HRM-047: Provision of Moving and Relocation Assistance for Newly Hired Faculty or Staff

Date: 03/20/2005 Status: Final
Last Revised: 09/03/2019
Policy Type: University
Oversight Executive: Vice President and Chief Human Resources Officer
Applies To: Academic Division, the Medical Center, and the College at Wise.
Reason for Policy:

The University of Virginia is committed to recruiting and retaining high quality personnel by providing competitive benefits and compensation. In some instances, this may include providing equitable moving and relocation assistance to cover personal moving, relocation, and employment expenses. Additionally, the policy assists the University in complying with applicable Internal Revenue Service regulations regarding the tax treatment of moving and relocation expenses provided on behalf of employees.

Definition of Terms in Statement:
  • Designated Hiring Official:

    An individual who is authorized to extend a conditional offer of employment to individuals on behalf of the University. The president, vice presidents, academic deans of the University’s schools, and the University librarian are designated hiring officials. Hiring authority may be delegated in writing by one of these individuals with the approval of the president or the appropriate vice president.

  • Moving and Relocation Assistance:

    Payment(s) made as a taxable benefit to or on behalf of an incoming employee to assist with their personal moving, relocation, and employment costs. This is intended to cover house-hunting costs; packing and transporting household goods, furnishings, and personal effects of the employee and members of the employee’s household; and transportation and lodging for the employee and members of the employee’s household while moving. The Moving and Relocation Assistance is the total amount authorized to be paid for the employee's relocation costs.

    • Household Goods:

      Furniture, appliances, and other items used for furnishing and maintaining a residence.

    • Personal Effects:

      Privately owned personal property such as vehicles, clothing, household goods, books, etc., that are movable.

Policy Statement:

Moving and Relocation Assistance may be provided to or on behalf of an individual who has been newly appointed to or hired for a full-time faculty or staff position (hereafter referred to as an employee) if authorized by the School/Unit/ Department Head or Designated Hiring Official (hereafter referred to as Hiring Official) in accordance with this policy. Any amount provided to or on behalf of an employee for moving and relocation expenses is treated as taxable income.

The employee Moving and Relocation Assistance does not apply to: (1) an individual hired into a temporary, wage, or student position; and (2) a situation involving the establishment or relocation of professional labs, libraries, supplies, and equipment of faculty and researchers. Such payments, if any, must be paid directly to suppliers through existing University purchasing and accounts payable processes.

[NOTE: This policy only applies to Moving and Relocation Assistance and is not intended to cover or impact other hiring incentives (e.g., signing bonuses or deferred compensation) that may be offered to a new employee as part of a hiring package.]

  1. Moving and Relocation Assistance:
    At the discretion of the School/Unit/ Department Head or Designated Hiring Official, the University may (1) within one year of the employee’s first day of employment at the University provide Moving and Relocation Assistance to cover personal moving, relocation, and employment costs directly to the employee or (2) at their sole discretion and risk, elect to incur moving and relocation expenses on behalf of an employee as provided below.

    In determining the appropriate amount of the Moving and Relocation Assistance, the Hiring Official should consider such factors, including but not limited to, the availability of qualified candidates, the skills and qualifications of the candidate, the difficulty of recruitment, and whether doing so provides incentive for the individual to accept the position.

    If Moving and Relocation Assistance is provided, it must be:

    • Authorized in advance.
    • Directly related to the commencement of employment at UVA.
    • Documented in a Moving and Relocation Agreement with the employee and a copy maintained in UVA files.
    1. Paid Directly to the Employee:
      The Moving and Relocation Assistance will be paid to the employee in one lump sum in the paycheck following the employee’s first day of employment at the University. The Moving and Relocation Assistance will be reported as taxable income to the employee with appropriate federal and state taxes withheld.

      The Moving and Relocation Assistance payment (net of required taxes withheld) is generally paid in the first paycheck after the employee’s first day of employment at the University.

      1. Access to the University’s Moving and Relocation Service Contracts:
        An incoming employee may, at their sole discretion, elect to access the University’s negotiated service levels and rates with contracted third-party relocation and storage service suppliers. Use of these contracts is not required.

        The existence of these contracts does not constitute an endorsement of the supplier by the University; nor does the University make any representation that the negotiated rates are the best rates available. The employee is encouraged to use due diligence in selecting a moving and relocation company.

    2. Paid on Behalf of the Employee:
      A hiring department may elect to purchase moving and relocation services provided by a contracted supplier. In such cases, the department coordinates with the contracted suppler and new employee. The contracted supplier bills the University for relocation-related expenses, through standard University procurement process (see FIN-030: Purchasing Goods and Services). The department is responsible for review, approval, and payment of the expenses. There is no cash outlay to or by the employee at the time the expense is incurred (i.e., when the service is provided).

      The incoming employee’s manager (or designee) must report the total value of all expenditures made to a supplier on behalf of the employee in Workday (i.e., as non-cash, taxable compensation) (1) within one month of the employee’s first day of employment at the University; or (2) for services provided after the employee’s first day of employment at the University, within one month of the date the expense was incurred by the department. Payroll Services will withhold applicable federal and state taxes from the employee’s next paycheck(s).

  2. Moving and Relocation Assistance Thresholds:
    The authorized Moving and Relocation Assistance is determined for each prospective employee on a case-by-case basis. While there is no standard amount, employment negotiations should result in an equitable amount necessary to recruit the employee to UVA by giving due consideration to University budgetary and funding constraints.

    The monetary threshold for Moving and Relocation Assistance must not exceed twenty thousand ($20,000) dollars. Additionally, a household move must be greater than fifty (50) miles to qualify for this Assistance.

    1. Exceptions:
      An exception may be made in the following instances:

      • Moving and Relocation Assistance in excess of twenty thousand ($20,000) dollars and/or for a move of less than fifty (50) miles requires prior approval by the Vice President and Chief Human Resources Officer or designee. The hiring School/Unit/Department is responsible for securing in advance the funding source(s) to support the authorized payment.
      • Faculty members subject to time-limited appointments in residential locations (i.e., faculty members who are required to live on Grounds for a predetermined period of time and thereafter return to their local residence) will be eligible for Moving and Relocation Assistance at the discretion of the appropriate School/Unit/Department Head or designee. The School/Unit/Department is responsible for securing the funding source(s) to support the authorized payment.
  3. Dual Employment:
    If the employee's spouse is also an incoming University employee and otherwise eligible for Moving and Relocation Assistance, expenses for the move of the primary household is paid to or provided on behalf of one (1) employee only.

  4. One-Year Employment Requirement:
    The employee must remain employed on a full-time basis with the University for at least one (1) year, beginning on the date that the employee starts their employment at UVA.

    1. Voluntary Termination of Employment:
      If the employee voluntarily ends their employment with the University or engages in behavior that makes termination of employment necessary prior to the obligated one (1) year of service, the employee must repay the University the prorated gross amount of the Moving and Relocation Assistance, i.e., actual payments that were received by or paid on behalf of the employee. (This includes payments to third parties on the employee's behalf, plus all taxes deducted that relate to those payments.)

      The amount to be repaid is prorated on a monthly basis such that for each full month during which the employee remains in the employ of the hiring School/Unit/Department, the amount to be repaid is reduced by one-twelfth (1/12) of the gross reimbursement. For Faculty appointed on an academic year basis, one (1) year is defined as two (2) concurrent regular academic sessions of fall and spring or spring and fall semesters equal to nine (9) months of employment.

    2. Repayment:
      The School/Unit/Department must notify Payroll Services when the employee has left the University prior to fulfillment of the one-year requirement (see Procedures). If Payroll Services is unable to collect the amount owed, it must refer the debt to Financial Reporting and Operations to be processed in accordance with policy FIN-005: Extension and Collection of Credit.

    3. Involuntary Termination of Employment:
      Termination of employment as a result of layoff, disability separation, or for other reasons as determined by the Executive Vice President and Provost or Vice President and Chief Human Resources Officer (or respective designees) does not require repayment of the Moving and Relocation Assistance.

  5. Notification Requirements:
    1. Appointment or Offer Letter:
      The Hiring Official must include information regarding the taxability of the Moving and Relocation Assistance to the prospective employee in the appointment/offer letter.

    2. Moving and Relocation Agreement:
      A Moving and Relocation Agreement must be executed and include:

      • Notification of the repayment provision as set forth in this Policy;
      • A statement that failure to repay the Moving and Relocation Assistance provided directly to the employee or to third parties on behalf of the employee may result in legal action being taken against the employee to recover such funds; and
      • A provision wherein the employee agrees to pay all collection costs including attorney fees and other charges necessary for the collection of any amount still due to the University.
  6. Roles and Responsibilities:
    School/Unit/Department Heads and Designated Hiring Officials are responsible for:

    • Deciding whether to offer Moving and Relocation Assistance.

    • Communicating information to the employee regarding taxability associated with the Moving and Relocation Assistance through the appointment/offer letter.

    • Identifying appropriate School/Unit/Department funds to cover the full cost of the Moving and Relocation Assistance.

    • Executing a Moving and Relocation Agreement with the employee and maintaining a copy.

    • Submitting all Moving and Relocation Assistance, whether cash or non-cash, through Workday to initiate payment (cash only) and tax withholding (cash and non-cash) by Payroll Services.

    • Immediately notifying Payroll Services if the employee failed to remain employed for the obligated one (1) year of service and the amount of the Moving and Relocation Assistance that must be repaid.

    University Human Resources is responsible for:

    • Making recommendations to Hiring Officials as to whether or not to offer Moving and Relocation Assistance and other considerations which may be unique to the individual employee.

    • Confirming the Moving and Relocation Assistance has been approved.

    • Communicating information regarding taxability of the Moving and Relocation Assistance in the written offer letter for staff hires and include any conditions on the acceptance of the Moving and Relocation Assistance (i.e., obligation to repay if a minimum term of service is not provided) such that by accepting the offer the employee explicitly agrees to the stipulated terms.

    • Communicating information regarding taxability, term of service, and repayment of the Moving and Relocation Assistance in the Moving Agreement for faculty appointments.

    • Entering offered and accepted Moving and Relocation Assistance if a fixed dollar amount has been provided into the University’s system of record so that it will be paid in the first paycheck after the employee’s first day of employment at the University with all applicable taxes withheld, based on the employee’s submitted W-4, Employee’s Withholding Allowance Certificate.

    Payroll Services is responsible for:

    • Processing the Moving and Relocation Assistance through the University payroll system as taxable additional pay using normal payroll procedures.

    • Immediately instituting payroll deductions for Moving and Relocation Assistance repayments due from the employee upon receipt of notification from the hiring School/Unit/Department that the employee failed to remain employed for the obligated one (1) year of service.

    • Referring a request to Central Accounts Receivable for collection when Payroll Services is unable to effect repayment of owed Moving and Relocation Assistance through payroll deduction.

    • Remitting all collected Moving and Relocation Assistance repayments to original funding source(s).

  7. Compliance with Policy:
    Failure to comply with the requirements of this policy may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies.

    Questions about this policy should be directed to the Solutions Center (UVA HR).

Procedures:

Moving and Relocation Agreement [link to be added]

Separation from Employment prior to Fulfillment of One-Year Obligation:
The School/Unit/Department notifies Payroll Services via email indicating:

  1. the employee did not meet the one-year of service requirement and
  2. the amount of the Moving and Relocation Assistance to be repaid to the University.
Related Information:

Moving and Relocation resources (University Human Resources)\
University suppliers providing Relocation and Storage Services (Procurement and Supplier Diversity Services)
FIN-005: Extension and Collection of Credit

Policy Background:

The Tax Cuts and Job Act of 2017 (Pub. L. 115-97) eliminated deductions for qualified (non-taxable) relocation expenses effective January 1, 2018. All relocation expenses, whether previously deductible or not, are now taxable to an employee if reimbursed or paid on their behalf.

Major Category: Human Resource Management
Category Cross Reference: Finance and Business Operations
Next Scheduled Review: 09/03/2019
Approved by, Date: Policy Review Committee, 07/24/2019
Revision History: Revised 9/3/19; Updated 1/19/18 to reflect change in tax law; Updated 5/18/17 (Contact Ofc), 4/20/12, 5/16/11, 8/2/10, 6/29/10; 2/18/08; 6/26/06.
Supersedes (previous policy):
FIN-013: Reimbursement of Moving & Relocation Expenses; VI.C.1, Moving Expenses; VI.C.2, Moving Expense Employment Agreement, Moving Expense Funding, Interview Expenses; VI.C.3, Moving Expense Reimbursement Limits; VI.C.4, Moving and Relocation Documentation, Moving Expense Reimbursement; VI.C.5, Moving Expense: Federal Tax Implications