Whether you’re creating your first corporate relocation policy or reviewing an existing one, it’s essential to get it right. An effective relocation policy is both concise and comprehensive. It tells employees everything they’ll need to know about their relocation benefits, in clear, easy-to-understand language.                                          

And while there is a wide range of relocation plan structures—lump sum, managed benefits, core/flex and fully-covered—every relocation policy should answer these four universal questions.

Who Is Eligible?

Obviously, the fact that you’re offering a candidate or potential transferee a copy of your relocation policy is a pretty good indication that they’re eligible for benefits. That said, it’s still necessary to define eligibility in your relocation policy.

For many employers, eligibility is defined as: a full-time employee (including a new hire) offered a position in a location at least 50 miles farther from their current home than their current worksite.

Most definitions also include a reference to the employee’s dependents—i.e., family members claimed on the employee’s tax return who will relocate, too.

What’s Covered?   

The heart of any relocation policy is the section on covered benefits and services. This should not only spell out all the covered services but the maximum payable benefit(s). Regardless of your relocation plan, most relocation policies include references to these key expenses:

• Moving services – The cost of transporting household goods to the new home, usually via moving companies.
• Transportation – Such as plane tickets or car travel used to transport employees and their dependents to their new homes.
• Home buying and selling – This usually covers closing costs—or comparable expenses for renters.
• Home-finding trip(s) – Including travel costs, hotel stays and a meal allowance. Some policies specify the number of trips and/or days covered.

Some policies also cover:  

• Short-term housing – To temporarily house newly-relocated employees while they’re waiting for their closing or move-in date. (It also includes short-term storage of household goods).
• Destination services – Generally provided with international moves, this provides services designed to help employees and their dependents acclimate to a new location—such as language and cultural training.

Because relocation benefits are taxable to employees, it’s also really, really important to specify if you’ll be paying relocation tax gross-ups, and if so, how it’s calculated. (Tip: failure to provide a tax gross-up greatly detracts from the employee’s relocation experience—but failure to disclose it upfront is even worse.)