Help with Relocation Packages
bgreene
56 Posts
We are a small company (50 employees) and we want to set up a relocation package for employees that transfer out of state. What do most companies do lump-sum payments? Any reference as to where to go to find this information or what to do is desperately needed.
Comments
1. All moving expenses. They package everything up (including the trash), load it and unload it on the other end.
2. Two trips to the new city to help find a house.
3. Purchase of the old house based on the average of two appraisals. The company picks one and you pick one.
4. All expenses while moving (lodging, meals, gas, etc.
5. Temporary housing (got an apartment for 6 months while the kids finished school. Included maid service and a per diem for meals, etc.
6. Trips back to family every weekend until the move.
7. Club memberships in new town to help get settled in.
There were some others that I don't recall at this point, but I think the above were the bigger ticket items.
Covering the current cost of the ee's rent until the move is completed (ee is staying in state until graduation from college, but closed on a house this month, so we are covering the cost of the lesser residence).
Advanced $$$ for a 401K loan until the funds were distributed.
That is pretty much it. The position we are relocating is for COO, so the package is what I would consider generous for a small co. w/ less than 50 ee's.
1. Relocation only available at Director level or above, to include Vice Presidents, Department Heads and Senior Engineers.
2. Reimbursement of the reasonable and usual costs associated with the sale of a primary residence (exact wording), to include up to 3% commission on sale, taxes and inspections prior to sale and all closing costs charged to the seller. (We always 'grossed up' this amount in accounting to compensate the employee for the taxes he would have to pay on this income).
3. Two househunting trips for spouse using airline chosen by company.
4. (Negotiable) Up to four months housing costs paid with normal paycheck at the rate of $1500 per month for temporary living expenses.
5. Three bids to be submitted by employee from reputable moving firms chosen by employee for the movement of household goods. Company will select the mover and approve directly and will make payment to mover. Employee to handle all moving arrangements with mover. (excluded certain items like tractors, outbuildings, and a few other things)
6. Shipment of one personally owned automobile from primary residence to corporate office by common carrier to be arranged by company.
7. Depending on the situation, we would also pay for round trip tickets back home for the employee approximately every other weekend.
8. We learned the hard way at my last company to state in the offer letter something like this: It is understood and agreed that the employee will move household goods and establish residence in (city) no later than (x) months following date of hire.
9. If employee terminates employment voluntarily for any reason within 24 months of accepting employment, he aggrees to refund total moving expenses to company.
10. If company terminates employee within 24 months for reason other than cause, company is responsible for reverse relocation.
11. We always state an end date for acceptance date at which time the offer is void.
I would also always send a package to the home which included things from the chamber of commerce, video tape provided by economic development, pamphlets, etc.
I think that's about it.
Includes flying person in for interview (also pay for spouse) and their expenses. Fix them up with a realtor so they can see the area and what types of housing might be available. In the case of a physician, we may pay for more than one trip, just depending on the situation.
We usually give a flat $5,000 in relocation expenses. They can move however they wish - by moving van, U-Haul, etc. The difference in what their actual expenses were vs. the $5,000 is taxable income to them which they are responsible for.
We usually give what we call a "sign-on bonus" to for certain individuals coming from out of state. This is taxable income in their first paycheck.
We usually don't have anyone at the level that we give relos to leave very soon, but it could happen. We don't have any provision for repayment. If it was more than $5,000, we probably would put this provision in...but I am sure it would cost more than this trying to collect it from a reluctant individual.
We also send a packet of info to people who are interested in interviewing with us. This includes school information, housing information, cost of living, etc.
Over the last three years we have brought seasoned Farm Managers in from the outside and they all have their own way of doing things and we the company want it done our way. They have all promised to do it our way only to turn to their way and the pressure gets hot. When it is to HOT, THE MANURE STARTS TO HIT THE FAN AND THE MANAGER WILL BE GONE ON TO THE NEXT FARM OPPORTUNITY 9 THAT IS THE NATURE OF THE BEAST). It is a night mare for me, but we are growing our own now and getting fresh college graduates right out of the local college for $26,000.00 a year and no relocation required. We now have three just about ready to go.
JUST ANOTHER SIDE OF THE ISSUE!
pork