET