9.14 Relocation Policy for Employees

Last Revised Date
Monday, May 14, 2018 - 2:00 pm

Policy Information

Policy Number: 9.14 Effective Date: 04/09/2018
Responsible Unit: FSO - Financial Management Last Revised Date: 05/14/2018
Email: fin-mgmt@fso.arizona.edu Phone: 520.621.9097

Purpose and Summary

To provide guidelines for instances where relocation costs are necessary for an individual to accept employment with the University and funds are provided to the employee or to a vendor on the employee’s behalf for allowable relocation expenses consistent with applicable regulations, good business practices and budgetary limitations.

Source

Internal Revenue Service
Moving Agreements
Arizona Revised Statues § 35-196.01

Scope

This policy applies University-wide, including Main Campus, the Arizona Health Sciences Campus, the Phoenix Biomedical Campus, and the University of Arizona – South.  In addition, this policy applies to all off-site campus units both domestic and international for household relocation expenses for all University benefits eligible employees.  

Definitions

  1. Household Relocation Expenses: Relocation expenses as defined below for the employee and their household members, those currently residing in the household that will be relocated to the new residence.
  2. Contracted Booking Agent:University contracted vendors with established moving agreement pricing offering highly discounted rates along with other benefits at no additional costs to the new employee relocating to the University.
  3. Research/Business Relocation Expenses: The cost of moving research laboratory or office equipment from an employee’s former employer to their place of work at the University of Arizona. Business moving expenses are paid separately and not included as part of the employee’s household relocation allowance.
     

Policy

Household Relocation Expenses

  1. The University may, in exceptional cases and at departmental senior leadership discretion, provide a moving allowance when relocation is necessary for an individual to accept employment with the University. Moving allowances must be negotiated at the time of offering a position and be included in the signed offer letter.
  2. In-State relocations must meet the distance test (50 miles from the employee’s former home) and must be reflected in the signed offer letter. The employee must be in a benefits-eligible employment position.
  3. Relocation of an existing employee is allowable in cases where the employee is reassigned and the relocation is in the best interest of the college/department. Based on the reporting structure of the unit, senior executive level approval is required and the relocation must meet University requirements:
    1. Distance – The distance between the employee’s new work location and the former residence must be at least fifty (50) miles greater than the distance between the employee’s former work location and the former residence.
    2. Time – The employee must work full-time at least thirty-nine (39) weeks during the first twelve (12) months after relocating.
  4. The University complies with the Internal Revenue Code for proper taxation and reporting of household relocation expenses. Moving allowance payments will have taxes withheld based on the employee’s selections on their Federal and State Withholding forms (Federal W-4 and State A-4).
  5. Pre-move house hunting expenses are inclusive in the moving allowance amount agreed upon in the employment offer and include any trip to the University of Arizona after the employee has been offered a position, whether or not accepted, but before the final move. The initial trip of the candidate to interview for the position is a qualified business expense and is not taxable.
  6. The move itself is solely the responsibility of the new employee. The contract for the move, along with any problems that may result from the move, is between the employee and the moving company. The University's only involvement is payment of the moving allowance to the employee. The employee must handle any and all claims.
  7. Expenses of the employee and/or his/her household members, after arriving at the principal site of employment, are the responsibility of the employee and considered inclusive in the allowance.
  8. As relocation expense is treated as an allowance, methods of payment outside of the payroll process are not allowed. Other payment methods that are disallowed include and are not limited to University Purchasing Card (PCard), Disbursement Vouchers (DV), payments on behalf of employees as well the Purchase Order process. 

Research/Business Relocation Expenses

  1. Expenses for moving laboratory and office equipment directly to the University must be included in the offer letter and will be paid or reimbursed separately from the employee’s household moving allowance.
  2. Competitive bidding is not required if the moving expenses are less than or equal to $10,000.
  3. Competitive bidding is not required if the moving expenses exceed $10,000 and a University Contracted Booking Agent is utilized.
  4. Competitive bidding is required if the expenses exceed $10,000 and a Contracted Booking Agent is not utilized. A minimum of three written estimates must be obtained by the new employee and a written justification by the business office must accompany the estimates if the desired agent does not have the lowest estimate. Please contact Procurement & Contracting Services (PACS) for additional information, including a request for an exception to the bidding requirement.
  5. Original itemized receipts are required for reimbursement. Direct vendor payment is preferred.

Funding Restrictions

  1. Sponsored Project Accounts: Contact Sponsored Projects and Contracting Services (SPCS), as many funding agencies do not allow relocation costs as direct charges to the sponsored project account. The funding agencies that do allow relocation charges have specific requirements that must be met for the charges to be allocable. For research/business relocation expense paid on a sponsored account, please include communication from the SPCS fund accountant showing the relocation is an approved expense. Household relocation allowances are not allowed on sponsored project accounts, however cost transfers for the amount of the allowance supported by receipts may be allowed.  Contact SPCS for additional information.  

Questions regarding relocation funding sources should be directed to the department’s Financial Services Office Fund Accountant or Sponsored Projects and Contracting Services Fund Accountant for SPCS accounts.

Procedures

Offer letter

  1. An offer letter should be prepared utilizing the applicable University Offer Letter template located on the Human Resources forms website.
  2. Changes made to a signed offer letter must be documented via a “Memo of Exception” and should include the following:
    1. New employee name / Employee ID (EMPLID).
    2. Reason for adjustment or change in offer letter.
    3. Employee start date.
    4. Copy of the initial offer letter.
    5. The “Memo of Exception” must be included in the Disbursement Voucher (DV) for research/business expense payments with the supporting documentation for the expenditure or may be attached within the DV Notes and Attachments tab. The DV must be routed for senior executive level approval based on the reporting structure of the unit. For household relocation expense moving allowances the “memo of exception” must be included with the signed contract on the moving allowance Payment Request.

Requesting Household Relocation Expense - Moving Allowance

  1. The Responsible Unit must submit a Moving Allowance Payment request in UAccess Employee within a reasonable time following the employee’s hire date. A copy of the signed employment contract indicating the moving allowance must be included. See Payroll’s website for FAQs on payment request submissions.
  2. All household relocation expenses, will be reported as taxable income annually by the University to the IRS on the employee’s W-2.
  3. If the household relocation expense is to be paid on a sponsored account please include communication from the SPCS fund accountant showing that moving allowance is an approved expense.

Requesting Research/Business Relocation Expense Reimbursement

  1. Procedures for the competitive bid process, obtaining required estimates and establishing a purchase order for the moving company are located at:  http://pacs.arizona.edu/moving_agreements
  2. Compile all original itemized receipts.
  3. Initiate a DV in UAccess Financials utilizing the appropriate account and object code 3490 Other Professional Services.
  4. Retain the original signed offer letter in the department and provide a copy for the financial record. When required, the department is responsible for supplying the original signed offer letter as needed.
  5. Print the DV cover sheet and attach all supporting documentation including, but not limited to the following:
    1. Original itemized receipt(s) totaling the amount of the reimbursement.
    2. Proof of payment if paid status is unclear from the receipt.
    3. Copy of signed offer letter indicating expenses for moving laboratory and equipment were approved and accepted.
    4. If the employee is required to maintain an original receipt the original must be submitted and a note placed on the receipt indicating return original.  Upon processing the DV, Accounts Payable will stamp the receipt “FSO-Original” and place a copy in the official record for audit purposes and return the original to the business unit to provide to the employee.
    5. Research and business relocation expenses are generally contracted through a moving company.  However, if you believe this will not be the case, please contact FSO Accounts Payable for detailed documentation requirements.

Questions regarding the reimbursement for Research/Business Relocation Expenses should be directed to FSO Accounts Payable at 520.621.9097 or accts_pay@fso.arizona.edu

Questions regarding the moving allowance for Household Relocation Expenses should be directed to FSO Payroll at 520.621.9097 or payroll@fso.arizona.edu

Frequently Asked Questions

  1. What if the moving allowance was not included in the offer letter by mistake?
    Moving allowances are subject to the terms consistent with the provisions outlined in this policy. If a moving allowance was not documented in the offer letter, prepare a letter of justification and obtain senior executive level approval based on the reporting structure of the unit.
  2. May a new employee receive a moving allowance prior to being established in UAccess Employee?
    No, the allowance is paid on the employee’s paycheck and the employee must exist as an ‘active’ employee in UAccess Employee to initiate the payment request.  Individuals on DCC status are not eligible for moving reimbursement/allowance.

  3. Are expenses for moving office or laboratory equipment covered under this policy?
    Business moving expenses most commonly involve moving laboratory or office equipment from an employee’s former employer to the University of Arizona. Expenses for moving office and laboratory equipment to be used in the employee’s place of work are separate from the dollar amount offered to the employee to support moving their personal household. Payments should follow the normal process for business expenses. Refer to Policy 9.10 Requisitions/Reimbursements.

  4. Can a household moving allowance be paid on a grant account?
    No, household relocation allowances are not allowed on sponsored project accounts. However cost transfers for the amount of the allowance supported by receipts may be allowed. Please contact Sponsored Projects and Contracting Services for more information.

  5. Does an employee have to repay the moving allowance if they do not fulfill their contract?
    Employees will not have to repay the University as the allowance has been reported as income and taxable to the employee at time of payment.

  6. Are benefits deducted from moving allowance at time of payment?
    All applicable taxes (Federal, State, Social Security & Medicare) along with applicable retirement percentages will be deducted at time of payment.  As with all forms of compensation, the employer’s portion of taxes is also due, therefore ERE will be applied to recoup for these deductions.

  7. Will the moving company vendors with whom the University of Arizona has a relationship, continue to offer the University contracted pricing to employees?
    Yes, all of the University contracted vendors as displayed on the PACS website will offer UA pricing to the new employees. The individual is responsible for the payment terms with the vendor.

  8. May a new employee receive reimbursement for pre-house-hunting expenses prior to employment? 
    No, the pre-house-hunting should be included in the moving allowance and paid on the employee’s paycheck in UAccess Employee by initiating a payment request for the full amount of the moving allowance.
     

Related Information

Senior Vice President for Academic Affairs and Provost
Senior Vice President for Business Affairs         
Human Resources Offer Letter
Procurement and Contracting Services
Google Maps
MapQuest
Financial Services Manual
Tax Cuts and Jobs Act (Public Law PL 115-97) 

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.