What has happened to "we will make you whole"?

December 15, 2016

Most companies today are taking extra care to make sure no such statements are made. Here is why....

1) Inconsistent Interpretation Between Parties: Rarely is this defined any further. Therefore, due to this lack of definition, very frequently a company is obligated to more expenses than anticipated or under other circumstances would agree to. Many of which are unknown or not discussed at the time of this promise. To name a few we have seen: home resale values that cannot and will not recoup capital improvements; or equity loss due to value decline and/or excessive refinancing prior equity “take out”; shipment of multiple cars and/or boats; loss of income from a spouse’s business that had to be closed.

2) Not Defensible: Even if every expense to the transferee is reimbursed, most relocation expenses are taxable income. And, while a full tax gross-up may be offered, a transferee who files his/her taxes will likely be in a higher tax bracket, and still “owe more”; especially if the spouse is employed.

3) High Risk: Higher Company Costs and Lower Transferee Satisfaction: No one wins on such promises. No one is really happy. Resentments are created that are never forgotten.

Best practice is to consistently use words on all verbal communication and written policies or offer letters that clearly represent what is intended....we will “assist you” and “will cover many of your expenses related to your relocation”.

-The Team at HR&Relo Advisors

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