In developing specifications for a new, outsourced provider, it is best to begin with an evaluation of your current employee mobility process and policies, and a frank assessment of how well they meet the needs of your internal customers (recruiters, managers and relocating employees). You will probably identify aspects that are working well, and that you want the outsourced provider to continue, and others that could be better. Documenting and clearly articulating your needs, expectations and goals will make it easier to evaluate relocation companies and to determine the parameters of the outsourced program. Read More
Category: U.S. Relocation
In the past, many companies relocated employees only occasionally. Typically, these relocations included limited benefits and a narrow range of locations, so it was relatively simple to administer the program and manage a small group of local suppliers in house. Today, global relocation brings so many program, tax and legal considerations that outside expertise is an essential component of administering successful domestic relocation and international relocation packages. Outsourcing global relocation can bring companies several benefits:
Specialized Executive Relocation Expertise
The specialized expertise of full-service relocation management companies is a key reason that companies outsource. Relocation management companies like TRC Global Mobility offer a complete suite of executive relocation services and broad geographic coverage. Experienced relocation providers bring policy consulting expertise and knowledge of relocation best practices and tax and legal requirements. This expertise can help companies to ensure their policy is as competitive and cost-effective as possible—and create time for the company to focus on core business priorities. Read More
Worldwide ERC just issued the following statement regarding the Supreme Court’s decision to allow a partial travel ban to take effect.
Arlington, VA— On June 26, the U.S. Supreme Court issued an unsigned order to allow the implementation of parts of an executive order signed by President Trump to temporarily suspend foreign nationals from six countries from entering the U.S. Based on the facts of the case, the Court formed a distinction between nationals who have “a bona fide relationship with a person or entity in the United States” and all other foreign nationals. The Court upheld the suspension of the ban for foreign nationals who have such a relationship, including individuals employed by a company in the U.S. Read More
Because the tax aspect of any relocation is so important, clear and continual communication with the transferring employee is essential. A transferee should never be surprised at tax time with a large and unexpected payment due to the IRS. It is the responsibility of the transferring employee to understand the tax implications of each relocation benefit, but it is incumbent upon the employer and the Relocation Management Company (if one is involved in the process) to ensure that the tax implications of benefit usage are fully explained to the transferee verbally and in writing. Read More
To facilitate a relocation, many employers offer home selling assistance to homeowner transferees. Home sale assistance can come in various forms; however, the IRS specifically calls out the Amended Value (AV) program as the favored method in terms of compliance.
An AV program allows the transferee to market the property and attempt to find a buyer before the employer acquires the property and takes it into inventory. If the transferee finds a buyer, he sells the home to a third party Relocation Management Company (RMC) for the agreed-upon price, and the RMC, in a second and separate transaction, sells the property to the buyer for the same price.
Arguably, the most complicated discussions surrounding domestic relocations involve the tax piece. For any domestic relocation expenses to be qualified as tax deductible, there are a few requirements that must be met, including:
- The move must correlate with the start date at a new job location
- The employee must be employed full time for 39 weeks during the 12-month period following the first day of work in the new location
- The new place of work must be 50 miles farther than the commute from the old residence to the old place of work
- The expenses must have been incurred due to the move
- Only reasonable expenses are deductible
- There is no limit on the dollar amount of deductible expenses
For years, comprehensive immigration reform has moved through the U.S. House and Senate in stops and starts. The new administration has signaled a more aggressive stance on immigration right out of the gate, and Congress is expected to take up comprehensive immigration reform once again. In the meantime, a great deal of uncertainty will cloud the process for companies and candidates alike.
Talent knows no borders.
With more and more companies looking for creative ways to save money, many have turned to their relocation policies for areas in which to cut costs. One trend that has gained in popularity recently is the temporary domestic assignment (TDA).
The IRS defines a short-term assignment as one that lasts for less than one year. This is a very important distinction because the benefits change from non-taxable or deductible to taxable at the one-year mark. Companies that provide relocation tax assistance can save a considerable amount of money by not having to pay taxes on the benefits. Read More
Companies benchmark their employee relocation policies to analyze process performance, evaluate their program against their competitors’ or to measure their program against their own divisional or location-related best practices.
If you have a mobile workforce, benchmarking your domestic and international relocation policies against the competition and other selected companies is critical, and your relocation management company can be a great help. Relocation management companies use technology to capture and evaluate data across many clients. They evaluate this data and share their insights with clients who are assessing their mobility programs. Read More
We expect to experience some degree of culture shock in global moves, and often provide cultural training to help mitigate it. But culture shock is rarely acknowledged for moves within the same country, and support to manage it is even rarer. Since neither companies nor relocating employees expect domestic culture shock, the situation becomes even more confounding. Read More