Employers may have a single "one size fits all" policy for all transferred employees, regardless of their position. A second popular relocation policy is a tiered variety, with benefits that vary with the employee's grade or pay level.
Tiered relocation policies often apply to new hires, whether recent grads or experienced executives and for transfers of current employees. Employer benefits vary based on the employees' current or new position, compensation level and whether they are existing homeowners or renters.
Typical Policy Components
While relocation policy components differ from company to company, there are common features, some of which are part of the majority of policies that many employers offer.
New home finding, old home sale and new home purchase help. This component includes funding house hunting trips, assigning an experienced relocation real estate agent and assisting employees in selling their existing homes. At times, employers include home sale bonuses or financial contributions for employee losses when rapid sales are necessary.
New mortgage help or mortgage financial subsidies. Employees may have to pay off advantageous mortgage loans, but receive employer financial subsidies for new, more expensive mortgages. In all cases, transferred employees appreciate employer assistance in getting stress-free new mortgages with potentially new, unfamiliar local community lenders.
Temporary housing accommodations. Whether on house hunting trips or awaiting permanent housing solutions, employees often enjoy employer assistance in securing temporary housing accommodations. While short-term hotel stays are relatively easy to locate, longer-term temporary housing can be challenging to find in unfamiliar surroundings.
Household goods. Organizing, packing and transporting household goods always poses its own challenges, stumbling blocks and logistical issues. Relocation professionals can smooth out this process to generate a coordinated, stress-free process of safeguarding and moving personal items to a new community. Often, household goods must be stored for some period before a new home is purchased or ready for occupancy. Relocation policies often provide for temporary household goods storage, while awaiting delivery to the new residence.
Duplicate housing expenses. Circumstances sometimes generate temporary duplicate housing expenses for former and new homes. Financially daunting, this situation can consume large amounts of cash quickly. Employers often help transferees meet these expenses, describing reimbursement conditions in their relocation policy.
Miscellaneous expenses. Relocation inevitably generates other expenses that fall into the miscellaneous category. A common component of relocation policies, miscellaneous expenses are typically reimbursed after the transferee presents original receipts.
Tax liabilities. Many moving expenses paid or reimbursed by the employer are excludable from income. However, others, such as meals, temporary housing, a portion of final move mileage reimbursements and home selling costs must be included in the transferee's income, creating additional taxes. Some relocation policies offer financial assistance to the employee in paying these extra income taxes.
Successful transfers depend on competitive, comprehensive relocation policies. To be successful, policies should be compliant with IRS regulations and aligned with the employer's goals and objectives. As you might expect, regardless of the type and number of components, effective relocation policies meet the wishes and needs of both employer and employee.