What is employee relocation?
What is a corporate relocation policy?
- Re-decision counseling
- Departure and destination assistance
- Household goods move.
What should a relocation policy contain?
- Eligibility: who’s eligible to receive relocation benefits? Do these benefits differ based on employment status, employment type, or relocation distance?
- Benefits: what are the relocation benefits and limits?
- Claims: how should employees claim relocation benefits?
- Taxes: are there any tax implications of relocation benefits?
- Loss of reimbursement rights: will employees lose relocation reimbursement rights in case of dismissal or voluntary termination?
- Non-reimbursable expenses: are there costs that the employer will not cover?
- Relocation support: does the employer provide information packets about the new location?
- Family employment support: does the employer help employees’ family members find new jobs?
- Payback: do employees have to pay if they decide to leave the organization within a specified period?
What is a relocation allowance?
- Moving, packing, and transportation costs
- Airfare or train ticket costs
- Meals
- Temporary lodging
- Personal item storage costs
- Incidental spending while settling in at a new location
What does a relocation package include and what does it cover?
- Temporary housing, travel, and food: these expenses help employees during house hunting trips at a new location. Some companies also provide childcare expenses during relocation trips.
- Moving household items: companies usually reimburse employees for packing, moving, storage, and unpacking fees. However, you may add exemptions for cleaning, repair, fixture purchases for a new property, furniture assembly, and fixture removal from the old property.
- Personal expenses: cover travel, accommodation, and meal costs for employees and their immediate family members or dependents.
- Agent and legal fees: help homeowners meet real estate agent fees and legal costs during a home sale.
- New residence costs: include agent fees, survey costs, and referencing costs for a new property rental or purchase.
- Rental contract termination costs: enable renter transferees to meet rental termination costs while vacating rental properties before the term of the agreement ends.
- Miscellaneous relocation costs: cover other related expenses. For example, you may offer expenses like washing costs, phone line installation changes, and appliance installation fees.
What is HR’s role in designing a corporate relocation policy?
- Create and manage policies: partner with key business stakeholders and chief operating offices to write or revise policies or processes.
- Coordinate with managers: identify employees suitable for mobility opportunities.
- Select vendors: create a list of external service providers (for example, movers) that employees can trust.
- Work with the legal team: identify potential legal issues and answer tax or immigration-related questions.
How are relocation allowances used and paid?
- Lump-sum package: this relocation benefits plan offers a set amount of money that employees can use for their move. Companies providing this package sets a move-specific budget that gives employees the flexibility to spend during relocation.
- Tiered package: these packages are customized to fit employees’ experience, seniority level, and their number of family members. For example, an entry-level employee may not receive the same benefits as vice presidents or other senior executives.
- Expense reimbursement package: these relocation plans reimburse employees based on actual expense bills. In this case, employees pay for all moving expenses and file reimbursement requests. Some companies may set a reimbursement limit—which is a wise move.
- Fully-covered relocation package: this package fully covers all relocation process expenses. Companies typically grant these packages to senior-level employees.
How to write an employee relocation policy in five steps?
1. Start with a plan
2. Build collaboratively
- Move duration
- Potential bonuses
- Relocation benefits
- Tax difference
- Relocation coverage and perks
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