Sample Relocation Policy

Here’s a sample relocation policy used by a company in the retail/wholesale trade industry. It also includes an expense estimate form for employees to fill out.

Eligible Employee Groups:
Top Management; Management (excluding Top Management); Exempt, Non-Management; Nonexempt Office Personnel; Nonexempt Technical, Skilled and/or Semi-Skilled Personnel

Key Features:

• Tiered Relocation Policy
• Relocation/Employment Agreement
• Sale of Current Residence/Home Marketing Assistance
• Independent Home Sale
• Rental/Lease Cancellation
• House Hunting
• Temporary Living
• Equity Advances/Bridge Loans
• Closing Costs on Destination Residence
• Transportation of Household Goods
• Shipment/Transfer of Cars, Boats, and Unusual Items
• Storage of Household Goods
• En Route/Final Move Expenses
• Relocation Allowance/Moving Bonus
• Maximum Dollar Limit on Relocation Expenses Covered
• Submission of Expenses for Reimbursement
• Spousal/Elder Care Assistance
• Tax Implications/Gross-up

Employee Relocation – Exempt Employees

PURPOSE
To establish a policy for the reimbursement of defined expenses incurred when a salaried exempt employee is permanently transferred from one location to another at the Company’s request.

OBJECTIVE
To provide financial and administrative relocation assistance to a salaried exempt employee in order to maximize their performance and minimize their inconvenience during the relocation.

SCOPE OF POLICY
This policy applies to exempt employees who are required to relocate because they are being permanently transferred (for no less than 12 months) at the Company’s request to a location within the Company (within the United States [including possessions and territories] and Canada) that is at least fifty (50) miles farther from their residence than their former job location.

Reimbursement for relocation will be limited to expenses enumerated below incurred by the employee and legally-recognized, immediate family members who currently live with the employee.

Eligibility must be approved by the supervising manager, functional Vice President and Human Resources Department. Prior written approval is required for exceptions to this policy, either in determining eligibility or extent of coverage. This prior written approval must be obtained from the Human Resources Department.

Benefits under the plan will cease if the employee resigns his/her employment or is terminated for cause, including for poor performance. In addition, if an employee resigns from his/her employment, or is terminated for cause, including for poor performance, within 12 months of having been transferred, the employee will be required to reimburse the Company for relocation expenses paid for by the Company under this policy.

Nothing in this policy should be construed as a contract for employment for any period of time or as altering the at-will nature of the employment relationship. The Company has the right to terminate employees for any or no reason at all, at any time.

This plan is administered by the Human Resources Department. The Company will not be responsible for any action taken which is beyond the scope of this plan.

GENERAL POLICY

• An employee will be eligible to have his/her relocation expenses reimbursed after relocating to a new job location that is at least fifty (50) miles farther than his/her former residence was to his former job location.
• Relocated employees shall submit, in reasonable detail, vouchers for all expenses incurred to the Human Resources Department for approval and reimbursement.
• All relocation related expenses should be filed separately from other types of reimbursable business expenses and should be clearly marked “Relocation Expenses.”
• It is not the intent of the Company to provide an upgrade in housing (e.g., move from rental to ownership of residence, purchase of home with substantial adjoining land, purchase of multiple unit residence, etc.) for relocating employees.
• Employees to be relocated should be made fully aware of the contents of this policy. Any questionable expenses should be resolved with the Director of Human Resources before the expense is incurred. Because relocation involves many aspects, any exceptions to this policy requires the prior approval of the Director of Human Resources.

APPROVALS
All requests of employee relocation must be approved by the supervising manager, functional Vice President, and the Human Resource Department prior to actual relocation or commitment to the employee. In addition, any exceptions to this policy require the prior written approval of the Human Resources Department. The Relocation Expense Estimate form must be approved prior to relocation expenses incurred.

The following outlines the reimbursement:

EXPENSES COVERED
In order to address the financial concerns you may have regarding a move, the Company has put together the following relocation package of up to a maximum of $20,000, inclusive of tax gross-up. Included in this package are some items that may help to address some personal concerns you may also have.

Trips to Locate Living Accommodations
Reimbursement will be made for reasonable and actual expenses incurred by you and your spouse for travel to the new location to locate living accommodations. This reimbursement includes meals, lodging, and transportation.

In some instances, you may wish an additional family member(s) to accompany you on this trip or someone other than your spouse. In such cases, approval by Human Resources would be required. We also realize that it can be difficult to house hunt with children. In these cases, reimbursement of up to $50 per day will be made for baby-sitting charges which may be incurred due to your travel provided that the services are not rendered by a family member.

A limitation of two trips not to exceed ten days combined is allowed. Any additional travel that may be required will be considered and is at the discretion of the Company.

Arrangements for these trips should receive prior approval by Human Resources, and all accommodations should be booked through the in house travel department.

Movement of Household Goods
The Company will contract with a moving van lines to provide services to you at a discounted rate.

The type and extent of assistance in relocation of an employee’s household goods is as follows:

1. Shipment of Household Effects

   The cost of normal household moving service from the former permanent residents to the new residence.

2. Packing and Unpacking

   The cost for normal moving services including packing of normal household effects for shipment and unpacking and placement of household goods at the new residence.

3. Valuation

   The Company will pay for full replacement valuation at released value of $3.50 times the shipping weight. If the coverage is determined by you as not sufficient, additional coverage can be purchased at your own expense.

4. Shipment of Personal Vehicle

   The cost of normal move via moving van or auto carrier for one personal vehicle from the former permanent residence to the new residence. See “Moving to New Residence.”

5. Storage of Household Goods

   The normal cost of storage during the period you are in temporary housing.

6. No assistance will be provided for the following:

   1. Moving or shipment of items such as livestock, boats, shrubs, construction materials, additional cars, or similar items requiring special handling.
   2. Removal or installation of permanently fixed items such as lighting fixtures, fencing, patios, fireplaces, etc.
   3. Assembly or disassembly of swing sets, pool tables, waterbeds, outdoor fixtures, appliances, etc.
   4. Purchase of fixtures, appliances, equipment or materials for new residence.
   5. Tips or gifts to moving company employees.
   6. Any services performed by you, your dependents or relatives.

Moving to New Residence
You will be reimbursed for reasonable and actual expenses incurred for the cost of meals, lodging and travel (limit of two (2) cars at the then current IRS limit per mile) or coach air transportation. With prior approval, the mileage allowance may be applied to commercial shipment of the automobile(s).

Sale of Residence by Employee
If you choose to sell your primary residence, you will be reimbursed for the following costs, including but not limited to:

1. Real estate commission (limited to prevailing local rate, but not to exceed seven percent (7%). If you should sell your home without a real-estate agent, you will receive 2% of the selling price as a bonus.
2. One real estate appraisal (to be arranged by the relocation company).
3. Reasonable attorney’s fees.
4. Real estate transfer taxes.
5. Title survey costs.
6. Legally required inspection fees (if paid by seller).
7. In cases where seller discount points are required for FHA or VA loans, the Company will pay half (1/2) of the seller discount points required.

No reimbursement will be allowed for cleaning, maintenance, or repair costs.

Purchase of New Residence by Employee
If you previously owned a primary residence and you choose to purchase a residence to be used as your primary residence at the new location, you will be reimbursed for customary buying cost, including but not limited to:

1. Reasonable attorney’s fees.
2. Mortgage applications and credit rating fee.
3. Cost of building inspection, plot survey, and termite inspection, if required by mortgage lending institution.
4. Title insurance premium (only if specifically required by state statute or mortgage lending institution).
5. Recording fees and property tax transfer.

No reimbursement will be allowed for the following:

1. Installation of appliances or equipment.
2. Home cleaning or repair costs.

The above listed reimbursement for the purchase of a home will be valid for 3 months from the date of your relocation to the new area as defined by the Company.

Reimbursement for Loss of Security Deposit
If you are a renter, you will be reimbursed for penalties associated with early lease termination of a rented apartment or house, not to exceed one (1) month’s rent, after attempts by you and the Company have failed to have the penalty waived.

Miscellaneous Relocation Allowance
To help you offset the cost of the many miscellaneous costs incurred in a relocation, you will receive a lump-sum payment equal to 100% of the new monthly assignment salary up to a maximum of $6,000.

This allowance is provided to you in a lump-sum payment once final approval by management for the relocation is received. This payment offers you the flexibility to use the funds for interim living and other incidental moving expenses as listed below.

Examples of expenses for which this allowance is provided are as follows:

• Interim living expenses at the new location, including meals and lodging, until the new residence is occupied.
• Car rental, laundry, telephone and other incidental expenses incurred during interim living.
• Charges for disconnection, reinstallation and/or alteration of draperies, carpets, television antennas, etc.
• All incremental costs for all special service requested by the transferee, as outlined under Movement of Household Goods.
• New automobile license plates and drivers’ licenses required as a result of an interstate move.
• Telephone installation charges.
• Cleaning costs at the former residence and any cleaning cost which may be incurred at the new residence.
• Conversion of television set frequencies, retuning of piano.
• Interest charges on bridging loans personally obtained by new employee.
• All structural changes and/or repairs to the new residence.

Receiving the Miscellaneous Relocation Allowance in a lump-sum permits you to manage the amount to your best advantage in paying for such expenses. No amount in addition to this lump-sum (other than specifically called for in other sections of the Relocation Policy) will be provided.

Income Tax Adjustment
Many of the items reimbursed or paid to you under this policy are considered taxable income. The total sum of these items subject to taxation will be determined and that amount will be “grossed-up” at a flat rate of 34%. This adjustment applies toward applicable state and federal payroll taxes.

Other Items
In addition to the above reimbursable items, the Company has arranged for the following services to be provided to you free of charge: employee information package on the new area, telephone counseling, relocation kits, realtor and rental assistance, home marketing assistance, spousal employment assistance, and assistance in finding other special services (i.e., child care, special medical facilities, elder care, etc.).

Before any reimbursement is made under this policy, you will be required to sign a Promissory Note requiring you to reimburse the Company for any relocation expenses paid if you should voluntarily leave the employment of the Company or be released from employment for cause, including poor performance, within twelve (12) months of relocating.

INSTRUCTIONS FOR COMPLETION OF RELOCATION EXPENSE ESTIMATE FORM

Data Needed for Estimate:

1. Market value of present home – indicate dollar value you plan on marketing your home for.
2. Balance due on mortgage – list dollar amount due on current mortgage loan.
3. Broker’s commission in your area – list current percentage rate on broker’s commission.
4. Price range of home you expect to buy – indicate price range in which you expect to buy a new home.
5. Expected equity in new home – dollar amount you plan on investing into your new home.
6. Expected time to sell old home – indicate number of months you expect your home to be on the market before it is sold.

Projected Expenses:

1. Movement of household goods – the average household (6 to 7 rooms of furniture) will cost $6,000 to $7,000. Those employees with an above average household should contact Human Resources to arrange for an estimate.
2. Broker’s Commission – if not known, use the average of 7% – indicate dollar amount.
3. Closing Costs (old home) – if not known, use 2% of the market value of present home (dollar amount).
4. Closing Costs (new home) – if not known, use 3% of the highest price range you expect to buy a home (dollar amount).
5. Relocation Allowance – 100% of new monthly salary.
6. Other – list those expenses that are not outlined above.
7. Tax Gross-Up – take the total amount of taxable items of the relocation, times .34% and indicate that number.

RELOCATION EXPENSE ESTIMATE

Name:
Employee No.:
Social Security No.:
Relocation From:
To:
New Salary:
Approx. dates of relocation:

Data Needed for Estimate:

1. Market value of present home:
2. Balance due on mortgage:
3. Broker’s commission in your area:
4. Price range of home you expect to buy:
5. Expected equity in new home:
6. Expected time to sell old home:

Projected Expenses:

1. Movement of household goods:
2. Broker’s commission:
3. Closing costs (old home):
4. Closing costs (new home):
5. Relocation allowance:
6. Other:
7. Tax Gross-up:

Total:

Is this move budgeted:

Approvals:

Reprinted with permission from “Exhibit Book of Employee Relocation Policies,” Watson Wyatt Data Services, 2000. For more information, visit www.wwdssurveys.com or call (201) 843-1177 and ask for Customer Service.