4 Common Myths About Intern Relocation Policies

Internships shouldn’t be considered a real relocation. True or False? False!

This is a common myth about interns. Although interns aren’t moving permanently, they're still employees who are moving to a new location for work and therefore, should be considered transferees.

It's up to your company whether you provide benefits to assist with that relocation. If you're managing an intern program or are planning to in the future, there are a few common misconceptions around intern relocations you should be aware of. Understanding the nuances of intern relocations will help ensure you’re providing valuable benefits that result in a successful relocation, and ultimately a successful internship experience.

Let’s take a look!


1. You don’t need an intern relocation policy.

One of the most common misconceptions about intern relocation policies is that you don’t need one at all. This is a common mentality for a few reasons. Some companies feel that interns don’t need relocation resources because they’re not moving permanently. Others may feel it’s just easier and faster to handle each intern relocation in as a one-off scenario. Still others don't give it much thought until the last minute, and then leave interns to figure it out on their own.

The reality is, interns are an ideal population for a relocation policy. For starters, they're eager to get started working and often just as eager to start planning their move. However, it’s likely that this is their first time moving on their own and they need for guidance — where to live, how to get there, even what to pack.

If you don’t provide a structure for them to follow, they may get overwhelmed by the details. A relocation policy that clearly provides the what, when, and who of relocation will help them channel their energy and excitement towards planning and managing their move. Intern policies can be even more direct than full-time policies - detailing what benefits they receive, when they can expect to receive them, and who to reach out to with questions.


2. Interns can just use your full-time relocation policy. 

On the opposite end of the spectrum, another myth is the assumption that interns can simply leverage already existing policies designed for full-time relocations. While this is easy (you don’t have to create any new documents), it’s not necessarily the best use of resources for you or your interns.

First,  you could be overspending on interns if you're providing the same relocation policy a full-time hire gets. The worst part is that you’re not only overspending on intern relocations, but the value your interns get from these policies is marginal.

4 Common Myths About Intern Relocation Policies

For example, let’s say your new hire, full-time policy includes $7,000 for shipment of household goods and $1,000 for final travel. While your interns may need to pay for travel, they probably won’t need $7,000 to move their belongings because they typically:

  1. Don’t own nearly as much, and
  2. May only be moving a small portion of it for the 3 months they're living in another city.

This results in you spending more money than needed to relocate intern and your interns looking for other places to spend the money.

Instead of simply providing the same policy to your full-time hires and interns, consider making an intern policy that’s a scaled down or mini-version of your other policies that takes into considerations the unique needs of an intern relocation. For example, you may still give your interns direct bill benefits, but instead you may choose to cover short-term housing instead of the shipment of household goods. This approach can help you ensure that you’re not overcompensating your interns and are giving them benefits that are valuable to them and their situation.

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3. A lump sum is sufficient for an intern policy. 

Many companies with an intern policy in place choose to provide a lump sum. Lump sum benefits are easy to administer and puts interns in control of how they spend their money. However, there are also drawbacks to this approach that may have big impacts on the success of your interns relocations.

If an intern is provided a lump sum with no guidance, he or she may be left with lots of questions about what to do with the money. How much should go toward short term housing or rent vs. covering the cost of moving their belongings? How much should they save to book their final travel home? Providing guidance around how to spend the money is critical if you plan to provide interns with a lump sum benefit. If given some direction, they'll be able to execute their relocation in the best way possible.

There are alternatives to offering a lump sum that not only provide more structure for the transferee, but can also help you save money.  

For example, instead of offering a $6,000 lump sum, let’s say you break that into direct bill benefits for short term housing and final travel. Your interns can spend up to $5,000 for short term housing and have up to $1,000 to spend on final travel. Your intern's primary needs are covered, and whatever they don’t spend stays with your company.

This also ensures that your interns are using the funds appropriately and your company is only paying for what the intern is invoiced for. You may still need to provide education and guidance, but the risk that an intern misspends their money or forgets to budget for certain expenses is minimized.


4. Intern benefits aren't taxable. 

Closeup portrait of anxious shocked, stressed worried young couple, man, woman holding piggy bank, looking scared, protecting savings from being stolen, isolated on white background. Negative emotionsFinally, the last misconception about interns is that their relocation benefits aren't taxable. Unfortunately, basically all compensation is taxable, so you need to account for that in your intern policies. Whether lump sum or managed benefits, any relocation assistance provided is considered taxable income.

It's important to plan for, and explain to your interns, how this is going to be managed. If you gross-up taxes as a benefit to your employees, you'll need to gross-up household goods shipment, in-transit storage, and final travel as well. If you're not grossing-up, you should to let your interns know that they will have tax implications associated with their relocation benefits.

Remember that interns are not only new to moving, but also new to the professional world. They may have never filed their own taxes before and any forewarning you can give them about added taxes will help them prepare and budget appropriately. Although they may not be excited to pay these additional taxes, they'll appreciate you giving them the heads up.

Interns have a number of factors that make their relocations different, and sometimes more difficult, than full-time hires. Understanding the unique aspects of intern relocations, and the myths that surround them, will help you better serve your intern population, leading to a better relocation and a better intern experience.

Human Resources Today