From our home to yours and your transferees’, Quicken Loans® is with you.
Recent enactment of the Tax Cuts and Jobs Act of 2017 will have a profound impact on the relocation budgets of employers. Payment of qualified moving expenses, which have provided a nontaxable benefit since 1986, will now cause a significant rise in relocation spend should employers choose to provide tax assistance for these expenses going forward. Program administrators may find themselves under increased pressure to cut costs where they can. Add this increased cost-saving mentality to the continued migration of relocation programs toward plans managed primarily by employees, and employers might be heading for unforeseen consequences.
The drivers of change to a self-managed program are pretty well-known:
Often, the attempt to empower the employee with the freedom to choose their own benefits in their own fashion creates unknown and unforeseen consequences to the employer.
Have employers thought through the company exposure when an employee’s self-directed activities go wrong? Are they assured that the company is not being needlessly exposed to various areas of risk—exposure not only to a company’s duty-of-care axiom, but also to various workers’ compensation claims derived from employees carrying out work-related directives?
Let’s look at three common areas in which a growing number of employees either manage or take on the responsibility for the relocation benefit.
According to the Pew Research Center, 53 percent of individuals moving to a new city used the internet, and 60 percent reported they rely on the internet more heavily than other means. But not all internet information is accurate, and some can be misleading.
To get an accurate picture of costs, buyers should consider that schools, taxes, zoning laws, or transfer fees may all cause surprises. Real estate brokers, the boots on the ground acting as the transferee’s advocate, can ensure that these items will meet the transferee’s expectations. Not only are brokers a valuable resource for transferees, but they also protect the best interests of the employer sponsoring the move. They explain and help the transferee follow the corporate policy and help maximize available benefits, even for “free-to-use-as-you-wish” lump-sum programs. Helping to buy smart will minimize problems down the road if the employee is transferred again.
Use of qualified brokers will also remove the potential lost revenue an employer expects to earn when referral fees are relied upon to underwrite the cost of the program or pay for other benefits. Transferees acting on their own are unlikely to have an understanding of their employer’s revenue expectations, and fewer are likely to understand actions that interfere with the payment of referral fees. Employees who go rogue and make a “first contact” with a broker of their own choosing can very well prevent the employer from achieving its objective.
We’ve all done it—starting with college, then our first apartments, starter homes, and our second home. But when thinking about moving yourself, consider this: According to the Bureau of Labor Statistics (BLS), muscle sprains, strains, and tears accounted for half of all occupational injuries resulting in workers missing days on the job. You might not lift things for a living, and there are many ways to injure yourself and your property.
Back injuries were the most common—a result of improper lifting techniques or lifting items too heavy for one’s back to support. Consider how many repetitive lifts go into moving boxes from a dwelling into a truck or trailer and then positioning them within.
It is easy to lose control when items you are lifting are bigger or heavier than you. Large objects may fall, tip, or swing, possibly not only causing injury but also easily causing damage to the piece or the dwelling. Large furniture and appliances that damage doors, floors, and walls can change your simple move into a costly venture.
The popularity of homes rented directly from owners is well-known, and growing.
According to Consumer Reports, home-sharing sites have created a $100 billion economy with millions of people listing their dwellings,or rooms within, to generate income.
Consumer Reports shares that in 2009, when Airbnb was founded, travelers booked 21,000 stays through its website. In seven years this figure grew to 80 million bookings in 2016—a 3,800-fold increase.
All these services have their place. Demand for authentic experiences and unique accommodations contribute to their popularity, but keep in mind that, like Uber and Lyft, these are actually technology companies. Their business is connecting people wanting something with someone having something to give. The sites do not provide accommodations, nor do they maintain accommodations. They do not control ownership, management, or safety of the accommodations.
This is an industry built on trust: trust that the host is the property owner with a right to rent the dwelling, that doing so doesn’t limit or negate the insurance the host carries on the property or violate local zoning laws or HOA restrictions against rentals, or violate transient laws enacted by municipal authorities; trust that the pictures and reviews are legit; trust that you and your employees are in a safe location and in a safe dwelling.
Employers have a duty of care to their employees, which means they should take all reasonable steps to ensure health,safety, and employee well-being. Demonstrating such a concern should not be seen merely as a legal duty, but as a sound business case as well. It is key to building trust within the mobile workforce, improving job satisfaction and retention, and boosting productivity.
This information is excerpted from an April 2018 Mobility magazine article.
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