CBRE flags hybrid-work compliance risk for state and local incentives

Companies collecting state and local incentives face a fragmented compliance landscape as hybrid work schedules collide with rules written and enacted before 2020, according to a CBRE report covered by Connect CRE on Oct. 15. CBRE said temporary pandemic allowances have expired, state rules conflict with local mandates, and compliance definitions can work against the benefits companies are collecting.

On-site attendance requirements now range from 0% to nearly 60% of a standard work week, CBRE said. No single definition of a qualifying job fits the hybrid norm.

CBRE flagged three common incentive-compliance risks: expired pandemic relief, rules that apply to retained positions as well as new hires, and credit reductions when on-site headcount falls. Pandemic-era relief has expired in many jurisdictions without formal notice; companies that keep relying on those allowances could be considered retroactively non-compliant. Existing remote workers cannot be grandfathered into attendance requirements. Reducing on-site headcount also reduces the credits a company can claim, which the report said can bring clawbacks or other penalties tied to multi-year retention commitments.

CBRE recommends screening incentive programs against projected workforce models before site selection, auditing executed agreements early, and renegotiating terms with economic development agencies when gaps appear. Agencies typically prefer renegotiation over clawbacks when a business shows continued investment and good-faith effort, CBRE said.