COVID-19 Updates—Travel and Real Estate Impacts
CapRelo is curating information from our suppliers, clients, and partners to share insights relative to transferring employee impact. Please note that with changes coming frequently, questions on specific cases should be directed to your Client Services contact or to firstname.lastname@example.org.International Updates
Governments are continuing to work to stem the spread of the virus which has now affected more than 190 countries worldwide.
- Most significantly, both India and the United Kingdom have established 3 week “lock downs” in hopes of curtailing the spread of the virus. Malaysia and the Philippines are continuing their lock downs until mid-April, with no household goods shipments allowed in or out.
- International freight forwarded shipments are progressing with some restrictions.
- Conditions are changing rapidly; therefore, we strongly recommend monitoring immigration updates. One of our valued partners, Newland Chase, provides updated advisories: https://blog.newlandchase.com/
In the US, conditions continue to vary from state to state. We are seeing some general trends from our supplier partners and clients that are worth noting:
- The White House has urged anyone leaving New York City to quarantine for 14 days.
- All household good carriers in our supply chain are no longer making collections or deliveries in or out of New York City and all surrounding boroughs. However, we do have the ability to store goods locally for time sensitive relocations.
- As of Thursday, March 26, 2020, 16 states have announced statewide stay-at-home orders, with a variety of restrictions state by state.
- All U.S. Social Security Administration (SSA) local offices remain closed to the public for in-person service and no applications are being taken for new Social Security numbers at this time. We have worked with several clients to arrange alternate payment and insurance coverage (within their organizations) as a stop-gap measures.
- Clients have begun conducting audits and reviewing outstanding expenditures. Only a handful of assignments have ended early, allowing individuals to return to their home country. Alterations to terms of an assignment contract (e.g. duration), should be carefully considered and discussed with your tax provider.
- Destination services, rental assistance, and intercultural training are now being delivered exclusively using virtual platforms.
- Household Goods Moves – At this time, transportation remains an essential service in all areas despite restrictions and household goods moves are continuing, with the exception of New York City.
- There is some concern around the impact to temporary housing providers. However, most providers are working with us to accommodate the changing plans and responding to the dramatic decline in bookings by limiting inventory.
Real Estate Updates
As states move to shelter-in-place and stay-at-home statuses, they will individually define whether essential services include these business lines:
- Real estate, mortgage, title, appraisals, and real estate inspections. This will determine the ability to progress a home sale or home purchase transaction through closing. At this time, only Pennsylvania has limited essential businesses to life-sustaining businesses.
- Guaranteed Buyout Offers (GBO) may be suspended in areas where appraisers and inspectors are not authorized to work. Companies seeking alternative options to issue these GBO to their employees may establish a secondary means of establishing value (e.g., average of two broker market analyses). However, the alternative option type and application must be uniform for all qualified employees. The IRS requires consistent methodology when establishing GBO values.
- If home values decline, then it could impact Buyer Value Option (BVO) and GBO values. There is a possibility that some employees will seek financial assistance from the company to offset some or all of their perceived loss of equity related to the COVID-19 pandemic. The company may elect to grant additional financial assistance/ allowances to offset loss and this can be credited through CapRelo on the equity statement. The additional assistance is taxable.
- There is no IRS limitation regarding length of benefit period if/when relocation benefit extensions are granted to the employee by the company. As a result, many companies are generally being flexible around extensions, depending on the current phase of the relocation.
CapRelo has followed the lead of the Centers for Disease Control and Prevention (CDC) and respective governmental agencies when recommending and implementing best practices. This includes a ban on all non-essential travel, and mandating teleworking for all those able to do so.
Fortunately, CapRelo currently has a strong remote workforce and technology solutions. Therefore, we anticipate no significant disruption to service fulfillment for our clients and their transferees.
The safety and care of our employees, clients and customers is our highest priority. As circumstances evolve, we will continue to share our observations as it pertains to the relocation landscape.
To learn more about customizing your global mobility program, corporate relocation, common relocation packages or relocation bonuses and tax compliance please submit your contact information and we will get right back to you! You'll also be subscribed to the CapRelo blog.